Economy

Three ways robots affect the economy

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Robots are being increasingly used in every industry. This is a trend that will not be slowing down. Both the positive and negative impact of robotics use on businesses and employees are both real. These are just a few of the many ways robots impact the economy.

 

KEY TAKEAWAYS

  • Robots can take over your job!
  • They have been interfering in manufacturing work for decades. Now they are making inroads into other tasks, such as logistics and inventory management.
  • While robots and automated production can have a negative effect in some labor sectors, automation and productivity increase productivity and lower production costs. They also create new jobs for the tech sector.

The Rise of the Machines

For thousands of years technology has helped make work more efficient, starting with simple tools like farming and ending up in modern-day factories as assembly-line robotics. Robots are being increasingly used in many business situations. Robots are able to work alongside or even completely replace human workers. Amazon.com Inc. (NASDAQ : AMZN), for example, uses a variety robotics in its warehouses to stock and retrieve inventory and pack items.1 Tesla Motors Inc. NASDAQ : TSLA has automated assembly lines and robots for its electric cars.3 There are positive effects robots have on society.

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Productivity Growth

A higher standard of living can be achieved by having lower prices and better quality products and services. Higher living standards can result from higher wages, lower prices of goods and services, and overall greater variety of products. 

More and better training and education of workers will lead to an increase in quality and quantity of labor. Capital drives productivity growth through investment in machines, robotics, computers and other items that generate output. TFP, which is often cited by many as the most important source for productivity growth, results from the synergies between labor and capital. 7 For example, while education and productivity are constants, TFP rises if the machines they use become more productive. Unquestionably robots make production facilities more efficient. Even though there is still a human component to factories, robots are inevitably increasing productivity.

Gross Domestic Product Growth

There is no surprise that productivity increases with an increase in gross domestic products (GDP). The effects of robots in the economic system was the subject of a paper written by Georg Graetz of Uppsala University (now Guy Michaels of London School of Economics) in December 2018. They studied the United States and 16 other nations and analyzed various data for a period of 15 year ending in 2007. Graetz and Michaels discovered that over the 15-year period, GDP growth increased by 0.36% in average across 17 countries. These substantial increases were compared to productivity gains that occurred from steam technology around the turn of 20th century

 

Creation of Jobs

Many people do not realize that robots are creating new high-paying jobs for skilled workers. Although robots may be replacing low-skilled workers, and automating certain tasks, robots and automation require workers who are skilled in higher-value work. In manufacturing, robots can do menial tasks like sorting and transporting materials. However, higher-skilled workers can complete more complex tasks such as quality-related tasks.

 

While robots and automated are truely taking away whole categories of jobs in many industries there is still a time when workers can get better-paying, more skilled jobs if they’re able to learn enough to fill the roles.

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