Reference no: EM133519520

Case Study: The use of industrial robots is rising, and the introduction of new AI capabilities for some robotspromises to expand usage further. Robots provide several advantages: They do not make salarydemands, they do not take vacations, and they work long hours without complaining or gettingtired. They also increase efficiency levels by monitoring worker output, analyzing huge amountsof production data, and improving warehousing and logistics tasks. For example, General Motorshas just one-third the number of workers it had in the 1970s, but it now produces more cars thanit did then.

During the past decade, thousands of industrial robots were purchased by manufacturers invarious countries. Korea now has 531 robots per 10,000 workers; Germany, 301; the UnitedStates, 176; and China, 49. The cost of industrial robots has been steadily declining; an industrialrobot used to cost about $100,000, but the price has come down to about $25,000. Even smalland medium-sized companies can now afford to buy robots, and this will likely mean eve morewidespread use. The robotics industry was worth US $34 billion in 2019 and is expected to growby double digits annually from 2020 to 2025.Robots have had a significant positive effect in production management. Here are someexamples:

• Avidbots Corporation, based in Kitchener, Ontario, has a solution for the times. Itsautonomous floor scrubbing robots called Neo have become very popular with the challengesof the CoVid-19 pandemic. With companies searching for safe ways to clean and disinfecttheir premises, many came calling. For example, Avidbots earned a major contract in 2020from DHL International, which bought hundreds of units for their facilities worldwide.

• Etalex, a Montreal-based maker of metal shelving, has more than 20 robots in its factory. Therobots weld parts, operate punch presses, and stack shelves. They work up to 19 hours eachday. By using robots, Etalex has cut its labour costs by about 75%. But robots have notreduced the number of employees, because the robots have helped the company remaincompetitive.

• Another, Kitchener, Ontario-based company, Clearpath Robotics, makes unmannedKingfisher vehicles that measure tailings in potash mines so that humans are not exposed toharsh chemicals.

• At General Eletric's Bromont, Quebec, plant, 180 robots now do the work that humans usedto do. But the employment has increased from 600 to 900 people cause the plant has morebusiness now that it used to have because it is more productive.

These examples sound quite positive, but some experts think that robots are going to reduceemployment opportunities for humans. In fact, a PwC study found that 58% of CEOs planned toreduce their employee head count as a result of planned robotic adoptions. McKinsey &Company, a consulting firm, estimates that half of all jobs could eventually be performed byrobots. History supports this fear. Thousands of jobs in textile and furniture manufacturing werelost during the past 40 years; robots account for about 87% of those losses.The possibility that robots will take jobs away from people sound scary, but there are tworeasons why many other experts think that robots and automation will not reduce employmentopportunities. First, they point out that even though automation has been steadily increasing formany decades, the number of people who are employed now far exceeds the number who wereemployed 100 years ago. Although many factory jobs (and other low-level repetitive jobs) havedisappeared because of automation, many more jobs have been created because of automation. Inaddition to all the jobs that have been created for people who make the robots and otherautomated machinery, millions of other people have jobs that did not even exist just a few yearsago. The second reason is that human beings have skills that robots cannot duplicate (socialskills, emotional intelligence, creativity, and critical thinking skills), and these skills are crucialto the success of businesses today. Machines can replace the logic/math aspect of humanintelligence, but not the spatial, interpersonal, linguistic, and musical aspects.

Co-Bot

The traditional view that human employment will decrease is valid, but it is missing someimportant developments. It is true that a World Economic Forum report in 2020 estimated that 85million jobs may be displaced by 2025 with a shift in the division of labour between humans andmachines. That is an acceleration of an old trend. However, that same report indicated that 97million new roles will be required that are mora adapted to this new reality in which machines,algorithms, and humans share responsibilities in new ways. Some of the top forecasted positionsinclude robotics engineers, AI and machine learning specialists, and data analysts and scientists.

According to the International Federation of Robotics, auto companies have been the leaders inrobotics integration, and this newer trend is no different. GM is a leader in the use of

collaborative robots, or "co-bots", which work alongside humans. They are described as open-minded clever machines, and they are a key part of GM's plans for a major new plant in

Shanghai. The investment is clear. It is no coincidence that GM has also been aggressively hiringengineers and has invested $.18 million in Ontario alone to encourage students to study STEM(science, technology, engineering, math) programs. The examples are everywhere. At one newAmazon warehouse, 2,000 employees work alongside a fleet of robots filling customer orders(Amazon has over 200,000 robotic vehicles in its various fulfilment centres).

To be clear, not all robots will be powered by AI in the future, but the change is real, and theevolution is remarkable. Just like so many aspects of today's business world the ground isshifting. These human-co-bot interactions are unique to the times, but just as in the past, theworkers, managers, and companies that can best adapt to the new realities are the ones that willthrive.

QUESTIONS

1) Consider the following statement: "The use of robots is not a good idea. Although they doincrease efficiency, they depersonalize the work environment and the positive aspects of humaninteraction, and this will be lost when robots are introduced." Do you agree or disagree with thestatement? Explain your reasoning.

2) Describe the chain of events that is likely to occur after a robot starts doing a job that a humanused to do. What is the overall conclusion about the impact of robotics on companies and thepeople who work in them?