Robotics Poised to Increase Productivity and Reshore Manufacturing, New Report Shows

October 15, 2019

WASHINGTON—As the adoption and use of robotics increase, a new report from the Information Technology and Innovation Foundation (ITIF), the world’s top-ranked think tank for science and technology policy, evaluates the impact robotics is likely to have on the future of production. The report shows that robotics has the potential to reshore manufacturing production to developed countries, and it argues that most forecasts exaggerate the impact automation brought by robotics will have on employment.

“As robots get cheaper, more flexible, and more autonomous, they will power growth around the world and reshape global supply chains for decades to come,” said ITIF President Rob Atkinson, author of the report. “The global economy needs to increase productivity, and robotics is poised to do just that. Policymakers should support—rather than resist—the use of robotics in their countries.”

The report explains how improvements in automation technology such as robotics is poised to bring more automated work to developed countries, rather than offshore it to developing countries. While both developed and developing economies stand to benefit from the next production system, the report explains that higher-wage nations will get more of a productivity boost from these technologies than lower-wage ones; lower labor costs in developing economies provide less incentive to adopt automation equipment like robotics, and the new production systems enable shorter production runs, smaller factories, and higher productivity—all of which will work in the direction of reshoring to higher-wage nations.

The report also evaluates the research on the impact of improvements in robotics technology on labor-market churn, explaining that higher labor-market-churn rates are not associated with higher unemployment rates. Instead, contrary to much of the current handwringing, the evidence suggests structural unemployment will not increase, and labor will receive a significant share of the benefits.

Read the report.

For additional background, read ITIF’s recent report: Which Nations Really Lead in Industrial Robot Adoption?