Insights / Industry Perspectives / Will Industrial Robots Kill Jobs or Create Better Ones?


7 mins read

Will Industrial Robots Kill Jobs or Create Better Ones?

In manufacturing, robots are taking over the world. Or, at least, that’s what we’re led to believe. 

Sustainable growth in the manufacturing sector largely depends on a company’s ability to innovate in-line with existing trends and embracing digital transformation. As a result, the integration of industrial robots has been revolutionary across industries, in digital factory engineering, in particular. The digital factory is the industrial sector’s big bet for the future, and it is here where we are seeing a massive change in employment.

On one side, a majority of people fear artificial intelligence and see robots replacing menial work as a problem. More than 50% of US jobs are predicted to be impacted by automation over the next 20 years in sectors like manufacturing, retail, inspection, and delivery. 

On the other hand, key findings from a Pew Research study on “AI, Robotics and The Future of Jobs” indicates that 52% of respondents view the integration of industrial robots as the perfect opportunity to get people into more creative positions by freeing their hands from menial work like assembly line production. 

So, are industrial robots killing jobs or creating better ones?

Before we discuss the core of this question, it is essential that we first understand how industrial robots are impacting the manufacturing sector. It is important to look at this trend from both a macro and micro perspective to get an accurate understanding of what future employment will look like.

Zooming in and out on the impact of industrial robots in manufacturing 

From a macro level, McKinsey & Company’s research on “The Future of Jobs: Working in 2030” indicates that while the manufacturing sector is predicted to remain an important source of employment in 2021, there will be a decrease in direct and indirect labor. It says that “the number of people required to manufacture products will drop by 20% to 25% by 2025” and this industry is expected to lose 8% of its employees over the same period. These findings are similar to those of an Oxford Economics study that predicts manufacturing jobs will decrease by 20 million by 2030.

On a micro level, it is possible to analyze how industrial robots are already affecting individual companies and their workforce today using job-level data from global companies. Data and analytics company Smart Cube conducted analysis on the employment data of 10 manufacturing companies from different industries in North America and Europe. The study revealed that, when comparing two similar plants with one using industrial robots and the other without automation, on average worldwide there is a reduction of 38% in direct labor rate (the number of employees required to produce a given output).

So, what does this mean for people? There are two kinds of manufacturing in the world: labor intensive and capital intensive. Labor-intensive typically means low wages, poor working conditions, and very little investment in technology. On the other hand, capital intensive means high wages, good working conditions, and heavy investment in robotics. The biggest takeaway here is that employees in high-skilled, engineering jobs are benefitting from the use of robots while low-skilled workers are losing their jobs because they cannot compete with the robots’ speed. However, in the capital intensive environment, robots create new jobs by doing menial tasks for those with higher level positions:

New types of workers: automation technicians, robot programmers, homebuilders who can understand smart systems and how they work, architects who can understand the safety, structure, and flow of buildings with automation, smart home system designers

New types of managers: business owners who can run automated construction companies where all machines are controlled by A.I., engineers who can design homes with integrated smart systems

New support staff: data scientists to collect information about customer preferences and optimize smart systems for them, engineers and data scientists who develop new smart systems

All this amounts to a huge increase in construction jobs over the next few decades. According to projections, there will be about 25 million new jobs in construction over the next few decades.

Robotics as a key enabler of new jobs in automotive and electronics industries

Coined by researchers from Harvard University, “the paradox of automation,” found that adding more robots to a mid-20th century U.S. factory resulted in higher employment overall, not lower — mainly because the added efficiency freed up workers’ time to do other things like improve products or processes, or even create entirely new products. 

Another study by the National Bureau of Economic Research found that for every robot introduced into U.S. industries, both high and low skilled occupations increased — and not just in the industry where robots were implemented, but throughout the economy as a whole. Furthermore, the World Economic Forum estimates that automation will create a net gain of 58 million employment opportunities. Around two-thirds of the jobs that will be disrupted by automation will need higher levels of education, while the remaining third will require less.

