The use of robots in their production line has been proving to be remarkably profitable for many businesses. One of the reasons for this is because it immediately decreases one of their largest regular pay-outs, labor costs. This means that factories, and other businesses with many employees, have increased their use of automation by adding robots to their labor force. The machines have also proven to be significantly more efficient than human labor. Instrumental in this change are many Chinese companies, which are responsible for a large part of the world’s production. As a result, they have been investing significantly in finding mechanical forces that will decrease the cost of labor, as well as continue to boost productivity levels.
Shentong Express, a large-scale shipping company, has cut its labor costs in half by making sorting robots a permanent part of its labor force. The robots are made by Hikvision, and are responsible for sorting parcels as they transition through the system. Each machine can sort at least 200,000 parcels per day and, since they are self-charging, can work around the clock. This has also facilitated an improvement in the company’s efficiency by 30%, as well as increasing the accuracy of sorting. Even though the robots are currently only a part of the work force in two of the company’s Hangzhou branches, there are plans to expand their use to all their largest branches.
In 2016, the output using industrial robots increased by over 30%, fuelling the shift from human work forces to automated ones. Another Chinese company, Changying Precision Technology, which manufactures mobile phones, automated 90% of their work force. This meant that 650 human workers were replaced with 60 robots, across 10 production lines. The company’s productivity has subsequently increased by 250%, and defective products decreased by 80%. These results have caused China to develop a long-term plan which involves using robots as a significant part of their labor force, increasing their number to 100,000 by 2020.
Even though large-scale businesses embrace these changes, many individuals are worried about the considerable number of people that will lose their jobs due to increased levels of automation and technological advancements. It is estimated that within the next 20 years, 137 million workers in five Southeast Asian countries will be replaced with robots or other automated systems.
There are other changes that automation will bring to business worldwide. Many companies in first world countries have previously outsourced their production, to others that are less developed with low cost labor forces. Automation means that production can be transferred to the home country, since labor costs would now be at a minimum. This would have detrimental effect on the economy of many third world countries.
Internationally, the use of automated services must be embraced, without taking things to the extreme. Viable solutions will also need to be found to control the expected rise in the unemployment rate. One suggestion is to have a universal basic income, which would expand economies and limit unemployment.