Creating jobs by replacing jobs?
Conventional wisdom holds that automation usually leads to the loss of jobs. But one company has a very different take on the matter.
To listen to the politicians, it's all about jobs. In fact, if there's anything that politicians of all stripes can agree on, it's that it's "time to put Americans back to work."
So the following statement will likely strike many as heresy: It's not just about jobs. It's about productivity.
Renowned economist Barry Asmus, a regular speaker on the conference circuit, has more than once declared that the politicians have got it all wrong when it comes to the economy in general, and employment in particular. "They all talk about creating jobs," he says. But job creation, he argues, is not what drives economic growth.
"If we want to simply create jobs," Asmus quips, "the federal government should just shut down all heavy equipment manufacturers, take their existing equipment out of the market, and ... give everyone a shovel." Instead of having three people operating heavy equipment, we'd have 3,000 people doing the same work by hand, he says. "So we created jobs, but we put productivity in the tank. The politicians have got to learn—and quickly—that it's not about jobs; it's about productivity."
Asmus is right ... to a point. With unemployment rates at their highest levels in decades, we do need jobs. We need them badly. But if we hope to drive economic growth, we also have to kickstart manufacturing productivity. That is, we have to find better, faster, and cheaper ways to make products.
Problem is, history has shown that it's tough to achieve both objectives at once. While countless companies have realized double-digit productivity gains through automation and robotics, the gains have often come at the price of jobs. But it doesn't have to be that way. A number of companies right here in the logistics and supply chain world have made that clear.
Take Crown Equipment Corp., for example. Crown recently brought 50 welding robots on line in its lift truck manufacturing operations, but the move didn't result in a round of layoffs. Instead, the New Bremen, Ohio-based company will retrain the affected employees and shift them to new jobs.
It's the same story over at MCFA (Mitsubishi Caterpillar Forklift America) and Toyota Material Handling USA. MCFA has automated its painting process and brought in robotic welders and metal-cutters, while Toyota has introduced automated guided vehicles into its manufacturing process. But neither move resulted in a blizzard of pink slips. These companies, too, simply reassigned workers to other positions.
While Crown, MCFA, and Toyota have amply demonstrated that it's possible to preserve jobs when automating operations, another company takes the argument a step further. Pittsburgh-based Seegrid Corp., a maker of robotic technology, contends that bringing in robotic devices can actually create jobs in the long term. David Heilman, the company's chief administrative officer, explains the company's position this way: "Our customers are growing and innovating by using robots to increase facility productivity and efficiency to become more profitable, thus expanding their operations and adding more jobs."
Seegrid isn't alone in its view. The National Institute of Standards and Technology (NIST), a federal agency that promotes U.S. manufacturing competitiveness, has reached the same conclusion. On a section of its website devoted to next-generation robotics and automation, NIST cites a report by the Computing Community Consortium that concludes in part that "[robotics] clearly represents one of the few technologies capable in the near term of building new companies and creating new jobs."
Will all this lead to putting Americans back to work? Only time will tell. But how great would it be if robots succeeded where politicians could not?More articles by Mitch Mac Donald
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