Fact of the Week: Increasing Industrial Robot Adoption Between 2000 and 2014 Increased Employment by 5 Percent and Value Added by 12 Percent

Source: Mahdi Ghodsi, et al., “Robotisation, Employment and Industrial Growth Intertwined Across Global Value Chains,” Vienna Institute for International Economic Studies Working Paper 177, April 2020.

Commentary: The automation of manufacturing industries is a major public concern due to the salience of layoffs that are directly attributed to robot adoption. But closer analysis of automation’s impacts generally reveals that these fears are overblown. This is driven home by a new study of industrial robot adoption across 41 countries between 2000 and 2014. Controlling for country and industry effects, it finds that robot adoption has increased employment and real value added annually by 0.32 and 0.78 percent, respectively, which reflects an overall increase of 4.6 and 11.5 percent over the entire period. Further, the effects on manufacturing are positive as well, with the industry capturing approximately 53 percent of the gains in employment and 71 percent of the gains in real value added.