Industrial Robots and the Metamorphosis of Work Irmgard Nübler International Labour Organisation Prepared for the International Symposium and Presentation of the Special Report Robot-Lution 23 August 2017, Buenos Aires

My presentation Automation, robots and the future of jobs – a dynamic process of creative destruction Windows of opportunity for middle income countries – productive transformation The future of work with robots is non-deterministic, it needs to be shaped – choices and strategies

I. Automation, robots and the future of jobs Robots are diffusing into production processes in developed and developing countries and replacing jobs New robots can perform wider range of manual and cognitive, routine and non-routine tasks Robots are largely in industry, but increasingly in services Increasing demand for robots as they become smaller, mobile and cheaper Integrated into network of robots (industry 4.0) performing tasks in management, coordination, logistics

Robot Density across Countries in 2008 and 2014, High Density Countries (>0.5 in 2014) Source: International Federation of Robots, 2016

Robot Density across Countries in 2008 and 2014, Low Density Countries (<0.5 in 2014) Source: International Federation of Robots, 2016

Robots destroy jobs in the short term: Process innovation Robots are on the rise and they will destroy jobs because robots are developed with the intention to replace workers in the production process. Robots perform jobs that are dirty, heavy and hazardous at a higher quality, precision, efficiency and speed at lower costs and higher productivity In the short term, the installation of robots in existing industries will therefore always destroy jobs.

What about job creation? Product innovation & productive transformation In the long term, robots will generate new production and job opportunities Market adjustment – rising productivity, income, demand for existing domestic products New capital goods industries – tech-industry, robots, software Reduced working time, higher income and rise of leisure industry, travel, sports, and games Rising demand for R&D Changing consumer behaviour, customisation, craft and artisan

Change in robot density and decline in manufacturing employment, 2008-2014 Source: Trends in Econometric Model Database, ILO November 2016; IFR 2016

The challenge for middle income countries is to II. Windows of opportunities for middle income countries to catch up and create jobs The challenge for middle income countries is to Diversify production structure Increase sophistication and complexity of products for productivity and learning Enter industries with high demand elasticities for domestic and foreign demand

Comparing Latin America and Asia The narrative: 1990- 2014 Asian countries: entered emerging GVCs with manufacturing intermediates (diversification) increased economic complexity accumulated capabilities to innovate Diversified into two robot-intensive industries and learned to compete – transport and electronic South American countries: supplied largely natural resources to GVCs decreased economic complexity and de-industrialised. Limited opportunities to develop capabilities to innovate and catch up in manufacturing Developed only one robot-intensive industry- transport

Change in economic complexity in Latin American and Asian countries, 1998-2008. Source: The Economic Observatory (2017), MIT Harvard University

Distribution of robot stocks across the robot-intensive industries in South America and South East Asia, 2008-2015 (percentage) Source: International Federation of Robotics, 2016

Change in manufacturing employment as a share of total employment, 2000-2015 Latin America (14.7 to 11.7) Asia (13.4 to 13.3) Source: Trends Econometric Model database, ILO November 2016

III. The future of work needs to be shaped Technological change is not falling from heaven but is the result of deliberate research. Responds to economic, social and political demand. Not deterministic. The dynamics of innovation and employment is a non-linear process of creative destruction. Transition into new industries and products (the job-creating phase) needs to be shaped by new societal and political choices. Societies need to learn to exploit new opportunities.

III. The future of work needs to be shaped (Continued) In developed and developing countries governments and societies need to develop strategies of how to translate the new wave of robotisation into a future of work we want. Creating a new societal consensus on the way forward and the new capabilities for job-creating productive transformation are central in this strategy.

Thank you Irmgard Nübler Research Department International Labour Organisation Geneva Email: nubler@ilo.org Skype: Irmgard.nubler Twitter: IrmgardNubler