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27 Jun, 2019 19:31

Robotics ‘disruption’ will harm poorest economies & lower-skilled workers – report

Robotics ‘disruption’ will harm poorest economies & lower-skilled workers – report

A recently released research report shows that economic disruption caused by technological advances in the robotics industry will have a disproportionate impact on poorer countries and poor regions within countries.

‘How robots change the world’, produced by Oxford Economics, examines the impact that the breathtaking growth in sophistication in robotic technology will have on economies across the globe.

Though there is undoubtedly huge potential for innovation and savings for businesses, there is also considerable cause for concern as well. In particular, the report raises the issue of job losses caused by robots taking on job tasks currently or previously performed by people. It notes that in many places “the impact will aggravate social and economic stresses from unemployment and income inequality.”

Robotics ‘disruption’ will harm poorest economies & lower-skilled workers – report

The report’s authors developed a ‘Robot Vulnerability Index’ to chart which areas would be most affected by changes.

“In many cases, our Index highlights that the most vulnerable regions are somewhat removed from the wealthier districts of their home countries—such as Cumbria in the UK, Franche-Comté in France, and the high desert of Eastern Oregon in the US,” the report states.

Robotics ‘disruption’ will harm poorest economies & lower-skilled workers – report

These areas will be particularly hard hit because of a historic reliance on manufacturing in their local economies. Areas that depend more on service sector and “information economy” jobs, on the other hand, will be less affected. In particular major cities such as London and the areas that surround them will see the least disruption from increases in robot technology. Using econometric modelling, the report predicts that each newly installed robot would displace an average of 2.2 workers in lower-income areas compared to an average of just 1.3 workers in higher-income areas.


Furthermore, the trend could exacerbate global inequality. “Our research shows that the negative effects of robotization are disproportionately felt in the lower-income regions of the globe’s major economies—on average, a new robot displaces nearly twice as many jobs in lower-income regions compared with higher-income regions of the same country,” the report notes.

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The authors add that this could have significant social and political implications, especially given that “increasing political polarisation is already a worrying trend.”

The news is not all bad, however. The report also discusses the idea of a “robotics dividend.” This includes increased real incomes, more affordable manufactured goods, and greater tax revenues. “This will be particularly important to the lower-income regions we have identified as being most vulnerable to the robot revolution,” the report states.

It also found that earlier adoption of robotics would positively impact both short- and medium-term growth. Investing in robotic technology by 30 percent above current 2030 projections could lead to an over 5 percent boost in global GDP, the report claims, which translates to an extra $4.9 trillion per year added to the global economy.

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