Speed wins

How the automation of workers will transform the labour market

Text by Tim Hornyak

The Luddites who outraged British industry in the early 19th century, smashing Jacquard looms in a bid to protect jobs and workers’ rights, would be horrified at the ubiquity of labour-saving machines today. After all, there are more robots now than there were people in London in 1815. But these machines are smart and getting smarter. If you believe Masayoshi Son, founder and CEO of SoftBank Group — which has sold over 10,000 units of the humanoid robot Pepper — robots that exceed human intelligence and population will be a reality within 30 years. But what does that mean for the flesh-and-blood labourers of the 21st century?

The growth of work place robots — expected to reach about 2.6 million units worldwide by 2019, according to the International Federation of Robotics — isn’t confined to manufacturing. Just look at logistics. After buying Boston-area robotics firm Kiva Systems in 2012, e-commerce giant Amazon has built an army of squat droids that move merchandise around its warehouses. It now has 45,000 robots working in about 20 distribution centres, up from 30,000 in 2015.

Indeed, by the early 2030s, automation could replace 38% of jobs in the US, 35% in Germany, 30% in the UK and 21% in Japan, according to a recent study by consultancy group PwC. The study predicted that the risks for the UK are highest in sectors such as transportation and storage, manufacturing, and wholesale and retail, while industries such as education, health and social work were among the least likely to be affected. Eventually, however, service jobs will be caught up in the automation tide: San Francisco startup Momentum Machines has developed a machine that can make 400 bespoke hamburgers per hour; its cofounder has been quoted as saying it aims to “completely obviate” burger-flippers.

“Commodity businesses and products are the ones most affected by rising labour costs with consequent automation and, in recent years, the deployment of robots,” says Frank Tobe, a robotics investor and publisher of The Robot Report. “In manufacturing, the days of robots taking the low-hanging fruit are over; now robots are doing most of the other tasks as well as the DDD [dull, dirty and dangerous] ones. And as the robots get better through new tech and deep learning, we are assured of seeing massive and radical changes in manufacturing, agriculture, autonomous vehicles and home-assistant products.”

Tobe points to Taiwanese electronics maker Foxconn, famed for producing devices for Apple and Samsung, as an example of how contract manufacturers are deploying more and more robots to cut labour costs. In 2011, Chairman Terry Gou was quoted as saying the company wanted to use one million robots in three years, up from 10,000 already in use. In 2016, reports swirled that Foxconn had replaced 60,000 Chinese workers with robots, but the company denies it.

“Across all of our facilities today, we are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees,” Foxconn Technology Group said in a statement, “and, through training, also to enable our employees to focus on higher value-added elements in the manufacturing process, such as research and development, process control and quality control.” The company refused to say how many robots it has deployed, but asserted that its emphasis on automation has not led to layoffs — only to slower recruiting and fewer jobs due to natural attrition.

Even outside tech-heavy manufacturing, automation is changing industries in surprising ways. In the Bavarian town of Ansbach, German sportswear titan adidas has opened a new kind of factory that’s designed to meet rapidly changing consumer tastes. While nearly all of its sneakers are made by hand in Southeast Asia, adidas has decided to bring part of its production back home — but to use machines. The SPEEDFACTORY, as it’s called, will eventually churn out 500,000 pairs of sports shoes annually. An early example is the Futurecraft MFG (Made for Germany) shoe, which incorporates adidas’ Boost outsole and a Primeknit upper with ARAMIS foot-mapping technology for better support. The shoe is one example of how adidas is trying to evolve design and production. Its Futurecraft 4D sneaker is made with a 3D-printed midsole. The company plans to begin serial production in Ansbach this summer and open another heavily automated plant in Atlanta in the US.

While the plants will only turn out a fraction of adidas’ yearly output of 360 million pairs of shoes, the move has attracted attention because it radically shrinks the supply chain: an idea can become a product in hours instead of weeks. In addition to Kuka industrial robot arms, the plant employs technologies such as computerised knitting, laser cutting and additive manufacturing. The idea is to keep design and production as nimble as possible.

“As a sports brand, we know:  speed wins,” says adidas spokesperson Katja Schreiber. “With adidas SPEEDFACTORY, we are saying goodbye to long lead times, products and materials travelling across continents, the idea of centralised, conventional production … It’s important to note that we use automation where needed and combine it with craftsmanship, which is key to running and maintaining the SPEEDFACTORY, as well as to give the product the finishing touch.”

Schreiber adds that, instead of robotising everything, the company will be adding traditional manufacturing suppliers in Asia to meet sales targets of 10–12% annually through 2020.

It’s perhaps no wonder that adidas refers to its customers as “the creators”, because creativity is one of the few human skills that machines are still terrible at. A 2015 report by UK innovation nonprofit group Nesta predicts that 87% of UK jobs requiring workers to be highly creative will be at low or no risk from automation. So, if you’re an artist, musician or architect, rest assured. You still have at least a few decades in which our species will continue to dominate.  •