Automation’s effect on labor demand has long been seen by the public as negative. Japanese researchers challenged this perception when they examined robots’ impact on employment across a range of Japanese industries from 1978 to 2017.

Fact of the Week: In Japan, a 1 Percent Increase in Robot Adoption Due to Lower Prices Leads to a 0.28 Percent Increase in Employment

From 2005 to 2016, economists Jon Chung and Yong Suk Lee found that, while robots initially led to lower employment and wages for affected workers, that trend reversed as firms and workers adjusted to the broader adoption of robots in production.

Fact of the Week: Each Industrial Robot Installed in Recent Years Created Between 13 and 16 Jobs

A study found that countries with the highest robot density will see accelerated economic growth from robot adoption and will also see heightened robot accumulation in the future.

Fact of the Week: Robot Adoption Leads to Economic Growth in Highly Productive Nations

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

The global average for industrial robots per 10,000 workers increased to 74 robots in 2016 from 66 robots in 2015, a 12 percent increase, writes John Wu in Innovation Files.

Fact of the Week: There Were 74 Industrial Robots per 10,000 Workers Globally in 2016, up From 66 in 2015, a 12 Percent Increase

The effects of robots on wages and employment can be said to have a “U shape”—lowering wages and employment initially, but with a diminishing impact over time, and then driving higher wages and more employment.

Fact of the Week: A 1 Percent Increase in the Use of Robots Eventually Leads to a 0.1 Percent Increase in Wages and a 0.06 Percent Increase in Employment

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

After South Korea reduced its tax credit for automation in 2018 from 7 percent to 3 percent for large firms, South Korean industries, on average, reduced robot installations by 28 percent compared with their Japanese counterparts.

Fact of the Week: Industries Impacted by a Quasi-Robot Tax in South Korea Reduced Industrial Robot Installations by 28 Percent

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.

Fact of the Week: Robot Adoption in Nursing Homes Is Positively Correlated With Productivity, Revenue, and Quality of Care

Related

Fact of the Week: In Japan, a 1 Percent Increase in Robot Adoption Due to Lower Prices Leads to a 0.28 Percent Increase in Employment

Fact of the Week: Each Industrial Robot Installed in Recent Years Created Between 13 and 16 Jobs

Fact of the Week: Robot Adoption Leads to Economic Growth in Highly Productive Nations