In defence of robots

A study by the Aarhus University School of Business and Social Sciences has shown that, rather than causing humans to lose their jobs, robots can lead to more employment and an upsurge in productivity, reports Tim Banjeree Dhoul

Robot-adopting companies among 5,500 manufacturing firms in Spain were found to increase their overall output by 20-25%, reduce the labour cost share by 5-7% and experience net job creation at a rate of 10% on average over four years. These were the findings of a paper penned by Koch, together with fellow researchers at Aarhus BSS and Europa-Universität Flensburg.  

The myth of robots stealing our jobs is false, according to Michael Koch, an associate professor from the Department of Economics and Business Economics at Aarhus BSS.  

They researchers believe that it is their unique dataset that offers new insights. “It gave us the opportunity to do something entirely new within research into the effect of automation: to investigate the microeconomic impact of robots all the way down to the level of individual firms, as opposed to the majority of existing research, which has been preoccupied with the overall macroeconomic effect”, Koch explained.  

The data in question stems from annual surveys covering the years 1990 to 2016, which allowed researchers to track the adoption of robots in individual firms against other measurements, such as productivity, costs and job numbers. 

Across the whole time period, firms adopting robots in their manufacturing processes increased the number of jobs by 50% on average. There was an average decrease of 20% in job numbers among firms who did not adopt robots at any point during the same period of 26 years.  

“We had expected the adoption of robots to cause employment to decrease, just like many other macro-level studies have shown”, said Koch. The study, published in The Economic Journal, has picked up a Royal Economic Society award for best paper.

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