Robots are replacing human manufacturing workers in France, and making companies more productive in the process.
Daron Acemoglu at the Massachusetts Institute of Technology and his colleagues analysed more than 55,000 French manufacturing firms, noting which ones bought robots between 2010 and 2015 and what impacts the purchases had.
鈥淭here is obviously increasing concern about what automation means for productivity, for jobs, for inequality,鈥� says Acemoglu.
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The team found that a 20 per cent increase in robot use across the manufacturing industry was associated with a 3.2 per cent industry-wide decline in employment.
Compiling data from robot suppliers, records of robot imports and the French Directorate General for Enterprise, the researchers found that only around 1 per cent of firms purchased robots.
But these 589 companies were large, accounting for a fifth of total employment in the French manufacturing industry.
鈥淲hat鈥檚 striking, although not completely surprising, is that firms that adopt robotics actually expand quite a bit,鈥� says Acemoglu.
The firms that used robots increased their value by an average of 20 per cent. As a result, these firms increased their overall employment, but employed fewer production workers, instead hiring people in other areas such as sales.
鈥淭he sales of these firms increase more than their labour share declines,鈥� says Acemoglu.
However, the growth of these companies came at the expense of other manufacturing companies who didn鈥檛 use robots. The team found that employment in competitor firms declined, because other firms were disadvantaged by the reduced costs made possible by automation.
鈥淲e find that the contraction effect is always bigger, so overall there is a decline in industry employment,鈥� says Acemoglu.
Acemoglu鈥檚 previous research has similarly found that in the US, industrial robots are associated with reduced employment of workers in manufacturing jobs.
Historically, the creation of new jobs has absorbed workers being displaced by automating industries.
鈥淔or some reason, this creation of new tasks for workers to counterbalance automation has become slower over the past 30 years,鈥� says Acemoglu. 鈥淭hat鈥檚 why automation has become more damaging.鈥�
Reference: National Bureau of Economic Research,
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