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Coming to a Factory Near You
Dawn of Digital Machine Age
Prelude to the Future
IBM Supercomputer Big Blue defeats World Chess Champion Garry Kasparov.
Better and Faster
PlayStation today is more powerful than a military supercomputer from 1996
Industries Morph at a Faster Pace
The first autonomous vehicle was announced by Google on March 1, 2012. Two years later, all major car manufacturers have announced working prototypes.
A New Machine Age
Digital technology, which allows you can reproduce things at close to zero marginal cost with perfect quality and almost instant delivery, is affecting virtually every industry.
This time it’s happening faster.
Nearing the Point of Take Off
• A new generation of flexible, sensing robots have the potential to change the landscape of many industries.
• The International Federation of Robotics estimates 225,000 industrial robots were sold last year, up 27 percent from 2013.
• Global spending on robots will jump from $15 billion in 2010 to about $67 billion by 2025 due to falling prices and improvements in performance.
No Going Back
Robots now perform only about 10 percent of manufacturing tasks. By 2025, that portion will approach 25 percent.
About 1.2 million additional robots will be deployed in the U.S. by 2025.
Four industries will lead the shift — computer and electronics products; electrical equipment and appliances; transportation; and machinery.
Costs Are Tumbling
The cost to purchase and start up an advanced robotic spot welder has plunged from $182,000 in 2005 to $133,000 in 2014, with the price forecast to drop another 22% by 2025.
In electronics manufacturing, it costs just $4 an hour to use a robot for a routine assembly task vs. $24 for an average worker.
BCG found that 60 percent of all direct manufacturing tasks could be automated or augmented by robotics. The result: a reduction in manufacturing labor costs while increasing per-worker output by 10 to 30 percent.
Attack of the Drones?
Artificial intelligences scares people
Elon Musk describes artificial intelligence (AI) as “summoning the demon”, and the creation of a rival to human intelligence as probably the biggest threat facing the world.
Stephen Hawkins has said the development of full artificial intelligence could “spell the end of human race.
The Future of Jobs: The Robotic Elephant in the Room
Are robots stealing our jobs? Is human labor destined to become
obsolete?
The Luddite Fallacy
This scary topic has been debated for more than 100 years.
The Great Creator & Destroyer
Automatic threshers replaced 30 percent of labor force in agriculture in the 19th century.
Industrial robots are a disruptive technology
And as disruptive technologies take hold some workers benefit while others are hurt.
As technology advances,workers with less educationtend to have their jobs automated.
BCG says manufacturers tend toratchet up their robotics investment when they realize at least a 15% cost savings compared withemploying a worker.
Replacing people with robotsis projected to result in amanufacturing workforce that's 22% smaller by 2025 than it otherwise would have been.
Remaking the Competitive Landscape
Foxconn, maker of iPads and I Phones and products for Dell, Sony and HP, plans to replace many of its 1.2 million employees with robots.
Even China is not immune from job loss by robots.
The coming horde
The Last Mile
Now robots are moving into doing assembly-level work
Source: The Fiscal Times, March 19, 2013
Capital-Biased Technical Change
When you replace a human worker with a robot, the capital owners earn a bigger share of the income.
Changes in technology are causing a redistribution from labor to capital.
A Silver Lining
• Fear of massive job loss reflects a lack of imagination. We don’t know today what all of those jobs will be.
• The three highly-robotized economies of the world -- Germany, Japan and South Korea -- have the lowest unemployment levels.
• People are far more versatile and adaptable. (For now.)
• Robotics creates a need for people to work with or maintain these technologies.
Tradition Holds
• Productivity increases production savings
• Most savings flow back to consumers in lower prices
• Consumers use the savings to purchase more stuff.
• Raising productivity increases demand which means more
new jobs.
The New Collaborative Robots
Most robots have been big, expensive, and clunky and to some degree dangerous. Now robots are working alongside humans without safety guards between them.
Man-machine hybrids
There were 476,700 nonfatal occupational injuries and illnesses in the manufacturing sector in the U.S. in 2013.
Many were repetitive strain injuries caused by forceful exertion over time, such as hoisting or shifting loads.
Repetitive strain injuries cost industry at $20 billion per year, not counting the high costs of lost productivity.
Wearable robotic devices may aid a workforce long beset by injuries.
Not Just for Corporate Goliaths
Robotics are making it possible for more people to start businesses in industries where the need for a substantial labor force once posed a big barrier to entry. Small firms are using 3-D printers to make prototypes and even manufacturing products.
Meet Baxter
Baxter works 120 hours a week at Vanguard Plastics in Southington, Conn., for $1.50 an hour or $9,000 a year.
His human counterparts make $46,000 and work 40 hours a week.
Baxter excels at picking things up and putting them down while adapting to changes in the environment. He is compliant, not stiff.
Now Meet Sawyer
Sawyer performs “machine tending” tasks, which generally require a person to stand next to a piece of machinery inserting and removing parts.
Bottom Line
• The spread of robotics should make the U.S. more productive than many other countries, creating more jobs.
• But many low-skills jobs will be eliminated while higher-skill positions, such as operating and maintaining robots, are expected to grow.
• Just as there will be winners and losers among skilled and unskilled workers, the same can be said for communities.
Unprecedented Restructuring
• Manufacturers constantly reevaluate how and where to produce products. They’re opening factories and they’re closing factories, and they’re shifting employment.
• But change is not in one direction.
• Not everybody is reshoring back to the U.S., just as not everybody is offshoring again to Asia.
• Every part of the world is engaged.
Thoughts on Site Selection
• Availability of quality workers and access to markets customers are key.
• There is no one decision that is right for all companies, all products and all cost structures.
• A labor intensive product will probably be made in a different location than a capital intensive product.
• Key issues continue to change.
Companies look at a wide variety of factors beyond labor costs.
Look to the Future
• Partner with manufacturers to prepare for the increasing use of robotics.
• Examine and revamp your workforce training programs accordingly.
• Ask your local manufacturers what jobs they will likely to be recruiting and how they are training existing employees to fill these positions.
