Firing Humans, Hiring Machines: Jobs Cut As Global Robotics Market Surges

4128888236_2e8282fccb_b"Having billions of dollars of crops...impacted by chronic labor issues has clearly become unsustainable." -- Charles Grinnell, CEO, Harvest Automation

In the 2004 sci-fi action film I, Robot, Will Smith asks a robot, "Can a robot write a symphony? Can a robot turn a canvas into a beautiful masterpiece?" Robots may not be able to do what Mozart and Picasso are famous for, but they can perform menial and repetitive tasks, like handling containers in greenhouses, which is exactly what Charles Grinnell intends to have his robot do -- 24 hours a day, 7 days a week.

His company, the Massachusetts-based Harvest Automation, develops robots for automating agricultural jobs. They recently took in $2.5 million in a debt and warrants offering, following two venture capital rounds over the past two years that raised USD 5.3 million. In a statement released on August 5, the company noted that "current labor trends and aggressive federal and state legislation are driving labor shortages and creating legal issues for growers across the country."

AS ROBOTS RISE, SO DOES UNEMPLOYMENT

One of the most direct and immediate socioeconomic problems caused by automation is unemployment, especially among low-wage earners who tend to fill the kinds of menial jobs in fields and factories that are being taken over by robots and machines.

Last month, the Chinese government press agency Xinhua reported that the world's largest electronics manufacturer Foxconn will "replace some of its workers with 1 million robots in three years to cut rising labor expenses and improve efficiency." If it sounds like a lot of robots, it is. Though Foxconn is China's biggest exporter and is traded publicly on the Taiwanese stock market with a market cap of USD 43 billion, it currently only uses 10,000 of them.

Foxconn's founder and chairman Terry Gou said he wanted to move the displaced workers "higher up the value chain beyond basic manufacturing work" and "from more routine tasks to more value-added positions in manufacturing such as research and development, innovation and other areas that are equally important to the success of our operations." But as The Economist notes, "Automation on the scale is talking about would surely mean some of those human workers losing their jobs."

THE GROWING DEMAND FOR ROBOTS

The International Federation of Robotics (IFR) estimates the global robotics market to be USD 12 billion. They project that between 2011 and 2013, "robot shipments will increase by about 9 percent per year on average in the Americas, about 12 percent in Asia/Australia and by 8 percent in Europe" and the service bot industry will double, with more than a third of the top 200 firms in the United States -- double the amount in Japan and Germany. More than 115,000 industrial robots were shipped last year, doubling the number of units sold worldwide.

Electronics.ca, an electonics industry market research network, projects the 2011 global demand for robotics to reach $21.8 billion. "That value is projected to reach USD 30.1 billion in 2016, after increasing at a five-year compound annual growth rate (CAGR) of 6.7 percent...the Asian region, valued at USD 7.7 billion in 2011, is projected to reach USD 10.9 billion in 2016, yielding a CAGR of 7.2 percent."

LIMITS TO AUTOMATION: WORKERS, BE HUMAN

But automating a business takes time. It can be several years before seeing the ROI needle move. Businesses engaged in corporate social responsibility can put employees who are going to be phased out through re-training programs, perhaps as technicians to maintain and repair all those new-fangled machines. Not all robots can be fixed solely by robots, not yet anyway.

And there are limits to automation. While machines are good at seeing and moving things, they aren't good at smelling, tasting or hearing. They can't recognize patterns or languages as well as we can. And they've got a long way to go in the realm of complex decision-making and strategic planning. Factory workers who become displaced by robots might simply have to find work that takes advantage of their more "human" faculties.

As the robotic sector expands, so too must the investment in human capital. A growth economy needs job creation. And so a balance must be found between two rapidly growing populations -- humans and robots. According to Isaac Asimov’s Three Laws of Robotics, "a robot may not injure humanity." But if robots take over most of the low-wage jobs and those workers don't have the right skills for other types of employment, that law will certainly be broken.

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NOTES

http://www.harvestai.com/pdf/Press-Release-Partner-Program-Aug2011.pdf
http://www.masshightech.com/stories/2011/07/25/daily47-Harvest-Automation-receives-25M-financing.html
http://www.lowellsun.com/green/ci_18593043#ixzz1Vcfjobct
Ibid., 1.
http://news.xinhuanet.com/english2010/china/2011-07/30/c_131018764.htm
http://online.wsj.com/public/article/SB118677584137994489.html
http://www.economist.com/blogs/schumpeter/2011/08/foxconn
http://www.ifr.org/industrial-robots/statistics/
http://www.businessweek.com/magazine/content/11_11/b4219032532458.htm
http://www.electronics.ca/presscenter/articles/1539/1/Global-Demand-For-Robotics-To-Surpass-30-Billion-In-2016/Page1.html

image: ASIMO, a humanoid robot created by Honda, in Italy in November 2009 at the opening ceremony of Futuro Remoto, the largest science festival in southern Italy, meeting Bruno Siciliano, Professor of Automatic Control at Naples University. (credit: Honda News, Flickr Creative Commons)

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