Robots are getting better at doing human jobs. That’s probably good for the economy — but there are some serious downsides, too.
Machines are expected to displace about 20 million manufacturing jobs across the world over the next decade, according to a report released Wednesday by Oxford Economics, a global forecasting and quantitative analysis firm.
In the United States, Oregon, Louisiana, Texas, Indiana and North Carolina are the most vulnerable states, according to Oxford Economics. That’s because those states are reliant on manufacturing jobs that could disappear because of robots.
That means about 8.5% of the global manufacturing workforce could be displaced by robots. The report also notes that the move to robots tends to generate new jobs as fast as it automates them, however it could contribute to income inequality.
[North Carolina’s economy included more than 475,000 manufacturing jobs in May, nearly 10 percent of all jobs in the state, according to the US Bureau of Labor Statistics.]
The use of robots is on the rise: At this point, every new robot that is installed displaces 1.6 manufacturing workers on average, according to the Oxford Economics model.
Automation isn’t a new trend in manufacturing, of course. The automotive industry, for example, used 43% of the robots in the world in 2016.
But robots are becoming cheaper than many human workers, in part because of the falling costs of machines. The average unit price per robot has dropped 11% between 2011 and 2016, according to Oxford Economics. And they are increasingly capable of functioning in more sophisticated processes and varied contexts. On top of that, the demand for manufactured goods is rising.
China presents a big opportunity for growth in automation. That country already accounts for a fifth of the world’s industrial robots, with every third new one being installed there. Beijing “is investing in robots to position itself as the global manufacturing leader,” Oxford Economics said.
By 2030, some 14 million robots could be working in China, “dwarfing” the rest of the world, according to Oxford.
The effect on economic output could be tremendous. Oxford Economics estimates that boosting robot installations to 30% above the current growth forecast by 2030 would lead that year to a 5.3% increase in global GDP, or $4.9 trillion. That’s more than the projected size of Germany’s GDP for that year.
So what’s not to love? Robots will boost productivity and economic growth, as well as spur industries that don’t even exist yet. But Oxford Economics also warns that they will be seriously disruptive.