Rise of the Robots: Good or Bad News for Business and Society?
In 2005 there were less than one million industrial robots. Today there are 1.8 million and in three years’ time, this will soar to around 2.6 million. Technology already plays a major role in the manufacturing sector. But as robots become better and more sophisticated, PwC economists expect their impact to gradually permeate more industries, including the services sector, which accounts for most jobs in industrialised economies.
Business leaders are already taking note of these changes and are factoring it into their corporate strategy. Our 2016 global CEO survey shows that 77% of CEOs think that technological progress is the megatrend most likely to transform how businesses interact with their stakeholders. Technology can lower costs and increase efficiency. For example, robotics can help businesses make better use of their existing capital stock and increase margins. This in turn could create further demand for traditional forms of investment, such as warehouses and machinery. The price of goods and services could also drop, or increase more slowly, if businesses pass on these productivity gains to consumers through lower prices, which they should do so long as markets are competitive.
But what impact could increased technological change have on jobs? Barret Kupelian, Senior Economist, PwC says: “Clearly, technology that complements labour is expected to have less adverse effects on jobs than technology that displaces labour. In many consumer services sectors, for example, where human contact and care is of central importance, there is less scope for robots to replace humans – at least for the time being.” In other areas, however, automation may represent more of a threat to jobs, though the scale of this threat varies from a Frey and Osborne 2013 estimate that around 47% of current jobs are at risk in the US over the next two decades, to an OECD study that places the figure at only 9%.
Digital technologies also create new jobs, so the effect is by no means all negative. “Technological breakthroughs are a disrupting force for businesses and workers. But for those businesses that can adapt fastest to new technologies, and for workers with characteristics that machines don’t currently have, such as creativity and empathy, improvements in technology could deliver substantial gains,” adds Barret Kupelian.