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Report – U.S. Lags in Robotic Adoption

Robots Sawyer and Baxter

Robots named Sawyer and Baxter (Jeff Green, Rethink Robotics)

19 Nov. 2018. A report released today shows the U.S. and most European countries are falling behind most other developed countries, in adopting robotics into their economies. The report, from the Information Technology and Innovation Foundation, or ITIF, shows countries in Asia are accelerating their adoption of robots when taking wage levels into account, with the U.S. ranked no. 16 in the world, and much of Europe lagging even further behind.

The ITIF report highlights the key role played by robotics in boosting workforce productivity, which the group says is needed to sustainably raise living standards. The report cites data from the Conference Board showing a decline in annual labor productivity growth worldwide from 2.6 percent in the years 1999 to 2006, to barely 2 percent from 2012 to 2014. Since 2007, productivity growth in the U.S., Europe, and Japan rose at only about half the rate of 2000 to 2006.

Robots, says ITIF, plays a key role in improving labor productivity. The report notes data from Centre for Economics and Business Research showing investments in robotics added 10 percent to per capita growth in gross domestic product in OECD countries from 1993 to 2016. While most initial robotics investments are in manufacturing, many difficult but routine jobs in agriculture, construction, distribution, and service industries could also be aided by robotics. Among service job candidates cited by the report are robots to help care for elderly people.

ITIF’s report first measures robotic adoption  with data from 27 countries compiled by International Federation of Robotics. Those data calculate the number of robots installed in a country per 10,000 manufacturing workers, and show the global number rising from 66 in 2015 to 85 in 2017, a 29 percent increase. When looking at this rate for each of 27 developed and developing countries, the results show Korea and Singapore leading with 710 and 658 robots respectively per 10,000 workers, followed by Germany and Japan with 322 and 308. The U.S. ranks seventh with 200 robots.

Robotics adoption chart

(Information Technology and Innovation Foundation)

However, as the report points out, a business’s decision to invest in robots could depend largely on its wage and salary expenses, which would skew the results in favor of countries with higher wages and salaries. To account for payroll differences, ITIF adjusted the robotics adoption data first by controlling for compensation rates, with data from International Labor Organization and the Conference Board. The report also computed the payback for installing robotics, using a formula provided by RobotWorx, an industrial robotic systems developer.

Finally, ITIF calculated an “expected” number of new robotics installations in a country based on the global average of 85 in 2017, and compared the actual compensation- and payback-adjusted robotics installations to the so-called expected number, to calculate a robotic adoption rate as a share of the expected number.

The results show Asian countries — Korea, Singapore, Thailand, China, and Taiwan — with the leading robotics adoption rates in the world, all with more than double their expected share of compensation- and payback-adjusted rates. In a second-tier group are the European countries of Slovenia and Czech Republic, joined by Japan and Mexico, all with adoption rates exceeding their expected levels.

Robotics adoption chart

(Information Technology and Innovation Foundation)

Countries with the lowest robotic adoption do not form a clear geographic pattern, with Australia, Brazil, Switzerland, and Russia each showing an adjusted adoption rates of 80 to 88 percent below their expected levels. The U.S. ranks 16th overall with an adjusted adoption rate of 49 percent below expected levels.

Robert Atkinson, founder and president of ITIF, and the report’s author, notes in foundation statement that fear of job losses often inhibit policy-makers from encouraging robotic adoption. “Robots are key to boosting productivity and improving living standards,” says Atkinson, “but there is a dangerous misperception that they will lead to mass unemployment. Policy-makers shouldn’t let fear of job losses discourage robot adoption. The evidence is clear: using robots makes economies more competitive, which helps them grow and create jobs.”

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