Will Robots Create New Jobs?

January 31st, 2013

The International Federation of Robotics says yes!

To buttress its claim that automation is not a job killer but instead a way for the United States to compete against increasingly advanced foreign competitors, the industry group reported findings on Tuesday that it said it would publish in February. The federation said the industry would directly and indirectly create from 1.9 million to 3.5 million jobs globally by 2020.

The federation held a news media event at which two chief executives of small American manufacturers described how they had been able to both increase employment and compete against foreign companies by relying heavily on automation and robots.

“Automation has allowed us to compete on a global basis. It has absolutely created jobs in southwest Michigan,” said Matt Tyler, chief executive of Vickers Engineering, an auto parts supplier. “Had it not been for automation, we would not have beat our Japanese competitor; we would not have beat our Chinese competitor; we would not have beat our Mexican competitor. It’s a fact.”

While I am generally skeptical of a trade group that releases numbers predicting that its own thing will be good, it makes sense as a matter of comparative advantage. In the United States, robots will take over jobs that are being outsourced, and the service industry surrounding those robots will yield more jobs here in the United States. The simple economics suggest this is right.

Similar dynamics apply to the legal market.

This book disagrees with the book Race Against the Machine, which I blogged about last year.