Robots Help Return the Age of Productivity

Glob­al pro­duc­tiv­i­ty has not had much of any growth nor any hints at a recov­ery since the millennium…until now. In a paper by John Fer­nald called ​“Pro­duc­tiv­i­ty and Poten­tial Out­put before, dur­ing, and after the Great Reces­sion,” it says that between 1995 and 2005 pro­duc­tiv­i­ty aver­aged around 2.9 per­cent. After that, pro­duc­tiv­i­ty start­ed it’s slow demise, ​“aver­age labor pro­duc­tiv­i­ty growth in mature economies slowed to 0.6 per­cent in 2014 from 0.8 per­cent in 2013.” This report­ed 0.2 per­cent decrease in labor pro­duc­tiv­i­ty growth in just one year made Fer­nald fear­ful of glob­al stagnation.

While this may not seem like a lot, Tyler Cowen’s recent For­eign Affairs piece, ​“Is Inno­va­tion Over?” reports that it is. ​“In the medi­um to long term, even small changes in growth rates have sig­nif­i­cant con­se­quences for liv­ing stan­dards. An econ­o­my that grows at one per­cent dou­bles its aver­age income approx­i­mate­ly every 70 years, where­as an econ­o­my that grows at three per­cent dou­bles its aver­age income about every 23 years — which, over time, makes a big dif­fer­ence in people’s lives.”

For­tu­nate­ly, pro­duc­tiv­i­ty is on the up and up again, which makes Cowen’s log­ic a ben­e­fi­cial real­i­ty. ARK Invest reports that because of ​“incre­men­tal pro­duc­tiv­i­ty from automa­tion, real GDP per U.S. work­er will more than dou­ble from $113,000 this past year [2015] to $236,000, com­pound­ing at an annu­al­ized growth rate of 3.4 per­cent through 2035, and at an accel­er­at­ed rate of almost 5 per­cent from 2025 to 2035. In the absence of automa­tion, pro­duc­tiv­i­ty would increase at rough­ly half that rate, or 1.8 per­cent, and real GDP per work­er would reach only $167,000.” In the­o­ry, the U.S. would return to the days where each gen­er­a­tion pro­vides a bet­ter life to the next.

Although robots have been fix­tures in fac­to­ries and ware­hous­es for decades, indus­tri­al automa­tion, with the influx of the col­lab­o­ra­tive-robot rev­o­lu­tion is now in a trans­for­ma­tion phase of ​“robot-dri­ven automa­tion.” Some are deem­ing this the age of ​“new” pro­duc­tiv­i­ty. This ​“new pro­duc­tiv­i­ty” is help­ing indus­tri­al robots move into a world on track to trans­form com­pa­nies around the globe by open­ing up new oppor­tu­ni­ties for eco­nom­ic growth and com­pet­i­tive­ness by inter­sect­ing peo­ple, data, and [intel­li­gent] machines. Some may even call robots the next Gen­er­al-Pur­pose Tech­nol­o­gy (GPT) that can affect an entire econ­o­my and dras­ti­cal­ly alter soci­eties in a pos­i­tive way, such as was seen with the steam engine, com­put­er, and internet. 

Indus­tri­al automa­tion appears to be con­stant­ly expand­ing and evolv­ing into a greater union with infor­ma­tion tech­nol­o­gy that will soon allow robot-dri­ven automa­tion to rein in man­u­fac­tur­ing and logis­tics. All of this data indi­cates that the return of pro­duc­tiv­i­ty is head­strong, not a brief blip, and being enabled by per­haps one of the things that was first feared so much, robot-dri­ven automation.

if you are inter­est­ed in keep­ing up with the pro­duc­tiv­i­ty trend, increas­ing your ROI, and mov­ing towards automa­tion, con­tact Robots​.com, a cer­ti­fied inte­gra­tor for Fanuc, Motoman, KUKA, Uni­ver­sal Robots, and ABB, at 877−762−6881.