In this sector the relationship between automation, employment and productivity are investigated through measurements based on the industrial robots. It is assumed that the effects of technological progress on employment might significantly depend on the perspective of time. Thus, the short run and the long run were both considered in the study. In the long term, it may attain higher rates of production and lead to cost reductions with regards to labor. Therefore, in this case, automation may affect employment but at the same time, it could be highly favorable from a long-term perspective as compared to a short-term angle. Hence, the findings mainly rely on the short and long-term effects of automation based on the views gathered from the respondents.
A robot’s capacity to perform autonomous movements as well as its ability to do many tasks has grasped the society’s attention. Currently, industrial robots seem to have dramatically increased especially in terms of their replacement of human labor as compared to the other older versions of machines because they minimize the requirement for any human intervention during the automated processes. The typical industrial robots applications include welding, processing, handling, dispensing and assembling which are more prevalent particularly in the manufacturing industries; this is also seen in the inspection of structures and equipment (in power plants) as well as harvesting (agricultural sector).
It is important to note that rapid technological advancements reduced costs of the industrial robots by almost 80 percent between the years 1993 to 2007. It does not come as a surprise however that the utilization of robots has significantly grown during this era whereby the number of robotics to the hours worked ratio went up to almost 150 percent. The increase in the use of robots was specifically pronounced in Italy, Germany, and Denmark; the industries which increased utilization of robots were the transport equipment producers, metals and chemicals. In order to have an accurate estimate of the effect of robots, we have to take advantage of the variation that exists across the industries over a period of time.
As a result, a repetitive result comes up whereby robots somehow appear to increase productivity without influencing the overall hours to the decline because of the offsetting effects. The findings of this study show that a large number of manufacturing industries use machines and robots in their establishments and this is represented by the 18.1 percent mark. This shows that the industry has responded well to technological advancements and it still plans to utilize its abilities in future. However, it is clearly evident that the organizations categorized in the non-manufacturing sector are enthusiastic for the technological advancements whereby they feel that they can attain benefits from the technology revolution. The results also show that 816 employees showed a positive attitude towards technological expansion because it did not threaten their jobs while 253 employees felt that their jobs could be at risk of being taken over by robotics and machines.
The responses with regards to the effect of the diffusion and development of robotics and Artificial Intelligence on future manufacturing activities simulated that the positive responses represented 27.5 percent while those that rooted for its positive impact represented 23.6 percent and this is more than the negative responses. The ones that said that it would have a negative impact represented 1.3percent while 1.0 percent said that it could have “significant negative impact”. However, over 70 percent of the industries do not possess a precise outlook whereby they gave responses of neither negative nor positive. In terms of industry, the companies that operated within the ICT industry showed a more positive attitude on the effects of robotics and Artificial Intelligence (42.3percent) and this was closely followed by the manufacturing organization (32.5 percent). Nonetheless, most organizations within the service industries showed positive attitudes. The overall size of organizations that showed positive attitudes amounted to 607 employees which is more than negative attitudes that represented 298 employees which shows a difference of one percent.
The perceptions on effects of robotics and Artificial Intelligence with regards to employment is majorly negative whereby 21.8 percent of the organizations responded that diffusion and development of modern technologies can decrease a number of employees working for them while the other part of the organizations expected positive impacts on their employees but the percentage representation of this was only 3.7 percent. On the other hand, 28.6 percent of the companies expected no effect of the robotics and Artificial Intelligence on employment while 45.8 percent of them gave a ‘do not have an idea’ response. Apart from the ICT industry, the firms that expected a negative effect on employment were larger than the ones that expected a positive impact on employment. However, advanced technologies like robotics and Artificial Intelligence could form new employment chances which are now unimaginable; firms that are technology-intensive have emerged and could create a lot of new occupations. Cross-tabulation of the results of the above two questions showed that the firms feared the negative effect of robotics and Artificial Intelligence on their operations and this tends to have influenced the negative views of the employees with regards to the safety of their employment.
The lessons that have been attained from this technological revolution show that it is possible that companies with significantly low-skilled employees can be affected negatively by it while those that have employees that are highly skilled could benefit immensely from this revolution. In order to examine the technology skill complementarity, the link between attitude towards modern technologies and employees education level will be compared. Firms that indicate a positive attitude to technology possesses employees that are highly educated. Furthermore, the ratios of the postgraduate degree holders and university graduates of the firms were 1.9 percent points and 11.9 percent points respectively and this is significantly higher when compared to firms that responded that technology was not related to their operations and these differences are statistically relevant at a one percent level.
These same relationships could be seen with regards to firm attitudes when it comes to the effect of robotics and Artificial Intelligence on business. The firms that expected positive results on their businesses had relatively high ratios of the university graduates (2.5 percentage points) and the employees that had postgraduate degrees were 1.8 percent points more than the other firms. The technology-skill complementarity was confirmed after controlling industry and firm size by ordered-probit estimations. Interestingly, the university graduates ratio was 5.9 percent points lower in all the firms that anticipated the negative effect from robotics and Artificial Intelligence on employment than the ones that expected neutral or positive impacts. In summary, the results presented here show complementarity between modern AI-related technology and the skill levels of the employees.
The interest in application and development of technology, Artificial Intelligence, and robotics could lead to fierce worldwide competition. With regards to this, the geographic market space of companies’ services/products was cross-tabulated as well as the attitude towards Artificial Intelligence related technology. The firms that are selling their services or products internationally tend to show positive attitudes when it comes to technological advancements. 25.2 percent of the companies had positive attitudes with regards to utilization of technology while 28.6 percent of the firms expected robotics and Artificial Intelligence to impact their international businesses positively. The figures are significantly higher as compared to firms that have negative attitudes which are 17 percent and 15 percent respectively; the differences were statistically significant. It is important to note that cross-sectional links that have been described are not necessarily causal. These results can be interpreted to become evidence of an interdependent relationship between utilization of modern technologies and globalization.