The increased use of robotics and automation in the manufacturing and logistics sectors will, over the next decade, limit East-West trade growth and lead to a reduction of supply chain and air freight personnel involved in handling and distribution, according to Wolfgang Lehmacher, Head of Supply Chain and Transport Industries at the World Economic Forum.
      Lehmacher told FlyingTypers that the technological means and maturity to create autonomous supply and value chains was now almost here, and the adoption of new technologies could be seen in everything from flying shuttles to driverless cars and rolling robots. Citing Foxconn’s efforts to automate some of its electronics factories in Asia, which have led to personnel lay-offs, he said automation would equally affect manufacturing and distribution in the West and would encourage producers to locate closer to key markets to reduce transport costs, a move that could diminish air and ocean freight demand.
      “The costs of operating robots hardly differ by location—whether East or West, the cost of robots is more or less the same,” he said.
      “In automated businesses, labor cost differences become irrelevant. The difference then is the cost of transportation and so there are advantages in proximity to markets,” he said. “The closer the factory is, the faster the supply/service, and the better understanding of the customer’s needs and wants.
       “Today’s consumers expect instant delivery—in metropolitan centers within one or two hours. Amazon Prime is a life case example.
      “Furthermore, consumers expect regular changes of models with short lead times. This requires short supply chains. In the past, quality control was reason for centralizing production and worldwide shipping. Today, with high visibility of things through the Internet and powerful high performance control towers, manufacturers can centrally ensure the quality across a fragmented global production footprint.
      “With largely automated manufacturing, quality concerns are less and less a decision-making criteria. Production can easily go where the customer is located, shortening the distance of transport.
      “All these factors drive regional and local autonomous production, which reduces the demand for East to West trade flows.”
      Lehmacher said the adoption of new technologies would also lead to a fundamental restructuring of many workplaces. “Robotics/Automation is the synonym for labor substitution,” he said. “According to the Citi GPS report Technology at Work – The Future of Innovation and Employment, 62 percent of workers are at high risk of automation in manufacturing and 75 percent in transportation and warehousing.
      “At the same time, technology will create new job titles. For example, for control, maintenance, and repair.”
      But the question facing policy makers is to what extent the job gains offset the losses. Lehmacher said 1,500 new job titles emerged following the invention of the personal computer as new industries such as video and auto streaming, internet video broadcasting, and social networking services became commercially viable.
      “The app economy has surged since Apple launched its app store in 2008, providing work for an estimated workforce of more than 750,000 Americans,” he explained. “However, in 2010 only about 0.5 percent of the U.S. workforce was employed in industries that did not exist a decade earlier. Furthermore, the workers in these industries are substantially better trained than the average of the workforce and earned on average more than twice the U.S. median wage. Consequently, the new jobs created by technology have largely been confined to better skilled workers.”
      He said governments all over the globe needed to ensure that people were properly skilled in line with the needs of the automated world, and that those who could not or did not wish to keep up with the new requirements were not left behind and were helped to find a way of making a living.
      “This can be in more social and long-term oriented family businesses, in self-employment, in areas where human labor will continue to be needed, such as health care, or in the public sector itself,” he added.
      “But robotics and automation can also help to fill labor and skill gaps. According to a study carried out by AeroProfessional, more than 50 percent of airlines think there is a skill shortage. The American Trucking Associations estimate that the U.S. transportation industry is short of 35,000 to 40,000 drivers. Britain’s lobby groups estimate that the United Kingdom is lacking 45,000 drivers.

      “Robotics/Automation in the form of self-driving trucks and unmanned aerial vehicles will help to ease this pressure on the transportation industry.”
Sky King