Productivity Growth
As pointed out in the case of both China and US, the use of robots has become inevitable due to increasing in the e-commerce boom, decrease in the basic level workforce availability and increase in the demand as well as shortening the lead time. All these as actually lead to a higher productivity through technological advancement. This also leads to achieving higher living standards low prices, higher wages and an overall bigger variety of products and services available for consumption. The productivity growth is a function of three factors: quality of labor, capital and total factor productivity (TFP).
The quality of labors can be increased by education and training. Capital can be increased by investment in humans and PPEs where TFP comes from the synergy between labors and capital working in the most efficient way possible. Even if we keep the labor productivity constant, an increase in capital investment in robotics brings up the productivity growth inevitably.
Gross Domestic Product
The GDP is a function of prices and output. As pointed out earlier the more investment in robotics is increasing at the output with driving down the prices due to economies of scale. So an increase in productivity is leading to increasing in GDP. As per the research done by two economists from London Business School in 2005 by studying the economy of the United States and 16 other countries, and analysing a wide array of data for a period of 15-year period found that on average the increasing investment and usage of l robots in industry has increased the annual GDP growth rate by 0.37%. The comparison was done with the substantial growth achieved in the 20th century through steam engine technology.
Job Creation
While people are arguing that robots are replacing human workforce, they are not understanding that the use of robotics is actually leading to creating new jobs which are highly paid and requires skilled workers. The low skilled human jobs are replaced by robots and human is transiting towards higher value-added w0rk. As an example, the robots can do the repetitive task of shorting the or stocking whereas a human will be more work towards operating the robots and checking the quality of the final product which requires higher skills.
As per the prediction of labor shortages in U.S. or Europe and the pressure on the supply chain for faster deliveries and more accurate operating rhythm is making the decision makers invest in robotics. For example, as per a forecast made the investment in warehouse robotics will rise from $ 1.9 Billion in 2016 to a staggering $ 22.1 Billion in 2022. This will require more warehouse operator jobs as pointed out earlier in the case of Amazon.
Robot Tax
While the automation and robotics are bringing prosperity to the counters, there are people like billionaire philanthropist Bill Gates or Elon Musk who believes that the companies should be taxed for the use of robotics. As per them, since in many cases, the robot replaces a human employee which is a taxpayer it reduces the taxable income of the government.
According to him, the amount collected through this should be used in the social security of elderly generation, lower earning community or working on education of kids whose needs are unmet. He also believes that this amount can be used to train the workforce for building on the skills sets required for the jobs. This could help in slowing down the pace of automation. that's because the technology and business cases for replacing humans in a wide range of jobs are arriving simultaneously, and it's important to be able to manage that displacement.
South Korea has introduced the first "Robot Tax" in the world with a fear that mass automation is will lead to huge job losses in displacements. The country has limited the incentive investment in automation, which was actually used to boost up the productivity.
While people who argue against it say that taxing robot could slow down the innovation and can leave the company/county behind in the current rapid expansion of Technologies. For example, according to EU Commissioner Andrus Ansip, who is given the task of bringing Europe to the digital age, has disagreed with. He supports his argument by saying that imposing tax will simply allow someone else to lead, leaving Europe Behind. Also, it will be difficult to decide where the use of robots have simply increased the productivity and where it has replaced human how much is the tax loss to the government that varies from company to company and industry to industry. So it will become a complex problem.
As we understood, the companies or Industries that should be subjected to robot tax discussion should be those where robots replacing human can have a considerable impact on the national tax revenue.
The most likely companies to discuss in a short-term for robot tax are that a few high-profile industries could be hit with a tax at a national or local level. Such examples could include self-driving car or trucks or even delivery drones, which are all very easily seen as job-taking "robots" by the public. Policies could target them with a special fee to fund the retraining of drivers & delivery boys they have replaced or to make up lost revenue due to tax. However. In case of US, both drone and Truck are actually filling to void of extra manpower needed due to increased demand and productivity against the shortage of basic workforce, whereas in case of China the labor force to perform such activities is still there so that the policies of both governments will vary.
Conclusion
So are we heading towards an era where most of the workforce will comprise of robots and only handful amount of people will be working? Probably not in near term. Even the latest bot required to be configured to perform various operations. There will be people operating or maintaining those robots, trucks or drones.
From USA perspective, it will not be a big decision to make for policymakers since it comprises of a small amount of GDP, there already exist shortages of low skilled manpower to perform such tasks. For them, it will be easier to manage considering it has a high set of skilled manpower and is the more technological advancement.
On the other hand, for a country like China which has risen through its leverage on high availability of low to the medium skill set labors, the equation would be completely different. Also, logistics comprises of a considerable amount of its GDP and they are not quite a technological advance as the USA. So for a country like China if it wants to leverage through technological advancement it has to ensure the investment in the education and skill set development of the workforce, should allow an incremental rather than an exponential advancement which would allow them a smooth transit rather than a situation where robotics and automation could lead to increase in unemployment.
There is one fundamental thing. To embark on enhancement through robotics and automation requires significant thought process and long-term strategic planning.
“A future where robotics would free workers from mind-numbing jobs so they could pursue more rewarding fields that would open up in areas not yet imagined.â€
-THE ORIGIN, DAN BROWN