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.
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.
consumers expect instant delivery—in metropolitan
centers within one or two hours. Amazon Prime is a
life case example.
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
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
“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
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.
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
in the form of self-driving trucks and unmanned aerial
vehicles will help to ease this pressure on the transportation
industry.” Sky King
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