Automation: A Job Creator, not Just a Job Killer

GettyImages-507748490-compressorAs President Trump and manufacturers talk about initiatives to bring manufacturing jobs back home, data still indicates that many of those jobs have long been lost to automation and technology. But while the manufacturing jobs of yesteryear may never return, experts say new automation may entice some manufacturers to establish new operations in the United States.

The manufacturing sector has lost roughly 5 million jobs since 2000, at a time when production and output had been growing. According to a Ball State University, manufacturing grew by roughly 2.2 percent per year between 2006 and 2013, and while trade accounted for 13 percent of job losses, 88 percent of those losses were attributed to robots and “other factors at home.”

Overall, most job losses in the sector have been due to productivity gains. Wolfgang Lehmacher, head of supply chain and transport industries at the World Economic Forum, said that factories simply don’t need as many workers as they used to because “robots are increasingly doing the work.” He said investment in automation and software has doubled the output of the average worker over the past two decades and that regardless of trade, robots are replacing workers at an accelerating pace.

“Robots are going to change the economic calculus for manufacturing; and people will spend less time chasing low-cost labor.

While machines are now capable of doing amazing things, however, the good news is they are actually keep and create jobs. Today’s systems are smarter, more mobile, more collaborative and more adaptable. While machines of the past were often dangerous and had to be operated away from humans, newer ones can now function alongside and with the help of workers.

New capabilities in production will leverage robots to drive efficiencies and use human labor to manage it all. Hal Sirkin, senior partner at Boston Consulting Group, said “robots are going to change the economic calculus for manufacturing,” and that “people will spend less time chasing low-cost labor.”

The share of tasks performed by robots will rise from a global average of about 10 percent across manufacturing industries today to near 25 percent by 2025.

While automation and technology has significantly reduced the need for less-educated and less-skilled workers, it is creating opportunities for others.And experts say this new breed of robots and capabilities could bring back many jobs to the United States.

A great example is Bicycle Corporation of America, which recently moved 10 percent of its business back to the U.S. through automation and the use of robots. Arnold Kamler, owner of BCA, said whereas bicycle spokes are typically dropped in by hand one at a time, machines can now do it in only 30 seconds. Kamler also said that with the same number of workers, they can do three times as many hubs in a day. The company invested $6 million in equipment, bought an abandoned factory in Manning, S.C., and hired 140 workers.

“We’re creating jobs with automation and being able to be price-competitive with China now and it will get even better in the future. We’re not replacing other jobs with these robots. What we’re doing is we’re adding more equipment that make us more efficient,” said Kamler.

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Craig Guillot
Craig Guillot is a business writer based in New Orleans, La. His work has appeared in Wall Street Journal, Entrepreneur, CNNMoney.com and CNBC.com. You can read more about his work at www.craigdguillot.com.

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