Study Reveals How Robotics Automation Could Affect Your Job
Robotic Process Automation (RPA) is on the rise all over the globe and is taking over manual, repetitive tasks, especially in the manufacturing industry. These tasks were previously carried out by humans, but robots are replacing people because they can perform the same tasks better and cheaper.
Recently, there has been rising concern about the loss of jobs that are expected to be caused by the implementation of robotics. The president of the World Bank, Jin Yong Kim, says that we are on a crash course to automate millions of jobs.
Indeed, the number of manufacturing jobs in the USA has declined by almost 50% since 1994, and this is attributed in large part to automation. One robot is thought to replace between three and six jobs in the USA.
However, a brand new study from Germany suggests there may be another way to go about this: automation does not necessarily have to replace existing jobs.
Germany is a robotics powerhouse
This study is especially interesting because Germany has a larger manufacturing industry than the USA (25% vs. 9% total employment, respectively), and many more robots have been installed in Germany than in the USA (see figure below).
Figure 1. The rate of RPA installment in Germany vs. the USA and the rest of Europe (Source)
Currently, there are 7.6 robots per thousand manufacturing workers in Germany, compared to only 1.6 in the USA.
The German automobile industry has seen the largest increase in robotics, with 60 – 100 additional robots installed per 1000 workers in 2014 compared to 1994.
Other industries in Germany that are implementing robotics automation on a large scale include furniture production, leather production, and domestic appliance production.
Given the larger number of robots in Germany and the quadrupling of their number since 1994, one would expect more jobs to have been lost in Germany than in the USA.
Surprisingly, however, the study finds that this is not the case. When the researchers analysed the German employment data of the last 20 years, they found that the number of jobs has hardly decreased.
Changing career dynamics in Germany due to RPA
While the total number of existing manufacturing jobs has hardly declined as a result of RPA implementation in Germany, the researchers found that it prevented new manufacturing jobs from being created.
In other words, robots did not cause redundancy, but they did prevent job entry into the manufacturing industry. In addition, the study found that RPA changed the career dynamics of manufacturing workers.
Those workers who continued doing pure manufacturing tasks had to accept wage cuts as a result of RPA implementation. The study estimates that 75% of the manufacturing workers were affected by these cuts, though the reduction in pay has been relatively moderate so far.
Robots generate new jobs
One reason that relatively few manufacturing workers were made redundant in Germany is that the implementation of RPA caused increased productivity and profit, especially in the automobile industry.
Because of the increase of new roles in businesses that implement automation, some of the manufacturing workers are re-trained to perform new tasks that are complementary to their old ones.
The researchers found that workers who learned to work in the new context of automation had a very high probability of keeping their job.
It was also found that highly skilled workers (such as managers and scientists) gained increased wages as a result of RPA. This makes sense – experts in managing and running new technology have increasing value to their employers.
Unusual characteristics of the German job market
While these results are interesting, since they might provide a model for implementing RPA without causing widespread job loss, it should be taken into consideration that the German job market is different from most other countries, due to very powerful workers' unions.
The unions in Germany are very effective at negotiating deals with industry leaders that preserve jobs, at the expense of accepting salary cuts.
Thus it remains to be seen if this model is applicable to other countries that don’t have such powerful unions.
In addition to this difference, it should also be noted that Germany is an important producer of robotics. Among the 20 largest RPA producers in the world, 5 are from Germany, while only 1 is from the USA.
Thus the global rise in robotics is generating many new jobs in the robotics industry of Germany. Again, this is likely to be different in other countries.
It has become increasingly clear that RPA will dramatically change the global employment landscape. But the widespread fear of massive job loss due to RPA may not be totally founded.
The example of Germany shows us that it may be possible to implement RPA successfully without causing widespread redundancy. However, this option depends on all parties involved working together to adjust the career dynamics of all jobs affected by automation.