Daily Management Review

Robots to Transform Global Economy in next 20 years Says Bank Report


Robots to Transform Global Economy in next 20 years Says Bank Report
In the next 20 years, a “robot revolution” will transform the global economy says a recent report prepared by the investment bank - Bank of America  & Merrill Lynch.

The economic transformation would happen due to reduction of costs of doing business but exacerbating social inequality, as machines take over everything from caring for the elderly to flipping burgers, according to a new study.
It is also anticipated that the development of artificial intelligence means computers and robots would increasingly able to “think”, performing analytical tasks once seen as requiring human judgment.
The 300 page report has been based on the latest research to outline the impact of what the researchers regard as a fourth industrial revolution, after steam, mass production and electronics.
“We are facing a paradigm shift which will change the way we live and work,” the authors of the report say.
“The pace of disruptive technological innovation has gone from linear to parabolic in recent years. Penetration of robots and artificial intelligence has hit every industry sector, and has become an integral part of our daily lives,” they add.
However this robotic revolution would come at a human cost. The citing an Oxford University research, the report estimates that up to 35% of all workers in the UK, and 47% of those in the US would be at risk of being displaced by technology over the next 20 years. The loss of jobs would primarily be at the bottom of the income scale.
 “The trend is worrisome in markets like the US because many of the jobs created in recent years are low-paying, manual or services jobs which are generally considered ‘high risk’ for replacement,” the bank which published the report says.
“One major risk off the back of the take-up of robots and artificial intelligence is the potential for increasing labor polarisation, particularly for low-paying jobs such as service occupations, and a hollowing-out of middle income manual labor jobs,” it adds.
The total global market for robots and artificial intelligence is expected to reach $152.7bn (£99bn) by 2020, the report estimates. However the report also estimates that productivity in some industries would increase by 30% due ot the adoption of robotic technologies.  The robotics market is expected to be worth $66.9bn by 2025
To hightlight the growing importance of robots, the report cites the buying of eight robotic companies by Google in two months in 2014 including Boston Dynamics that makes the BigDog robot and DeepMind that specializes in deep learning for artificial intelligence.
Robots have already taken up important positions in the most advanced manufacturing sectors. For example, in Japan’s carmaker market, robots are already able to work unsupervised round the clock for up to 30 days without interruption. This adoption of robotic technology can save up to 65% on labor costs and replacing human workers with robots saves up to 90% in terms of wages.
On the global scale, there are an average of 66 robots per 10,000 workers. However the report finds that in the highly automated Japanese car sector there are 1,520 robots per 10,000 workers.
While he threat to jobs is a reality with robots replacing humans, the report also states that the robotic revolution would also create many more new jobs associated with development, production and maintenance of the robots.