The Robots-Are-Taking-Our-Jobs Threat Gets Real

The Robots-Are-Taking-Our-Jobs Threat Gets Real
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The coronavirus is hastening the need for a labor force that doesn’t get sick or locked down.

If there was ever a good time for the robots-taking-over-jobs argument, this may be it. Not just because factory owners don’t want to pay for rising labor costs, but because workers don’t want to gather every day in petri dishes.

Chinese manufacturing is facing a challenge since employees returned to production lines: keeping them on the job. Some companies reported a 90% turnover in workforce after the economy started reopening in March, compared to 25% to 30% in a normal, pre-coronavirus year. Such spikes are expected worldwide as lockdowns ease. The pandemic has made “humans the risk to continued operations” in supply chains, note analysts from Sanford C. Bernstein & Co. Leave aside how businesses reopen. The bigger question is, how will they be thinking about the future of their factories?

Re-enter the robot, or more precisely, automation, a trend that was already alarming labor advocates and will be aggravated by Covid-19. Nascent signs from the order books of industry giants like Fanuc Corp., Keyence Corp. and Harmonic Drive Systems Inc. point to businesses wanting to get their operations up and running – increasingly, without humans.

Industrial robot exports from Japan, the heartland of automation machinery, grew to some parts of the world from the previous year. Fanuc, maker of robots used in factories for companies ranging from Apple Inc. to Amazon.com Inc., saw orders in the fourth quarter to March climb 7%. Its revenues in the U.S. and China rose, while inventories of components ticked down as demand edged up. Bookings also increased for Harmonic Drive, which makes parts for small robots. This interest was manifested while the world was consumed by the initial shock wave of Covid-19, suggesting how big a priority automation has become.

There’s room for robots. Worldwide, density remains low as many companies have had little desire to deal with integrating them into operations, or in triggering politically sensitive social backlash. Still, nearly 60% of production work globally is in areas that can easily be automated. In China, almost 40% of jobs are machine replaceable. Differences across and within industries matter — robots do most of the stamping and welding in car factories, while humans conduct final inspections. Tasks requiring significant dexterity remain difficult for machines.

Source: Bloomberg

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