RALEIGH, N.C.--(BUSINESS WIRE)--A new study from Redwood Software and the Centre for Economic and Business Research (CEBR) finds that the U.S. is the world leader in robotics automation investment, with an estimated robotics stock of $732 billion* – larger than the economy of Switzerland, which stood at $446 billion* in 2015.
U.S. investment in robotics was $86 billion in 2015, up from less than $40 billion in 2009, when investment hit a low following the financial crisis, and more than 15 times higher than the OECD average. Between 2011 and 2015, U.S. investments in robotics rose 30%.
“The U.S. is the world leader in robotics investment, and spending has recovered quickly since the financial crisis in 2009,” said David Whitaker, Managing Economist at CEBR. “The sheer size of the economy and its large base of production in the automotive and electronic sectors make it a natural candidate for increased automation.”
“The U.S. industrial sector is leading the world in its use of robotics right across its operations,” said Dennis Walsh, President, Americas and Asia-Pacific at Redwood Software, which sponsored the study. “We increasingly see corporations apply the value of robotics not only in their assembly line, but also in areas such as supply chain and finance departments.”
“Robotics and automation in manufacturing has been a contentious topic in the last 12 months – but the research shows that the sector is one of the best places to invest today, and the returns are likely to improve as time goes on,” Mr. Walsh added.
This study focuses on the impact of robotics automation on economic development across OECD countries, including the United Kingdom and the United States. It considers trends in robotics automation, using the latest date for 23 OECD countries over the period 1993 to 2015, before applying a growth accounting framework and econometric analysis to quantify the impact of robotics automation on two key macroeconomic indicators: GDP per capita and labor productivity.
The full study can be found online at www.cebr.com.
Worldwide, investment in robotics reached an 18-year peak in 2015, the study showed. While robotics remains a relatively small part of the U.S. and global economies, it has made a significant contribution to worldwide GDP growth over the last 22 years, with this contribution increasing to as much of 10% of total GDP growth in the last five years.
The study showed that investment in robotics has a greater positive impact on the economy than more established sectors such as information technology, construction and real estate – even though all these sectors benefit from economies of scale that robotics cannot match.
“There is no doubt about it – robotics is a significant contributor to economic growth today,” Mr. Whitaker noted. “Robotics’ cumulative impact on the overall economy has been much larger compared to the dollar value of robotics today. We expect to see progressively more robotic automation in the years to come, with commensurate benefits to overall economic growth.”
“The pace of robotic automation has accelerated in recent years, as technology grows ever more sophisticated,” said Neil Kinson, Chief of Staff at Redwood Software. “The new frontier for automation will be the automation of mundane back office tasks, and an approach that focuses on maximum efficiency for the task at hand, rather than simply swapping human effort for machine effort.”
Robots don’t want your job
A dominant theme in discussion around robotics has been the fear that increased robotic automation will lead to higher levels of unemployment. While the study did not directly address this issue, evidence points towards robotic automation being a positive for employment.
“There is clear evidence that points towards robotic automation in many cases being a complement for human labor, rather than a direct substitute. As more mundane tasks are automated, human effort becomes more valuable as it is focused on higher-level tasks, creativity, know-how and thinking,” Mr. Whitaker said.
“Robotic automation is increasing the total number of jobs available – but it is also changing them,” Mr Kinson said. “The increased level of automation investment highlights the need to rethink how we approach the skillsets needed in the workplace, and the importance of working with automation, and not against it.”
Key Findings of the study include:
- The United States has the world’s largest robotic stock by dollar value in PPP terms, worth $732 billion, up 50% from 2000.
- The value of robotics investment in the United States reached $86 billion in 2015. This figure is more than 15 times the OECD average, and more than twice the amount invested in 2009, when investment hit a low following the financial crisis.
- A review of recent related economic studies suggests that there is a positive relationship between robotics automation and economic development.
- The results from CEBR’s baseline econometric model suggest that a 1% increase robotics investment is robustly associated with a long-run increase in GDP per capita of 0.03.
- The study found a positive association between robotics density (the number of robot units per millions of hours worked) and labor productivity.
- Japan’s stock of robots led the world in 1993 in terms of numbers of units, but has plunged by more than 20% since then.
*Figures stated in 2010 Purchasing Power Parity (PPP) dollars
About Redwood Software:
Redwood Software was founded in 1993 with a single-minded mission – to help organizations achieve The Robotic Enterprise™ and deliver a 100% robotized back office, where all processes such as Record-to-Report, Order-to-Cash, Procure-to-Pay, Human Capital and the Supply Chain are run by robots and only include people where advanced judgment and analysis is required. As back office processes add no value to the business but are fundamental to the smooth running of operations, robotizing is the ipso facto way to improve process efficiencies and quality while freeing up budget and redirecting resources that can then be utilized where it delivers real impact to the business such as in customer care, marketing and product innovation.
Today more than 3,000 customers worldwide use Redwood’s solutions to automate their business processes. Visit www.redwood.com for more information.
CEBR is an independent economics and business research consultancy established in 1992. CEBR delivers economic analysis and forecasts to a wide array of retained private and public sector clients, and provides bespoke economic impact analysis of different policies and regulations at whole economy, sector and individual company levels.