Industrial robots are expected to have a massive impact on jobs worldwide but from what we can see so far, the major reduction in manufacturing employment will not create many job opportunities. On the contrary, there are two key industries that will benefit from the impact of industrial robotics: the automotive industry and the electronics manufacturing industry. 

Automotive Industry

During the first wave of industrial robotics, it was estimated that over 80,000 automotive jobs were lost across the U.S. and parts of Europe due to increased automation. However, there is also a positive side to the fact that there are fewer people working on automotive assembly lines and it’s important to recognize this. Firstly, with robots replacing high-risk assembly line jobs over time, roles that are not as dangerous will be reserved for actual humans in the future (for example the quality assurance position). Also, there will be new jobs such as robot technicians and engineers to build, program and maintain robots on the assembly line.

There are over 300,000 robot installations in factories around the world (not including service, automating or other types of robots) and China, Japan & South Korea account for 70% of these. This means the market will keep growing exponentially in the coming years, and the need for robot technicians and engineers will increase. According to Sokanu, the robotics engineer job market is expected to increase by 6.4 percent between 2016 and 2026. And over the next 10 years, the U.S. alone will need 12,500 engineers in the field. 

These technicians will need specific education and training in order to work in this industry as they will be responsible for maintenance & repairs, teaching co-workers how to program or use a specific robot and working on improvements on current models.

Electronics Manufacturing

Robots are becoming a major part of the electronics industry, making up nearly as much market share in 2018 as they do for the automotive industry. This rapid growth is detailed by RIA statistics on global robot shipments which show that worldwide robotics increased 22% from 2017 to 2018 and now represents one-third of total supply according to the World Robotics Report by International Federation of Robots (IFR).

The dominance of the electronics sector in robotics demand can be largely attributed to several factors. First, modern robots are faster, more precise, and they provide higher security — a lot of effort and time has been invested in the development of motors, sensors and electronics that put them in motion. Second, competition is driving companies to seek labor cost savings, increased part quality and production flexibility through automation. Third, companies are building smart factories that use IoT technologies to make automation more efficient in terms of cost and time-to-market.

While the labor vs. capital investment dilemma has been a longtime debate for manufacturers around the world, robotics is quickly emerging as one of several key enablers of smart factory and Industry 4.0 technologies. The use of robots can improve the flexibility and speed at which goods are produced, while also freeing up human employees to focus on higher-value tasks, such as product design or process enhancement. Because of this, humans will be able to focus more on developing high-value products, rather than focusing on the monotonous and tedious tasks.

The bottom line is that industrial robots are here to stay not as a substitute for human labor but rather as a complementary force that can free us up to work on higher-level tasks and more creative activities. 

A soft-grab robotic hand to the rescue: freeing human hands from tedious tasks and creating new employment opportunities 

Soft-grab robotics technologies are designed with the intent of minimizing the risk of injury while using a robotic arm to pick up products or parts. This type of technology makes it much easier and safer for a human worker to operate a robotic arm without dangerous consequences (i.e. getting the arm caught in between two pieces of machinery, or worse).

Soft-grab robotics requires minimal area and is created with an ergonomic design that works well within most manufacturing facilities’ current layout. These benefits, as well as the safety aspect, make soft-grab robotics an ideal solution for helping manufacturers create new jobs in their factory’s assembly line.

At HTEC Group, we are proud to be a part of the forward-thinking digital transformation movement in electronics manufacturing. The manufacturing industry in Serbia received a major boost when HTEC Group, The University of Nis, and FTN joined forces to create an innovative robot hand. This soft-grab three finger robotic hand was designed for use at warehouses or manufacturing facilities and is funded by the Innovation Fund of Serbia. 

The idea of soft-grab robotics entails being able to grasp objects without damaging them, which can be a tricky endeavor due to varying widths, softness and hardness of objects. With our technological capabilities, HTEC group became involved to assist the engineers in developing this cutting-edge technology that will allow for a cost-effective and production ready three-finger robotic hand devices that are now at their final stage of development.