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Businesses put robots to work when human workers are hard to find, argue econo-boffins

Researchers have found that business adoption of robots and other forms of automation is largely driven by labor shortages.

A study, authored by boffins from MIT and Boston University, will be published in a forthcoming print edition of The Review of Economic Studies. The authors, Daron Acemoglu and Pascual Restrepo, have both studied automation, robots and the workforce in depth, publishing numerous papers together and separately.

“Our findings suggest that quite a bit of investment in robotics is not driven by the fact that this is the next ‘amazing frontier,’ but because some countries have shortages of labor, especially middle-aged labor that would be necessary for blue-collar work,” said Acemoglu in a canned statement.

The study found that automation adoption rates differ depending on a nation’s ratio of workers over the age of 56 compared to those aged 21 to 55. Workforce age alone accounted for whether robots were used across 60 different countries 35 per cent of the time, and defined what sort of robot was used 20 per cent of the time.

Widening the outlook to 129 countries and beyond just robots, the boffins found similar results for automation technologies, like numerically controlled machinery or automated machine tools.

The study’s findings revealed interesting country-to-country variation on technology adoption. South Korea, with its rapidly ageing population, has widely adopted robotics. Germany has done so in response to work-force shortages. The United States, meanwhile, adopted robots in metro areas where the population is getting older at a faster rate, but mainly used automation as a cost-cutting measure thus displacing younger employees from the workforce.

“This is a potential explanation for why South Korea, Japan, and Germany — the leaders in robot investment and the most rapidly ageing countries in the world — have not seen labor market outcomes [as bad] as those in the US,” said Agemoglu.

As a bit of a side-quest, the pair got curious about patent data. Sure enough, they found a “strong association” between ageing workforce and automation patents. Which, as Agemoglu put it, “makes sense”.

The boffins aren’t done. They next plan to probe the effects of AI in the workforce and the relationship between automation and economic inequality. ®


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