The growth of robots in the workplace and the regulatory dilemma

by Shomik Panda on 24 Jun 2014

What was once considered a far-off fantasy is now fast becoming reality.  Robots will soon become an integral part of our working lives, and not just in traditional automotive sectors. Inevitably this will have far-reaching consequences for consumers, corporations and governments. This article looks at what is driving the commercialisation of robots, and how governments and corporates are responding.

Recent growth in robot production is both demand and supply led

Robots are increasingly giving corporations an opportunity to make efficiency improvements. They are stronger and more precise than humans. They are also undoubtedly more productive at some manual tasks than their human counterparts. They can work round the clock and without interruption. Moreover, they are more able to tackle laborious tasks and will not lose enthusiasm, in spite of repetition. By allowing robots to focus on these repetitive tasks, human workers can focus on “higher value” roles.

Technological advance over the last fifty years also means that industrial robots are now much cheaper, precise and flexible than previously. They are much easier to use. No longer does a robot operator require technical programming skills as they may have done previously, meaning that companies can use robots without having to find and pay for specially trained staff.

What’s more, robots are cheap. The FT reports that the current hourly cost of a sample industrial robot is currently $4.32 per hour based on an eight-hour work day and working 260 days per year over three years. This is a significant saving over the cost of human labour, particularly in the developed Western world, where the average hourly cost for a factory worker can be closer to $25 per hour. Lower costs and improved ease of use mean that SMEs can now even start thinking of using robots in their supply chains and many US and European manufacturers are using robots to “reshore” manufacturing that was previously outsourced to low-cost developing nations.

A key shift in the new generation of robots is that they no longer need to be separated from workers for safety reasons. Instead they can play a collaborative role with humans. Robot companies are now launching these “collaborative” robots, or “co-bots”. Sales of co-bots are still are still in their infancy, but are expected to grow fast. The ability of these robots to operate outside of “safety cages,” and to work alongside humans, means that robots are now moving beyond manufacturing sector jobs and into service sector jobs such as healthcare, logistics and agriculture, for instance. These ‘service sector’ robots are expected to be the growth driver for robotics in the future.

With many countries confronted with an ageing population that will soon have to be sustained by a shrinking labour force, governments and corporations are increasingly looking to robots to provide key services that are currently solely provided by humans. Policymakers see opportunities in health and nursing care, and companies are developing robots to step in where humans may become scarce.

Governments and corporations are racing to establish their robotics credentials

Between them, Japan, South Korea, the US and Germany represent half of global sales. Last year, China bought the largest number of industrial robots in the world, overtaking Japan, according to the International Federation of Robotics. China is the fastest-growing robot market and, in a few years’ time, is expected to be significantly larger than its biggest challengers. Japan still has the highest number of industrial robots in operation and also still dominates robot manufacturing. However, robot density in each of the key markets above remains exceptionally low and there remains a huge potential to grow in each of these markets.

Companies are also investing huge sums into research and development. Google snapped up a number of robotics companies last year, including Deepmind, the UK artificial intelligence company. However it still has a way to travel before being able to challenge the bigger market incumbents in Japan and Europe that have for decades led the industry. Silicon Valley is now, however, starting to invest heavily in robot companies and some European companies are worried about losing top talent to the US. Similarly, Japan is beginning to lose out because it has favoured closed, proprietary platforms, which keep out third parties who may have new innovative ideas.

Will robots take our jobs?

Just as policymakers foresee the benefits, they also worry about jobs (and votes). Neelie Kroes, vice-president of the European Commission, has urged the robotics industry to ‘clear up the uncertainty and mistrust’ around robots and to reassure the public that increased automation won’t lead to large job losses.

On this subject opinion is divided. Some believe that a broad range of jobs that were never previously able to be automated will be lost forever. Engineering trade unions, for instance, are determined that people remain the dominant form of factory employee and, if jobs are to be lost in the future, that corporations have proper plans to re-train employees and for the ‘higher value’ jobs that are said to emerge.

Others, in particular the robotics industry, believe that robots preserve jobs by improving productivity, and allowing companies to grow. Corporate growth will then lead to new jobs for humans and robots alike, meaning that the employment will grow rather than fall.

How should robots be regulated and what are governments doing?

Policymakers face the challenge of protecting end-users and also promoting an important innovation. There are also a number of ethical and legal challenges that emerge when intelligent machines and humans come together in the same environment. How should we regulate the responsibilities of the robots and also the responsibilities of those who design, manufacture, and use them?

A number of potential issues come to mind: Will some types of robot research and technology be forbidden? Who should be liable when a robot makes an error? What personal privacy issues may stem from the use of domestic care robots? How can insurance companies work out the risks posed by robots without existing regulatory or legal frameworks? Legislators and policy makers are only now just starting to look into these issues.

In Europe, RoboLaw is a $1.9 million European Commission-funded project designed to prepare the way for the creation of legal and ethical guidelines. The project is due to report a comprehensive set of recommendations in a few months’ time, which will form a blueprint for government regulation.  In the future robots will have the capability to improve our health care, social welfare and standard of living.  It is important that governments now frame a set of rules within which the robotics industry can thrive, while ensuring that humans are adequately protected.


(Photo, Marc Seil CC BY)

Topics: UK business, Economic policy, Big Tech, Shomik Panda

Shomik Panda

Written by Shomik Panda

Shomik is an experienced adviser on EU and UK digital issues and the founder of Inline Policy.

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