First World Problems and the Role of Automation
There's a popular meme these days called #firstworldproblems that slyly probes the dark side of modern-day life. Tragedies like when you can't find someone to wash your airplane, you have to settle for 3G, or they use non-organic avocados on your toast. But there's a legitimate #firstworldproblem out there these days that not enough people are talking about.
June 5, 2018, was a significant day in U.S. history. On that date, the U.S. Labor Department reported that there are more jobs available than people currently seeking work. As a result, American businesses are suffering because they can't find enough workers.
Despite the common narrative, supported by sci-fi analogies and dystopian references that robots are stealing jobs, the reality is far less cinematic. It is my contention that robots and automation are the best and fastest way to pull ourselves out of our current #firstworldproblem. For many employers, this news only reinforced what they were already experiencing.
A Deloitte Consulting survey reports that manufacturing executives are worried that around 60 percent of current open positions in their businesses are unfilled due to lack of skilled workers, and as many as 2.4 million manufacturing jobs will be going unfilled over the next 10 years due to widening skills gap.1 One company in Indiana was so desperate for workers that it instituted drug rehab training to increase its pool of potential hires.2
Long-haul trucking is currently experiencing the worst worker shortage it has ever had.3
A growing warehouse market, combined with an aging workforce, has contributed to an "unprecedented labor shortage" according to one report.4
In California, there are four jobs open for every applicant5, and the implication of not finding workers is severe. In Santa Barbara County (CA) last year, $13 million worth of produce was plowed under as a result of labor shortages.6
So let me repeat: there aren’t enough workers. If we don’t automate ourselves out of this problem, the implications for the economy will be profound.
Robotics has traditionally been cast as solving problems around three job types: dirty, dangerous and dull. The 3Ds, as they are known, cover a lot of ground. There’s a great deal of economic benefits to be gained through the adoption of robotic technology.
In fact, adoption of robotics and related technologies is well underway and showing no signs of slowing down. In the United States robot shipments have grown at a compound annual growth rate (CAGR) of 7.2% since 2007, and the International Federation of Robotics (IFR) is estimating that growth will accelerate to over 10% during the next 5 years.
One of the drivers of this adoption is increasing affordability of the technologies. Average revenue per robot shipped to North American customers has decreased 11.4% since 2007. During that same period, annual shipment volumes have more than doubled (14,920 units in 2007 to 33,575 units in 2017, a 125% increase). Small and medium sized companies especially are finding it’s easier to justify their automation investments and improve ROI.
The growing adoption isn’t just prevalent in traditional factory applications like the mature automotive industry either. Over the past five years, growth in non-automotive industries has outpaced growth in automotive for the first time in history (10% CAGR vs. 9% CAGR respectively; North America). Included among the rapidly growing non-automotive segment are industries such as life sciences, electronics, food and consumer goods, plastics, and metals.
Reports have been competing for years about whether robotics creates or destroys jobs. But it’s that kind of either/or mentality that contributes to a negative public perception of robotics. Yes, robotics and automation will replace some jobs, but will it give more than it takes? The answer is more often a resounding yes. Historically, more robots mean more jobs. When robot density goes up, unemployment goes down.
That worm is starting to turn according to recent reports. The World Economic Forum has recently reported that 75 million workers will be eliminated by automation; but also predicts that 133 million new jobs will be created by improvements in automation.7
Another word for automation is ‘progress’ and a recent report from ITIF claims that the U.S. is lagging in its adoption of robots.8 While that might seem inconsequential, if this U.S. doesn’t automate itself out of the latest worker shortage, some other country will step into the breach. As Robert Atkinson, ITIF Founder and President recently told The Wall Street Journal: “You either adopt automation or you see jobs go overseas to the countries that do.”9
There’s no question that job loss is prevalent and often traumatic. But the reality is that technology advances have always changed the nature of jobs and well before the ubiquitous Luddites. Did you know that Roman Emperor Vespasian dealt with this issue in A.D. 72?
So let’s stop demonizing robots and automation, get to work, and fix this #firstworldproblem. If we focus on our fears, we will miss the opportunities. The next time your barista uses caramel instead of hazelnut on your Venti iced skinny macchiato or Trader Joe's runs out of matcha lemonade, remember that there are some real #firstworldproblems out there.
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