How America Could Miss Out On the Next Industrial Revolution

One thesis, expressed below, is that Asia and, to a lesser extent, Europe, will dominate the next technological era of manufacturing because they are not as concerned about the possible human cost of robotization. 

But another theory may be that America's slower start and greater focus on getting this right, could cause it to win that contest in the long run. JL

Nick Statt reports in The Verge:

Because Asia and Europe have become the largest producers of cars, electronics, furniture (etc), those regions have invested the most and have the most valuable insight as to how to automate. America has outsourced its manufacturing and lacks investment in industrial robotics, (so) may miss out on the next radical shift in how goods are produced. Because the the robots that make robots could play a key role in determining how automation expands.

Robots are inevitably going to automate millions of jobs in the US and around the world, but there’s an even more complex scenario on the horizon, said roboticist Matt Rendall. In a talk Tuesday at SXSW, Rendall painted a picture of the future of robotic job displacement that focused less on automation and more on the realistic ways in which the robotics industry will reshape global manufacturing.

The takeaway was that America, which has outsourced much of its manufacturing and lacks serious investment in industrial robotics, may miss out on the world’s next radical shift in how goods are produced. That’s because the robot makers — as in, the robots that make the robots — could play a key role in determining how automation expands across the globe.

Robots that make other robots are the future

As the CEO of manufacturing robotics company Otto Motors (not to be confused with the self-driving trucking company Uber owns), Rendall focuses on building fleets of warehouse bots that could eventually replace the many fulfillment workers who are hired by companies like Amazon. His talk, titled “Robots vs Jobs: Technological Displacement is Here,” gave a brief history of automation, charting how the tractor and the assembly line and other technologies throughout history have displaced human labor.

But then he turned to the uncertain future. Automation optimists and pessimists have begun arguing over how the world will change, and whether a mix of artificial intelligence and industrial robotics might accelerate automation in an unprecedented fashion. “The robots are coming,” Rendall said. “After the Great Recession, there was a fundamental change in people’s interest in automation. People started feeling the pain of high-cost labor and there’s an appetite for automation that we haven’t seen before.”

The Knightscope K5 is designed to automate mall and parking security and is already being used in malls and garages in the San Francisco Bay Area.

Photo: Knightscope

While Rendall described himself as one of the optimists, who believes automation will, in the long-term, improve society and help humans live better lives, he said there are changes afoot in the global manufacturing scene that could leave American industries in the dust. “China is tracking to be the No. 1 user in robots used in industrial manufacturing,” he said, adding that the country is driving “an overwhelming amount” of growth.

The difference, he added, is how China is responding to automation, which is by embracing it instead of shying away from it, as the US appears to be approaching the issue. This is in stark contrast to industrial advances of the previous century, like Ford’s assembly line, that arrived first in American industries and transformed the country’s economy into one of the most robost on the planet.

China is driving a boom in industrial robotics

As it stands today, the top robotics makers are overwhelmingly located in Japan, with other big names in Germany and Switzerland. China employs the highest number of these manufacturing robots of any country by a wide margin, but that number is still dwarfed by the number of human workers in the country. South Korea, however, has the most robots per capita, meaning it may soon become a more productive, efficient, and cost-effective place to manufacture goods than Chinese factories.

Rendall says it is quite likely that China, as well as Korea, will begin ramping up robotics investments in their own respective industries to offset rising labor costs and to stay competitive. That could result in a big boom in homegrown robotics companies in China and Korea, as well a vast increase in the number of industrial robots in traditional manufacturing roles. Already, companies like Foxconn, one the largest manufacturers of consumer electronics, have laid out detailed plans to automate hundreds of thousands of factory jobs in China. More telling: Foxconn is determined to do so mainly with its own growing fleet of “Foxbot” robots that it produces itself.

Because Asia and Europe have become the largest producers of cars, electronics, furniture, and other products, the companies in those regions have invested the most resources and have the most valuable insight as to how to automate their manufacturing processes. So it’s Fanuc from Japan, Kuka from Germany, and ABB from Switzerland — not Google or Facebook or Microsoft — that are in the best position to become global powerhouses as automation picks up.

Asia and Europe are leading the charge on automation

Fanuc is Japanese robotics company that specializes industrial manufacturing, like the CR-4iA robitic arm used for gearbox and motor assembly.

Photo: Fanuc

So where does that leave the US, which has a president that wants to bring jobs back and manufacture goods in America, but lacks the robotics and automation resources of other countries? We won’t know the answer for quite a few years, but the US is increasingly in a precarious position, Rendall said. It does not have a leading robotics company in the global market, and the public is deeply unsettled by automation as a concept, he says.

Those fears are very real. According to researchers Carl Benedikt Frey and Michael Osborne, who penned an influential 2013 paper titled "The Future of Employment,” nearly half of all jobs could be automated over the next 30 to 40 years. This isn’t just about the diminishing of personal livelihood — automation at this scale could have profound effects on how people spend every minute of every day, self-identify in society, and ultimately stay alive in the absence of government benefits like universal health care or a universal basic income, the report concludes.

Those are important concerns, and they’re also the issues Rendall didn’t spend too much time diving into. But he was nonetheless confident that America’s only path forward is to embrace the inevitability of automation, and to try and make it a positive development both for US industries and its citizens.

It’s unclear if the Trump administration will take the necessary measures to make it easier for American industries to invest in automation, especially when it involves buying products from foreign countries in what is an increasingly nationalistic environment. The silver lining: perhaps Trump’s America-first language will result in more serious domestic investment in the industries typically dominated by Asian corporations. But Rendall’s portrait of the future seems to suggest that it may be too late, and that Asia and Europe are far better poised to take advantage of what is effectively the next industrial revolution.

Nearly half of all jobs may be automated in the next 30 or 40 years

Sure, Silicon Valley companies are at the forefront of AI, and it’s likely that early automation comes from a mix of simple touchscreen products (a McDonald’s kiosk) to more powerful AI-driven software (a sophisticated customer service agent). That could mean American companies have a hand in — and reap the benefits of — this type of automation in the short-term. Rendall makes the point, however, that advances in AI will only yield greater advances in robotics, resulting in machines that perform an increasingly diverse set of tasks once reserved exclusively for humans. That includes search and rescue, face-to-face customer service, and even mall security, all potentially performed by robots produced in China using industrial robots made in Japan.

Rendall sees this as a chance for America to realign its investments and priorities. “We have the opportunity to do something meaningful about reshoring manufacturing,” he said. “The jobs that come back to the US are really only going to work if there’s automation involved. But when the jobs come back, and there’s robots building the products we consume, will it be an American robot building the product?” If today’s manufacturing landscape is not drastically upended, the answer to that question is a resounding no.