Lian Zhen Hou

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Tutorial T02
TA: Michelle Lee

Impacts of Automation in the US Manufacturing Sector

“Robots steal jobs.” A phrase that had been echoing around the industries since the dawn of

the fourth industrial revolution (Schwab, 2017); A bizarre claim that is equally simplistic as it

is inaccurate. For the longest time, computers had been in an evolving yet symbiotic

relationship with society. They provide the necessary computing power for people to carry

out tasks at higher speed and accuracy, while humans develop technologies to further push

the boundary of performance (Robotics, 2018). Automation in the manufacturing sector, for

one, is a prime example on the physical manifestation of the computing power. Automation

of the manufacturing industry in an attempt to increase the productivity of the US economy,

without a doubt, had sparked many controversies and questions. Among the issues raised, one

that is particularly divisive goes as the following; In this era of rapid automation in the

manufacturing sector, will blue-collar workers become obsolete? To provide context,

according to research by BBC, approximately 800 million jobs could be replaced by robots

by 2030, and in the US alone, 39 to 73 million jobs may be eliminated by 2030 (BBC, 2017).

The future of the workplace is seemingly changing as the percentage of automation in the

industry increases, further reinforcing the need to fully assess the impacts of automation on

the workers as it becomes an integral part of the US manufacturing sector (Nof, 2018). After

thorough and informed research, the displacement of blue-collar jobs through automation of

the US manufacturing sector will result in a net increase in the number of safe and rewarding

employment. This essay will explore the benefits of a manufacturing landscape co-habited by

robots and workers to maximize productivity, new employment opportunities and prospects
generated for the workers as indicated by the personal computer revolution in the 1980s, and

the global effects of automation in the US manufacturing industry.

First of all, the many benefits of a manufacturing landscape consisting of both robots and

workers will significantly increase the quality of work available in the manufacturing sector.

Traditionally, jobs found in the manufacturing industry were physically strenuous, lack

security, and low skill (Gold, 2016). Introducing automation into the picture correctly, and a

collaborative mentality can bring about immense benefits for all parties involved (Nof, 2018).

The benefits include a significant increase in job productivity, a decrease in production costs,

an increase in workplace safety, and an increase in workplace attentiveness. In 2017, US

manufacturing accounted for $2.17 trillion in global economic activity, and more than 98% of

US manufacturers qualify as small businesses (Vavra, 2017). The statistic shown is

significant because small businesses find it increasingly harder to attain labor force at a price

that will make ends meet thus robotic intervention with human supervision drastically

improves productivity and save on overall costs (Robotics, 2018). Tedious and dangerous

manual labor would be scrapped and make way for safer and more supervision oriented

working environment for blue-collar workers (Vavra, 2017). Instead of their primary focus on

building through the supply chain, the workers can instead take on a more proactive role such

as improving efficiencies of the manufacturing plant, expanding the product’s capabilities, or

more quality inspections to decrease the margin of error (Vavra, 2017). The benefits brought

about through automation of the manufacturing sector will see an increase in demands for

goods and services, and thus increasing demand for new forms of labor (Gold, 2016).

Through the lens of history, automation in the manufacturing sector boasts significant

numbers in opportunities and prospects for current and future generation of workers. To
provide context, the widely considered Third Industrial Revolution near the end of the

eighteenth century brought about the era of computing revelations that transitioned our

society to the ongoing Fourth Industrial Revolution where the connectivity between the

Internet of Things created cyber-physical autonomous systems, hence automation (Roser,

2017). Productivity increments were so significant when automation entered manufacturing

that major automotive companies in the US with many manufacturing branches like GM and

Ford relies heavily on automation to produce their cars (Winters, 2018). According to a report

published by McKinsey Institute, after carefully looking into the next five years of 2000

distinct job activities over 800 occupations, it was found that 45% of those work activities

could be automated (Gold, 2016). On first look, it may seem as though automation is

inducing a dent into workers’ welfare, but inferring upon history, that might not be the case.

According to the 20th CEO Survey conducted by PwC, a global accounting and consulting

firm, of the 1379 companies interviewed in 79 countries, 52% of the CEOs are already

exploring the benefits of humans and machines working together as an initiative to combat

job scarcity as a potential side effect to the age of digitization (Mint, 2017). Additionally,

78% of the CEOs are actively taking steps toward expanding their talent pool and altering

their people strategy to reflect the skills and employment structure of the future (Mint, 2017).

To put it plainly, “as MIT economics professor David Autor observes, this is part of the

evolution and improvement to working conditions (Gold, 2016).” Autor also pointed out that

while robots can execute tasks with impeccable accuracies and significant efficiencies, there

is plenty of capacity for humans to complement their workplace “colleagues” with non-

programmable capabilities, such as flexibility, reason, and common sense against

unsuspecting problems (Gold, 2016). For example, a simple yet often overlooked

complementary relationship between robots and humans is the smartphone. There were
countless times where the user has depended on the phone for navigation only to adjust for

real-time navigation errors through common sense correctly. Thus, automation in the

manufacturing sector is proven to complement the labor force in more significant

opportunities and prospects. The transition should be embraced with proper caution and

guidance to lead current and future generations of workers into the next era of manufacturing

(Roser, 2017).

In the big picture, automation of the US manufacturing industry so far had proven to be part

of a global movement of relentless automation in the wake of rapid globalization (Rotman,

2017). According to the International Federation of Robotics, the United States currently rank

7th in terms of robot density with approximately 64 robots per 10,000 workers (Winters,

2018). Combined with suitable policies, the strategy of relentless automation while balancing

robots per workforce capita eases the burden of transitioning on current workers while

reaping the economic benefits of superior productivity and efficiency. A study from the

Centre of Economic Studies between 1993 and 2007 saw a direct link with 0.37% GDP

growth and a 0.36% increase in labor productivity (Robotics, 2018). Thus, it proves the

strong correlation between automation and a strong economic outlook. The Reshoring

Initiative also helped the US reclaim more than 250,000 jobs through the attraction of

robotics and automation (Robotics, 2018). The cheaper costs also meant that companies

would less likely relocate their manufacturing plants or set up offshore contracts due to the

highly efficient, low cost of manufacturing through robotics and automation (Robotics,

2018). Speaking from a supply-chain standpoint, the long-term gain in efficiency and

productivity will allow for a supply miracle, drive the costs down, boost demand, and

virtually eliminate the costs of trade which will open new markets and drive economic

growth (Schwab, 2017).

Bibliography

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