Economic Affairs

Fear all working robots, not just big bionic arms

Workers in some industries risk being replaced by robots in future

Japanese SoftBank group chairman Masayoshi Son says automatons may outnumber humans in 30 years. It sounds far-fetched.

But robots are 80 per cent cheaper now than in 1990, and getting lighter and safer for people to use. That makes them a big risk to many of the world's six billion future workers.

As Mr Son told reporters in New Delhi on June 22, a few days after his companies began selling what they claim to be the world's first personal robot that reads emotions: "In 30 years, the number of robots would be more than the number of humans."

A February study by economists Georg Graetz of Uppsala University and Guy Michaels of the London School of Economics (LSE), using data from the International Federation of Robotics, has shown that robots of the same quality have become almost 80 per cent cheaper between 1990 and 2005. In the 17 countries they studied, increasing use of robots raised annual growth of labour productivity by 0.36 percentage point, a figure which is "fairly comparable to the estimated total contribution of steam technology to British annual labour productivity growth of around 0.35 percentage point, which was, however, sustained over a period that was about four times longer, from 1850-1910", the researchers noted.

Almost half of all US jobs may be at risk from computerisation and automation, according to a September 2013 analysis of 702 occupations by University of Oxford researchers Carl Frey and Michael Osborne.

Massachusetts Institute of Technology economist David Autor argued in a paper last August that "challenges to substituting machines for workers in tasks requiring adaptability, common sense, and creativity remain immense".

At first glance, the prediction that robots will outnumber people seems far-fetched: Fewer than two million industrial robots exist currently. But if the SoftBank founder's forecast were to even partially come true, the consequences could be frightening for the world's workers.

To see why, start with the non-threatening, stay-home bots, which would provide services like vacuum-cleaning that people usually do not pay others for.

The International Federation of Robotics expects 24 million of these to be sold between 2014 and 2017. Add to that figure the 7.5 million robotic devices people are expected to buy over the same period for leisure and entertainment.

Then assume that demand for these electronic companions doubles in every subsequent four-year period - that is just one-fourth the rate at which the global smartphone market is currently growing. Even accounting for rapid obsolescence, there may be four billion of such family services robots by 2045.

These friendly droids will not compete with workers. Designing, programming, manufacturing and selling them will create new, high-paying jobs.

But what about the bionic arm in industrial use? In the 17 advanced economies in the LSE study, there were 1.5 robots for every one million hours of human work in 2007, up from 0.6 in 1993.

While their overall effect has been to boost productivity and wages, the researchers say there is some evidence that they have "reduced the hours of both low-skilled and middle-skilled workers". That does not sound like cause for alarm just yet.

If jobs like cab-driving, bricklaying and frontline sales cease to be paid occupations, already-high global wage inequality could worsen. Sailors who lost out to newbie steam-engine operators in the 19th century had other occupations to turn to. But robotics could cause most low-skill work to disappear.

However, robot "density" in the workplace could rise rapidly as the technology, which has already witnessed a staggering 80 per cent price drop between 1990 and 2005, gets cheaper still. That will spread the use of artificial intelligence to slow-to-adopt, labour-intensive industries like construction. Australian start-up Fastbrick Robotics claims its Hadrian robot can lay 1,000 bricks an hour, a third faster than the speediest human bricklayer.

The other boost to robots could come from miniaturisation: The terrifyingly fast giant automatons of assembly lines are now giving way to smaller, gentler androids, which can work in proximity to people without endangering their safety.

They are also a lot less expensive. Three years ago, Boston-based Rethink Robotics introduced "Baxter" at US$22,000 (about S$30,000), targeting small and mid-sized business users. By comparison, robotic arms, ubiquitous on factory floors, cost between US$50,000 and US$80,000, according to systems integrator RobotWorx.

Prices might crash further when 3D-printed robots take off - Indiana University researchers recently printed a controller for just US$85.

The technology is advancing just as workers in most advanced countries struggle with a three-decade-long slump in wage shares. According to economist Autor's research, the proportion of US workers employed in easily automated "routine" operations like assembly-line production and bookkeeping shrunk between 1999 and 2012. But this is just the beginning: A 2013 University of Oxford study says that about half of all existing US jobs are at risk from automation.

SoftBank recently started selling "Pepper", a humanoid capable of reading emotion. Pepper already sells Nespresso coffee machines in Japan; more commercial applications are on their way.

Then there are robotic cars.

Even as Google takes its self-driving cars out for test drives in California, Singapore may start a "robot taxi" trial in the next six months, according to an article last week in The Atlantic. If jobs like cab-driving, bricklaying and frontline sales cease to be paid occupations, already-high global wage inequality could worsen. Sailors who lost out to newbie steam-engine operators in the 19th century had other occupations to turn to. But robotics could cause most low-skill work to disappear.

By 2045, roughly six billion people globally will be in the age group of 15 to 64 years, according to the United Nations. They will want jobs. But it is possible that all of mankind's wants could be satisfied by, say, the efforts of three billion people working leisurely six-hour days with a hundred million highly productive robots supplementing their labour.

In one sense, this is the utopia economist John Maynard Keynes foresaw in his 1930 essay, Economic Possibilities For Our Grandchildren.

More free time might mean more fulfilling lives for more people than ever before. At the same time, though, there is a distinct possibility that the lopsided income distribution of the last 30 years, itself driven partly by globalisation and technology, could worsen. Governments may have to ensure a minimum income for a large underclass. But finding the money will not be easy - bots will neither pay income taxes nor contribute to provident funds.

Ageing societies need to tread with extra caution: The 100 million industrial robots of 2045 may not cost much more than today's two million.

In other words, artificial intelligence may not boost sagging corporate investment. In the absence of fresh borrowing, today's low interest rates could become permanent, upsetting retirees.

The scary bionic arm has hurt workers very little; the rise of the cheaper, gentler droid could be far more dangerous.

•The writer, a former Straits Times journalist, is a columnist with Reuters Breakingviews.

A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Fear all working robots, not just big bionic arms'. Print Edition | Subscribe