Manufacturing jobs—will they be people or robots? Whenever I am presented with an either/or I tend to think why not both or neither. Four choices, not two. In this case, three choices since neither means no manufacturing. And every country on God’s good Earth wants manufacturing. Just check out all the government initiatives underway.
Within the past week, I’ve seen two articles in local newspapers—The Sidney Daily News and The Dayton Daily News—parroting the New York Times article about how robots take jobs away from people.
This week was the biennial edition of Automate—the trade show of Association for Advancing Automation (A3). A3 released a white paper for the show, and I had a chance to sit with two association executives, Bob Doyle and Alex Shikany, to discuss the findings and analysis leading up to the white paper Work in the Automation Age: Sustainable Careers Today and Into the Future.
“As a representative of over 1,000 companies and organizations making up the automation ecosystem, A3 believes it is critically important to clear up some of the confusion surrounding the relationship between automation and jobs,” said Jeff Burnstein, A3 president quoted in the press release. An admirable goal.
My take is that I agree with pretty much everything they found with one addition—I still believe that manufacturing enterprise executives bear much blame for problems with manufacturing in America. Such things as management-by-spreadsheet, no passion for products or customers, faddish reactions (such as unintelligent offshoring), and lack of investment.
Technology Makes Lives Better
We discussed that humans have been developing technology to increase production and make lives better probably since there were humans on earth. Recent discussions that cover only the past 250 years or so with technology advancing from steam to electricity to IT-driven human prosperity and quality of life have all advanced.
Let’s look at a summary of findings. Here are some surprising facts.
More robots, more jobs.
As employers add automation technologies such as robots, job titles and tasks are changing, but the number of jobs continues to rise. New technologies allow companies to become more productive and create higher quality products in a safer environment for their employees. This allows them to be more competitive in the global marketplace and grow their business. We see this in the statistics: over the seven-year period from 2010 to 2016, 136,748 robots were shipped to US customers—the most in any seven-year period in the US robotics industry. In that same time period, manufacturing employment increased by 894,000 and the US unemployment rate decreased from 9.8% in 2010 to 4.7% in 2016.
Specifically looking at two companies, Amazon had more than 45,000 employees when it introduced robots in 2014. While the company continues to add robots to its operations, it has grown to over 90,000 employees, with a drive to hire more than 100,000 new people by the end of 2018. Similarly, General Motors grew from 80,000 US employees in 2012 to 105,000 in 2016, while increasing the number of new US robot applications by about 10,000. We see similar results from multi-national companies with thousands of employees, to small manufacturing companies.
The skills gap and its impact.
Skilled workers are key to companies’ success and countries’ economic development. Employers rank the availability of highly skilled workers who facilitate a shift toward innovation and advanced manufacturing as the most critical driver of global competitiveness. But studies show an increasing skills gap with as many as two million jobs going unfilled in the manufacturing industry alone in the next decade. Fully 80% of manufacturers report a shortage of qualified applicants for skilled production positions, and the shortage could cost US manufacturers 11% of their annual earnings.
Changing job titles reflect changing tasks.
In the automation age, as in the computer age before it, job titles shift to reflect the impact of technology. A recent study concluded that occupations that have 10% more new job titles grow 5% faster. Just as we saw the rise of entire industries around previously unheard-of job titles in cloud services, mobile apps, social media, and more, we’re seeing similar shifts in the automation age. As lower-level tasks are automated with advanced technologies such as robots, new job titles and industries arise across nearly every economic sector.
Supply and demand and wages.
In the manufacturing industry, which is the largest user of automation today, the skills gap is driving up what are already strong wages and benefits, well over the US average. In 2015, manufacturing workers earned $81,289 including pay and benefits compared to $63,830 for the average worker in all nonfarm industries. And 92% of manufacturing workers were eligible for health insurance benefits. Despite that, manufacturing executives reported an average of 94 days to recruit engineering and research employees and 70 days to recruit skilled production workers.
Bridging the skills gap with innovative training.
Automation age jobs range from well-paying, entry-level and blue-collar positions through engineers and scientists. Stable automation-age manufacturing jobs can start at $20 per hour with just a high school diploma, a few months of automation training, and professional certification. Employers, vocational schools, and universities are offering innovative training approaches that give workers alternatives to the traditional (and expensive) high-school-to-college-to-job route. And employers such as GM are revitalizing apprenticeships, recognizing the significant advantage those programs offer.
Consider this equation
Automation –> Increased Productivity –> Improved Competitive Position –> Company Growth –> More Jobs