prabhuUp to 20 million manufacturing jobs could be lost to robots across the world’s leading economies by 2030, an in-depth research project published today by Oxford Economics has found.
The report How Robots Change the World – What automation really means for jobs and productivity, found that around 1.7 million manufacturing jobs have already been lost to robots since 2000—including around 400,000 in Europe, 260,000 in the US, and 550,000 in China.
The rate of ‘robotisation’ is increasing rapidly: Since 2010, the global stock of industrial robots has more than doubled, the Oxford-based group said.
If this rate holds, the global manufacturing workforce will be 8.5% smaller by 2030.
Each new robot installation already displaces (on average) 1.6 manufacturing workers, according to our econometric study of major economies.
AI in services industry
Use of robots in services industries will also accelerate sharply in the next five years, fuelled by advances in AI, machine learning, and engineering.
This will particularly affect logistics industries but spread to sectors including healthcare, retail, hospitality, and transport.
Approximately every third robot worldwide is now installed in China. By 2030, the firm estimates that China could have as many as 14 million industrial robots in use, dwarfing figures for the rest of the world as China further consolidates its position as the planet’s primary manufacturing hub.
Lower-income regions hardest hit
To highlight the geographic areas of major economies that are most at risk from robotisation, the report introduces a Robot Vulnerability Index, which ranks the most- and least-vulnerable regions of seven key advanced economies.
Crucially, the great displacement of jobs from the rise of robots will not be evenly spread around the world, or within countries.
Lower-skilled regions, which tend to have weaker economies and already-high unemployment rates, are much more vulnerable to the loss of jobs due to robots.
On average, each additional robot installed in these regions leads to almost twice as many job losses as those in higher-skilled regions of the same country. economic inequality and political polarisation.
Given these stakes, policy-makers need an early warning system to help them to mitigate the risks to employment from automation.
Robots to advance on the services sector
The report examined how robots are steadily gaining traction in specific segments of the service economy from airport baggage handling to warehouse stock management, and even bricklaying on construction sites.
Oxford Economics found that jobs where repetitive functions are required are most affected, with those such as warehouse work at imminent risk.
Jobs in less structured environments and which demand compassion, creativity or social intelligence are likely to be carried out by humans for decades to come.
But the report charts the growing role robots will increasingly play in sectors including retail, healthcare, hospitality, and transport as well as construction and farming.
$5 trillion ‘robotics dividend’
Within countries and sectors, the positive and negative impacts of robotisation will be felt very unevenly, with workers in the manufacturing sector, especially those in lower‑skilled regions, particularly vulnerable to devastating job losses.
Yet at the global level the study shows that the current wave of robotisation ultimately boosts productivity and economic growth, generating new employment opportunities at a pace comparable with the rate of job destruction.
One million new jobs for humans
This ‘robotics dividend’ will lead to millions of new jobs being created throughout all sectors of the global economy.
Across the world, Oxford Economics found that a 1% increase in the stock of robots per manufacturing worker leads to a 0.1% boost to productivity, measured by output per worker—enough to drive meaningful growth.
Using Oxford Economics’ Global Economic Model the group found that faster adoption of robots boosts both short- and medium-term growth.
A 30% rise in robot installations above our baseline forecast for 2030 would, for example, trigger a 5.3% boost to global GDP in that year—equivalent to $4.9 trillion to the global economy that year, or an economy greater than the projected size of Germany’s.
Profound policy implications
As robotics adoption intensifies, policy-makers will face a dilemma: while robots enable growth, they exacerbate income inequality. Automation will continue to drive regional polarisation in many advanced economies—and this trend will intensify as automation spreads to services.
The challenges are not insignificant, said Oxford Economics. Its analysis of jobs moves of more than 35,000 US workers over their careers found more than half of those leaving production jobs in the past two decades were absorbed by just three occupational sectors: transport, construction and maintenance, and office and administration work.
These sectors are among the most vulnerable to automation over the next decade.
But this should not lead policy-makers to slow the adoption of robotic technology. Instead the focus should be to use the robotics dividend to help those in vulnerable regions ready themselves for the major upheaval ahead.
Oxford economics ends its report with a framework of action for policy-makers, business leaders, technology companies, educators and workers to navigate the challenges and opportunities that robots will bring.
Preparing for and responding to the social impacts of automation will be the defining challenge of the next decade.
