There’s an interesting/alarming cover story in Barron’s on the use of automation, specifically robots, and it’s impact on jobs. We may be in a perfect storm where even the most protective actions could result in the most automation:
As President Donald Trump prevents manufacturers from leaving the U.S., expect them to use robots to keep labor costs down…
…One thing that could accelerate U.S. robot deployments is a corporate tax cut, which would reduce the overall cost of manufacturing in the U.S., but not the labor cost. Another is a border adjustment tax, which would reward exporters while penalizing importers. Accelerated depreciation on capital investments would give companies an immediate tax break on money spent to automate factories.
…and of course, investors would applaud this action. There were some other nuggets of information that also could have a lasting impact: China.
Already the world’s largest buyer of robots, China plans to close the gap with developed nations on robot density, or the number of robots in service per human worker. The idea isn’t just to drive down production costs. It’s to improve quality and one day compete more effectively in high-value goods like cars. It’s also to offset the million workers per year that China is expected to lose as its population ages. In the U.S., the demographic challenge is less dire, but present. The working population is growing slowly, at about 0.5% a year.
One of the stories I remember reading about the birth of the Smartphone was about how quickly assemblers in China could set up a factory, but also have full shifts of workers. It was something like in 6 weeks they were able to ramp-up from a standstill to complete production for world-wide demand. No one else could do it, but mostly it was the availability of workers that gave them the edge. Robotics would continue to give them a significant advantage, and as the article state, allow them to move into new markets like cars.
So what’s the obvious answer: be the designer and manufacturer of Robots. Even the Russian Usurper (quoted in the article says so, and that’s how I know it is obvious). Less obvious is the answer that one of the automation enthusiasts proclaims:
“Robots save jobs,” says John Roemisch, vice president of Fanuc America. “You can’t do it the old way just because that employs the most people. If you don’t adapt, you’re not going to survive.” In Roemisch’s view, robots replace unpleasant or dangerous jobs, but also spawn new ones. “Instead of a worker picking up a screwdriver, the robot does that and the worker operates the robot,” he says. “His skill level has to be a little bit higher, but it’s not like you need engineers on the shop floor.” Indeed, newer robots come with features like intuitive touchscreen controls that decrease the amount of training workers need to use them.
…which implies a certain amount of education and/or training. Betsy DeVos um, oh never mind.
So the summary of the argument is that without robotics, entire industries will decamp for countries like China that are embracing automation. I’m not sure that I believe that, but it does seem plausible. If there are a certain number of workers that are needed to operate the factories, then it seems reasonable that the answer is to have more factories, but it would need to be exponential to our current level of workers. And of course, those factories will be disrupted by another wave of innovation.
Being Baron’s, a huge chunk of the article goes on to explain to investors how and why to cash in, which seems rather sangfroid to me, but that’s the investor class in a nutshell.
I don’t know what the answer is, but I think the psychology of the article is probably right. Hold on tight, I think the future is coming right at us.
PS: Isaac Asimov’s Three Laws of Robotics (1942 short story “Runaround“)
- A robot may not injure a human being or, through inaction, allow a human being to come to harm.
- A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
- A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.
I wish our plutocrats were as ethical.