Ways Robots Will Affect the Economy
Thu, April 22, 2021

Ways Robots Will Affect the Economy

Robots have increased productivity, decreased production costs, and even created new jobs in the tech sector / Credits: sdecoret via Shutterstock

 

For years, robots have increasingly become a part of our industries, particularly in the manufacturing and agriculture sectors. These machines have increased productivity, decreased production costs, and even created new jobs in the tech sector. Thus, it’s not surprising to see robots becoming present in businesses. For instance, Amazon.com Inc. has been using a variety of robots to stock inventory and retrieve and package items.

Aside from Amazon, Tesla Motors Inc.has fully robotic and automated assembly lines for its electric cars and batteries. This shows that robots are making inroads into tasks like driving, logistics, and inventory management. Despite its negative impact on labor segments, robots and automation remain a huge part of every industry’s success. Here are some ways the industry will affect our economy in the future.

1 - Gross Domestic Product Growth

A 2015 study conducted by Georg Graetz of Uppsala University and Guy Michaels of the London School of Economics titled "Robots at Work" analyzed the impact of robots in the economy. According to Investopedia, American website based in New York City that focuses on investing and finance education along with reviews, ratings, and comparisons of various financial products such as brokerage accounts, the findings revealed that the increasing use of industrial robots for a 15-year period ending in 2007 raised the annual growth of GDP by 0.37%. 

2 - Productivity Growth

Along with GDP growth comes productivity growth. Investing in machines, computers, robotics and other items that produce output can increase capital and total factor productivity (TFP), which is considered as the most important source of productivity growth. For instance, if the machines the companies are using cause an increase in productivity, the TFP will continue to rise. This can result in higher wages, lower pricing of goods and services, and an overall greater variety of products and services.