There is no denying that robots are taking over jobs. For sure, 2.7 million robots, as of 2020, working factories around the world have taken over at least six times more jobs than the robot population. Studies suggest that the portion of tasks performed by machines will jump from 30 percent in 2020 to as high as 50 percent by 2025. Like many other countries, is it a concern for China? Perhaps, No. Contrary to the common fear of job loss, Robot has become an essential strategy for China to protect jobs. It’s a great favor for creating office jobs for the educated next generation. Robots are a blessing in disguise for China to replace the aging workforce on the factory floor and protect office jobs.
The replacement of the aging workforce with robots prevents or slows down the outmigration of factories. Hence, robots have become a savior to keep factories in China, consequentially protecting and creating office jobs. Therefore, Robots are protecting office jobs in managing those factories, which were candidates of outmigration due to the aging workforce. Furthermore, due to robots, China has been improving its eligibility to perform high-precision manufacturing tasks, creating additional office and support jobs.
Often, the news of job loss caused by automation makes us nervous. According to a recent study by Oxford University, all the developed nations will suffer from a job loss rate of up to 47% within the next 25 years. Some studies indicate that developing countries like India and China, and the least developed countries like Cambodia or Ethiopia, will suffer an even more significant percentage of job loss. How will China having the largest pool of labor-intensive manufacturing jobs be affected by Robots? The reality always does not alike in all countries and industries.
Robots raking over jobs is bound to happen:
Is it for the economy as a whole? That depends. In a globally connected economy, if a firm or a country relies on just low-skilled labor, the progression of technology is harmful. But if a country would like to move the human resource to more value-added output by delegating low-skilled tasks to machines, technology is a blessing. On the other hand, if a country suffers from a decaying workforce due to aging and other factors, robots to replace the human workforce on the factory floor appear to be indispensable. Furthermore, by delegating high precision roles to robots, a firm can create low-skilled supports jobs for human workers. Hence, the future of work due to robots taking over jobs will keep unfolding.
For China, Robots taking over jobs is a blessing for four significant reasons:
Aging workforce
Due to the one-child policy, China has been rapidly suffering from an aging workforce. Hence, an aging population in China also necessitates automation. The working-age population, aged 15 to 64, could drop to 800 million by 2050 from 998 million today. Over the next 10 to 15 years, China must kill 100m factory jobs with Robots. Otherwise, these factories will migrate to other low wages countries. Fortunately, robots have become cheaper than the labor of even Bangladesh or Vietnam. As a result, Robot has become a strategic tool for China in reducing factory out-migration. Thereby, China will be able to protect high-income management jobs of those factories.
Rising wages
Wages in China are rising, and it’s becoming harder to compete with cheap labor. After decades of growth, rising wages consume profits and push manufacturing to Southeast Asia. Shanghai’s minimum monthly wage, for example, the highest in China, is 2,420 yuan (US$366.62), two and a half times what it was a decade ago. On the other hand, the minimum factory wage in Bangladesh is around $100 (as of 2017).
Educated workforce
China has made tremendous progress in expanding higher education. Growing university graduates are unwilling to take factory jobs, often left by their parents and grandparents. Replacing factory floor jobs with low-cost robots is offering the opportunity to protect and create office jobs for university graduates.
Higher value-productive knowledge
China is acquiring process optimization and technologically complex product development by working on assignments of building robots. Besides, work process re-engineering for delegating productive roles to robots is also expanding the skill base. This competence will be the vital underpinning of ‘Made in China 2015’. As a Chinese leader says, “The focus now is to encourage Innovation, encourage the development of automation and robotics technologies. And also encourage manufacturing companies to adopt robotics in the production line.”
Robot population on the rise: due to Robots taking over jobs
According to the International Federation of Robotics, China added 87,000 industrial robots in 2016, slightly below Europe and the United States combined. Chinese growth was forecasted to exceed 20 percent annually through 2020. One example is the massive iPhone producer Foxconn, officially known as Hon Hai Precision Industry. According to CNBC reporting, between 2012 and 2016, Foxconn’s operating revenues increased slightly, but its headcount declined by almost one-third. According to some estimations, tens of thousands of “Foxbots” factory robots deployment killed MORE THAN 400,000. And this trend is likely to continue. As reported by Reuters, in 2017, one of every three robots sold in the world went to China, which purchased nearly 138,000 units
Robots making in China:
Chinese companies not only adopt robots they also manufacture them. Made in China 2025 plan encourages automated processes and intelligent manufacturing. With local and national government funding and policy support, approximately 3,000 robot makers or solutions providers were launched between 2014 and 2016. These robot companies are manufacturing and innovating robots.
For example, Beijing-based Geekplus Robotics develops logistics and warehousing applications, which e-commerce sites, manufacturers, express deliverers, supermarkets, retailers, and pharmaceutical companies use to sort, pick and move inventory. Instead of having human “pickers” running around warehouses scouring for goods, which companies traditionally do, Geekplus’ 3-foot-long bots carry boxes of goods to stationary human operators. This slashes human exertion and retrieval time. According to Geekplus, their systems reduce headcount needs by 50 percent to 80 percent and floor space by 30 percent.
Robots to make robots in ABB’s new China plant: As reported by Reuters, at ABB’s new factory in China, Robots will make robots. The factory, located near ABB’s China robotics campus, is due to be operating by the end of 2020 and will produce robots for China and export elsewhere in Asia. ABB’s this new facility is designed to become the gold standard in the future for robotics factories. ABB envisions the future site housing (1) collaborative robotics, (2)artificial intelligence (AI) research, and (3) various digital technologies.
Robot is a survival strategy for China:
China is expanding its robot workforce as wages for human workers rise, and the country seeks to compete with lower-cost countries via greater automation. The robot is the survival strategy for China for keeping factories in China in protecting and creating knowledge-intensive. In a nutshell, Robot is a blessing for China. Killing factory jobs it’s going to develop high-value knowledge-intensive jobs for educated Chinese. Hence, Robots taking over jobs is not always bad. Hence as opposed to getting apprehensive, we should focus on leveraging robotics. For example, Japan took advantage of robotics to consistently increase the quality and reduce the cost of production.
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