Where in the world are the robots?
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Where in the world are the robots?

Where in the world are the robots?

Posted on 2nd January 2019

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Happy New Year!  Our first blog of 2019 was previously published on digit.fyi at the end of last year, but don't let that put you off.  It's based on a really interesting article which I came across the other day on the World Economic Forum website.  This piece was based on research carried out by Robert D Atkinson and published on Information Technology & Innovation Forum, November 2018. Titled, “Which Nations Really Lead in Industrial Robot Adoption?” this examines, in some depth, the different rates of adoption of robot technology across the world and its implications for productivity.

It is well known that one of the biggest problems in the UK and elsewhere is the slow growth in productivity. The reasons for this are well known - including the commendable behaviour of many companies in retaining staff throughout the last recession and the rise of the self-employed contractor helping to make it easy for firms to dip in and out of the labour market and keep costs down. That said, with unemployment at very low rates and considerably skill shortages impacting not just in our field of IT but in other key sectors of the economy, an obvious solution is to make more use of automation and technology. 

We have been used to robots in manufacturing, but now their use is spreading into other areas.  This has profound implications for the politicians as they struggle to create the conditions for the economic growth that sustains society at large. It also offers a partial solution to the widely anticipated problems of labour shortages in areas such as hospitality and agriculture post-Brexit. Short of a major change to a socialist command economy (a distinct possibility in the view of some), economic behaviour is usually a rational response to changing circumstances. Each successive industrial revolution is driven by technological advances and, thus far, has usually resulted in greater prosperity for the majority. 

This is why, in my opinion, this study is so interesting.  For a long time, we have fondly believed that the west leads the world in the development of hi-tech. In the UK we have some stunningly good clusters of technological excellence, yet when we see just how far behind we actually are in the use of robotics it’s a real eye opener.

Atkinson’s study looks at robot adoption in 27 nations and adds in a control for different wage levels in each country examined.  Let’s start with the basic trends identified:

According to the International Federation of Robotics (IFR), the global average for industrial robots per 10,000 manufacturing workers grew from 66 robots in 2015 to 74 robots in 2016, to 85 in 2017.”

Broken down by country, this means South Korea was the world’s largest adopter of industrial robots in 2017, with 710 robots per 10,000 workers. At the other end of the scale came India, with 3 robots per 10,000 workers.  Interestingly, the USA is only seventh, with 200.  The UK was 21stof the 27 countries with fewer than 100 robots per 10,000 workers.  The data for all countries is shown below:

 

Source: “Which Nations Really Lead in Industrial Robot Adoption?” Robert D Atkinson, Information Technology & Innovation Forum, November 2018. 

The business case for using a robot is invariably based on the savings that accrue as a result. These savings are obviously directly related to the cost of labour in the country concerned, which is why Germany, with its high wages, has a far greater number of robots per 10,000 workers than low-wage India.

However, Atkinson then looked at a further, question, namely, “how do national economies perform in robot adoption when controlling for wage levels?” To cut a long story short (there were a lot of calculations involved!) he produced a table showing “Actual Robot Adoption Rate as a Share of Expected Robot Adoption Rate” (shown below).

 

Source: “Which Nations Really Lead in Industrial Robot Adoption?” Robert D Atkinson, Information Technology & Innovation Forum, November 2018. 

Atkinson describes what we see above thus: “Comparing the ranking of expected robot adoption rates to actual rates, several patterns emerge. The first is that, on a wage-adjusted basis, Southeast Asian nations lead the world in robot adoption, occupying six of the top seven positions in the ranking: Korea leads the world with 2.4 times more robots adopted than expected, followed in order by Singapore, Thailand, China, and Taiwan. Japan ranks seventh with 27 percent higher adoption rates than expected. In contrast, Commonwealth nations lag behind significantly, with Canada ranking 14th (44 percent below expected adoption rates), the United Kingdom 23rd (68 percent below), and Australia 24th (80 percent below).”

What does this all mean?  Well, I can’t put it any better than he does: “(the) Southeast Asian nations significantly outperform the rest of the world, and Europe and the United States lag significantly behind. If these gaps persist or continue to widen, it will bode ill for the future economy-wide productivity and competitiveness of Europe and America, and both regions will need to identify and adopt policies to dramatically increase their rates of robot adoption.” I would also add in that China, the soon-to-be largest economy in the world, is performing far better than you might have thought from the first chart.

Rather than being self-congratulatory about our (undoubted) digital skills and supportive of some outstanding start-ups, it’s time to wake up and smell the coffee. We must also, and this is a drum that Be-IT has banged for years, do FAR MORE to get our kids into tech and engineering. In contrast, China, as we know, is investing heavily in education and technology. Brexit, however it turns out, will not be made any easier by our failure to increase productivity by investing in both robots andhumans.  The fact that Europe is not any better in this respect is not any consolation and no excuse for complacency. 

Gareth Biggerstaff, CEO, Be-IT

Posted in News, Opinion


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