Robotics Emerges in the Lands of Cheap Labour

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What is it?
Why is it important?
References

What is it?

With almost 51% of global stock, Asia was the world’s largest market for industrial robots in 2012. By 2016, nearly 55% of the world’s industrial robots, or over 908,000, could be in Asia, with Japan, China and South Korea projected to have 2.8 times the number of the U.S., Canada and Mexico combined.¹ As the range of their abilities increases alongside falling prices, robots are increasingly leaving the factory as well, taking up roles in homes, workplaces and the outdoors. These roles could include teaching, agricultural work, disaster relief, environmental clean-up, security, transportation, and various kinds of therapy. The Japanese Ministry of Economy, Trade and Industry expects these “service sector robots” to be the fastest growing segment of robotics for at least the next twenty years.²

Why is it important?

Many are hoping that robotics will raise living standards and economic performance. Robots have the potential to improve the competitiveness of countries with looming labour shortages and ageing populations. Robots undertake jobs that humans cannot do, as well as jobs that humans should not do for health and safety reasons.

The main concern of the continued rise of robots is the potential impacts on jobs, wages and inequality.^3 4 Advancing automation has historically caused structural changes in industry, and this will accelerate as robotics progresses. Firms are seeing robotics as increasingly advantageous to cost reduction and competitiveness. China’s average manufacturing wages are increasing by 10% to 20% per year, but the price of robots is dropping by about 4% a year.^5  6Human rights and labour standard issues are also driving robotics. As a way to escape negative public perceptions associated with its treatment of employees, Foxconn, the world’s largest manufacturer of electronics for major global companies, aspires to have one million robots replace a similar number of employees by 2014.⁷

For a number of decades, Asian countries have been home to low-wage, low-cost manufacturing – exactly the jobs that are most readily replaced by automation. The integration of robots into Asian economies has been mostly manageable so far, but the potential pace and the scale of robotically driven automation could have significant social, political and economic impacts across Asia if automation leads to high rates of unemployment. Moreover, the different rates at which national economies adopt robotics and the different stages at which they do so in their economic development may create major challenges for the region.

References

1. “World Robotics 2013 – Industrial Robots.” International Federation of Robotics. September 2013. http://www.ifr.org/industrial-robots/statistics/(link is external)
2. “Robot market projections announced – Growth to 9.7 trillion yen anticipated by 2035” Japanese Ministry of Economy, Trade and Industry. April 2010. http://www.meti.go.jp/english/press/data/20100423_01.html(link is external)
3. Ford, M. “Could Advancing Robotics and Automation Bring on an Unemployment Crisis in Korea?” The Hankyoreh. March 2013. http://english.hani.co.kr/arti/english_edition/e_editorial/577306.html(link is external)
4. Kang, C. “Will Robots End Up Creating Jobs or End Them?” The Japan Times. March 2013. http://www.japantimes.co.jp/life/2013/03/10/general/will-robots-end-up-creating-jobs-or-end-them/#.UoUf_PnksZl(link is external)
5. “The end of cheap China. What do soaring Chinese wages mean for global manufacturing?” The Economist. March 2012. http://www.economist.com/node/21549956(link is external)
6. “Robot makers gear up for fast growth.” China Daily. November 2013. http://www.ecns.cn/business/2013/11-06/87357.shtml(link is external)
7. Rapoza, K. “As China Changes, Infamous Foxconn Goes Robotic.” Forbes Magazine. February 2013. http://www.forbes.com/sites/kenrapoza/2013/02/22/as-china-changes-infamous-foxconn-goes-robotic/