If automation proves to have a more positive impact on employment than once previously thought, then it could greatly alter the national conversation surrounding workforce development and technological innovation.

Fact of the Week: One Dollar of Automation Spending Increases Sales by 37 Cents and Raises Profits by 78 Cents While Driving Down Consumer Prices by 5 Cents

While a labor shortage may drive up the cost of labor in the short run, in the long run it results in increased labor productivity and reduced prices.

Fact of the Week: Labor Shortages Increase Investment in Automation and Result in Productivity Gains for Some Firms

Automation boosts labor productivity, which is key to long-run economic growth. A new study examines the impact of automation on labor productivity in nine manufacturing industries across 12 European countries from 1995 to 2005, comparing the number of robots in use in an industry with the amount it invests in non-ICT capital.

Fact of the Week: Doubling the Intensity of Investment in Robots Increases an Industry’s Labor Productivity by 6.9 Percent, on Average

Fact of the Week: Doubling the Intensity of Investment in Robots Increases an Industry's Labor Productivity by 6.9 Percent, on Average

An October 2023 working paper found that a 1-percent increase in a proxy for robot exposure was associated with a 0.30 percentage point increase per year in productivity and a 0.15-percentage point increase per year in sales.

Fact of the Week: Robot Imports Improved Productivity of French Manufacturing Firms

Although automation in the German manufacturing sector decreased employment by 23 percent from 1994 to 2014, these job losses were fully offset by new job opportunities in the service sector, writes John Wu in Innovation Files.

Fact of the Week: In Germany, Manufacturing Jobs Lost Through Automation From 1994 to 2014 Were Fully Offset by New Service Sector Jobs

New research by economists at the University of Zurich tests the hypothesis that rising low-skill wage is a driver of automation by examining firm-level data of automation patents.

Fact of the Week: A 1 Percent Increase in Low-Skill Wages Increases Automation Patents by More Than 2 Percent Domestically and 4 Percent Abroad

While it may be tempting to focus on the direct job losses caused by robot adoption, it is wrong to conclude that automation constitutes a generalized threat to workers, either in manufacturing or in the broader economy. By choosing to automate, firms can increase their productivity, which allows them to expand and increase their employment.

Fact of the Week: Spanish Manufacturing Firms Increased Their Overall Employment by 10 Percent After Adopting Robots

If the United States wants to be globally competitive in automation-related technologies, especially vis-à-vis China, then policies to ensure higher wages for low-skilled workers are key, including expansionary fiscal and monetary policy for full employment, stronger limits on low-skill immigration, and a higher minimum wage.

Fact of the Week: Every 1 Percent Increase in Wages for Low-Skilled Jobs Leads to a 2 to 5 Percent Increase in Automation Innovation

French manufacturing firms located in more densely populated areas are 6.5 percent more productive than those located in less densely populated areas, writes John Wu in Innovation Files.

Fact of the Week: Increasing Investment in Capital and Automation Would Help, Rather Than Hurt, Manufacturing Workers

Related

Fact of the Week: One Dollar of Automation Spending Increases Sales by 37 Cents and Raises Profits by 78 Cents While Driving Down Consumer Prices by 5 Cents

Fact of the Week: Labor Shortages Increase Investment in Automation and Result in Productivity Gains for Some Firms

Fact of the Week: Doubling the Intensity of Investment in Robots Increases an Industry’s Labor Productivity by 6.9 Percent, on Average