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April 15, 2017, 2:17 p.m. EDT

The surprising way to help U.S. workers: invest in robots

The bigger risk to jobs is if China gets there first

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By Nikolaus Correll


Getty Images
A robot handles a hood for a Chrysler vehicle at a factory in Michigan.

America’s manufacturing heyday is gone, and so are millions of jobs, lost to modernization. Despite what Treasury Secretary Steven Mnuchin might think , the National Bureau of Economic Research and Silicon Valley executives , among many others , know it’s already happening . And a new report from PwC estimates that 38% of American jobs are at “high risk” of being replaced by technology within the next 15 years .

But how soon automation will replace workers isn't the real problem. The real threat to American jobs will come if China does it first.

Since the year 2000, the U.S. has lost five million manufacturing jobs . An estimated 2.4 million jobs went to low-wage workers in China and elsewhere between 1999 and 2011 . The remainder fell victim to gains in efficiency of production and automation, making many traditional manufacturing jobs obsolete.

Though more than a million jobs have returned since the 2008 recession, the net loss has devastated the lives of millions of people and their families . Some blame robotics, others globalization. It turns out that those forces work together, and have been equally hurtful to manufacturing jobs. The car industry, for example, imports more and more parts from abroad , while automating their assembly in the U.S.

As a robotics researcher and educator, I strongly advocate that the best way to get those jobs back is to build on our existing strengths, remaining a leader in manufacturing efficiency and doing the hard work to further improve our educational and social systems to cope with a changing workforce. Particularly when looking at what’s happening in China, it’s clear we need to maintain America’s international competitiveness , as we have done since the beginning of industrialization.

Chinese competition

In 2014, China exported more, and more valuable, products than the U.S. for the first time . Many of these were made by the low-wage laborers China has become famous for.

Yet China has also emerged as the largest growth market for robotics . Chinese companies bought more than twice as many industrial robots (68,000) in 2015 than American companies did (27,000). China’s Midea /zigman2/quotes/207665926/delayed CN:000333 -0.07%   — an appliance manufacturer — just purchased the German robotic powerhouse Kuka .

China has understood that its competitive advantage of cheap labor won't last forever. Instead, labor costs will rise as its economy develops. Look at Foxconn /zigman2/quotes/204111604/delayed TW:2354 -0.91%  , for example, the Taiwanese manufacturing contractor of the iPhone known for the high-pressure work environment at its plants in China . The company already uses more than 60,000 robots , and has said it wants to use as many as a million robots by 2020 .

Click to Play

Think you would win an argument with a robot? Watch this.

Osaka University and NTT Laboratories recently created the first "discussion dialogue" androids - the only robots that have human-like independent cognitive abilities, as opposed to scripted speech.

That’s a bold goal, especially given the current state of robotics. At present, robots are good only at highly repetitive tasks in structured environments. They are still far inferior to humans in simple tasks like picking items from a shelf . But FoxConn’s goal of transforming its streamlined manufacturing line is definitely achievable. Many of the tasks now done by humans thousands of times a day can be easily automated — such as applying a puddle of glue, placing double-sided tape, positioning a piece of plastic, tightening screws or loading products onto a pallet.

The lesson here is simple: Some occupations will simply disappear, like those of weavers in the textile industry displaced by the power loom . We need to embrace this disruption if we want to avoid being taken out of the game altogether. Imagine if China is able to replace our low-wage jobs with its workers, and then can automate those jobs: Work Americans now do will be done here, or anywhere — but not by humans. Foxconn is planning its first plant in the U.S. ; soon, Chinese robots will be working in America.

Seeing opportunity, not loss

The good news is that while many types of jobs will cease to exist, robots will create other jobs — and not only in the industry of designing new robots.

This is already beginning to happen. In 2014, there were more than 350,000 manufacturing companies with only one employee , up 17% from 2004. These companies combine globalization and automation, embracing outsourcing and technological tools to make craft foods, artisanal goods and even high-tech engineered products.

/zigman2/quotes/207665926/delayed
CN : China: Shenzhen
¥ 70.55
-0.05 -0.07%
Volume: 25.41M
Aug. 7, 2020 3:00p
P/E Ratio
21.48
Dividend Yield
2.27%
Market Cap
¥491.14 billion
Rev. per Employee
¥2.55M
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/zigman2/quotes/204111604/delayed
TW : Taiwan
NT$ 54.30
-0.50 -0.91%
Volume: 2.15M
Aug. 7, 2020 1:30p
P/E Ratio
11.28
Dividend Yield
4.60%
Market Cap
NT$76.81 billion
Rev. per Employee
NT$888.52M
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