Robots to displace most jobs in manufacturing and tech

04 August 2015 5 min. read
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The robots are coming, with 43% of manufacturing companies across the globe expected to replace more than 5% of their employees with robots in the near future, research by Grant Thornton shows. As more and more R&D is expended on replacing human intelligence with machines, the gap between those ‘in’ and those ‘out’ may soon radically increase. As it stands, more than half of businesses see themselves keeping their employees on board, with 28% redeploying them to operate the machines that replaced their function.

In a recent survey of 2,571 executives in 36 economies, Grant Thornton investigates how executives see the role of automation in their sector, as well as its projected effects on workers whose role is being replaced by robots. The article, ‘Jobs under threat from automation’, asks respondents whether they expect automation to replace at least 5% of their workforce, by industry.

Automating industry
The results show that the industry in which automation is most likely to affect more than 5% of workers is manufacturing (agreed to by 43% of respondents). This is followed by the renewables industry at 39%, technology at 35% and food and beverage also at 35%. The areas least likely to see reductions are education and healthcare, at 9%, and hospitality, also at 9%.

Steven Perkins, Global Leader for Technology at Grant Thornton, reflects on the coming changes: “In this digital age, businesses are looking to technology at an ever increasing pace. Post-financial crisis, firms continue to strive for greater efficiency and better productivity. But fifty years on from PCs going into mass production, costs of capital are low while labour costs increase. As businesses consider whether to invest in staff or machines, for many, the latter is becoming the more cost-effective option.”

Developing toward automation
The research further highlights that current R&D trends are accelerating the development of automatized processes. The number of businesses that invested in their development increased from 23% in 2011 to 26% in 2014, and will hit a five year high in 2015 as spending increases a further 29%.

The question of whether highly creative humans are creating the technology that will make non-creative jobs – yet intelligent jobs – redundant in the near future is still an open question to Perkins, who adds: “Are robots set to replace the workforce? That may be premature; technology has been introduced to the workplace since the industrial revolution and job roles have adapted accordingly. In fact, it’s likely the wrong question. We should be asking: ‘What human capabilities will be most enhanced?’ Clearly, the rise of artificial intelligence (AI), supercomputers and sensors previously the preserve of science fiction will have profound consequences for jobs, pay and the makeup of workforces.”

One consequence of the trend may be that, with the movement of people from high paid to lower paid – thus less intelligent – work, income inequality will increase further. Perkins reflects that: “This poses significant societal challenges. Technology is part of our lives in ways we couldn’t have imagined two decades ago, from the rise of big data to the app revolution. That trend will continue and it means the shape and size of workforces of the future will look radically different to those of today. How businesses and governments deal with these changes will be critical to long term economic growth prospects.”

Redeploying workers
The surveyed employers are not immediately planning to cut staff. More than half of the surveyed companies plan to redeploy affected staff. Of those kept, 28% expect the old employee to operate the machinery that replaces them. However, Perkins stresses that the long term effects of automation remain unknown. “The roles reserved for humans could look very different years from now and some will feel the effects more sharply. Automation in the first industrial revolution made us stronger, made us faster in the second, and in the third will give tremendously greater insights. The possibilities are enormous.”

Grant Thornton is not the only consulting firm to consider the looming effects of automation. Research by Aecus finds that robotic process automation is already implemented 32% of 100 CxO’s surveyed, with 44% more planning to deploy the technology in the coming three years. Alsbridge expects, with the help of robots, clients of their robotics hub may be able to achieve a 60% reduction in the cost of many IT services. Recent research from Deloitte and the University of Oxford finds up to 1/3 of UK jobs might disappear in the near future with the wide spread social and economic consequences still needing to be carefully considered by stakeholders.