Academic research suggests that nearly 50% of jobs in the United States are at high risk of automation in the future (Frey and Osborne 2017). The risk of automation can be higher in developing countries, with up to 70% of jobs at risk (WorldBank 2016, Nedelkoska and Quintini 2018).byRobotThe types of jobs affected by pervasiveness and automation can be very high in manufacturing.
EBRD Chief Economist (Cevat Giray Aksoy) and EBRD Research Director (Ralph DeHaas) have focused on the popularity and automation of robotics based on the EBRD’s 2018-2019 Transformation Report. The European Bank for Reconstruction and Development focuses on developments in the technology sector and has 59 member countries including China. The report focuses on the state of the development bank’s member countries.
Key observation one:Industrial RobotThe army is growing
The number of industrial robots around the world is on the rise (Figure 1), both in absolute numbers and as a percentage of employment. In fact, the total global stock of industrial robots is expected to grow by 14% annually, reaching 3 million in 2020. Data in 2016 showed that the number of industrial robots used in regions in the transitional stage of industry was 41,000, up from 1,500 in 1993. The vast majority of robots are deployed in manufacturing, especially the automotive industry. But industrial robots are also increasingly used to produce plastics, chemicals and metals.
Figure 1 Industrial Robot Inventory is Growing Worldwide
Source: International Federation of Robotics (IFR) and European Bank for Reconstruction and Development (2018).
Key observation 2: Although developed countries use more industrial robots, some transitional countries are accelerating the adoption of industrial robots.
The extent to which robots are used in manufacturing varies by country (Figure 2). The Slovak Republic and Slovenia (more than 93 robots per 10,000 manufacturing workers) have levels comparable to advanced economies and higher than Brazil, China, India and South Africa. The ratio of robots to manufacturing workers has also increased rapidly in Hungary, Poland, Turkey and Romania. By contrast, countries such as Moldova, Morocco and Serbia still have fewer than two robots per 10,000 workers.
Figure 2: Number of robots used per thousand manufacturing workers
Source: IFR, ILO and EBRD (2018).
Note: Data relate to 2016.
Figure 3: Impact of Robotization by Gender, Age Group and Educational Level
Source: Eurostat, IFR and EBRD (2018).
Note: Based on regression analysis of individual demographic groups, 95% confidence intervals.
Key observation 3: The popularity of robots has only led to a slight decrease in the employment rate
To what extent has the popularity of robots affected employment in Europe? As you can see, two different channels may be at play. First, robots can directly replace workers. Second, companies that have increased their productivity due to Robot ubiquity and automation are also likely to increase their use of robots. In an analysis by two EBRD experts, including 11 economies in transition, it was estimated that every additional robot per 1,000 workers would reduce employment by about seven per thousand (7‰).
Between 2010 and 2016, only 13 percent of the decline in employment was attributable to the popularization of robots. In other words, most of the overall decline in employment cannot be explained by robots taking jobs from humans. There were no statistically significant differences between men and women or between younger and older workers in the impact of robotic adoption. So it cannot be asserted that robots are taking jobs from men and women, or taking jobs from older people and young people with less work experience. Perhaps unsurprisingly, however, among the human impacts of robots that have been exposed so far, those with relatively low levels of education have had the greatest impact (Figure 3). However, as technology develops, things are likely to change.
Key observation 4: A few happy and some sad, different occupations and industries are very different
In transitional areas of industrialization, there are several types of work that still require psychological preparation. Occupations including food preparation assistants, cleaners, helpers, assemblers, garbage workers, drivers, and cell phone factory operators face the highest risk of automation (Figure 4). Occupations that require substantial analytical skills and/or a high level of social interaction, such as managers, professionals and senior executives. These occupations that are least likely to be automated can sit back and relax when faced with the challenges of industrial robotics.
Figure 4: Occupations projected to be most and least affected in transition countries
Source: Nedelkoska and Quintini (2018) and European Bank for Reconstruction and Development (2018).
Note: A job is defined as having a high risk of automation if greater than 70% of the work tasks involved may be at risk of automation.
Definition work is at high risk of automation if 50 to 70 percent of the tasks involved are at risk of automation. Occupations with fewer than 10 observations in four or more countries were excluded.
However, the “Fourth Industrial Revolution” has polarized employment, reducing the demand for middle-skilled workers and increasing the demand for high-skilled and low-skilled workers. At this stage, low-skilled workers have not been the main target of technology replacement in the previous rounds of technological development because the cost is low enough. However, the popularization of robots has become unstoppable, and low-skilled jobs are increasingly at risk.
Finally, the two experts pointed out that the popularization of industrial robots and the rise of automation could lead to major changes in the labor market in transition countries. Governments should be prepared to guide this process wherever possible, including by providing effective and adequately incentivized social protection; encouraging re-education and lifelong learning; and helping workers upgrade their information skills.
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