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August 14, 2012

Workforce size, Urban Workforce and Automation in China and the World

China has about 4.1% urban unemployment now and one of the big arguments about collapsing future GDP growth is that China's working age population will shrink as the population ages.

From Wikipedia on growth accounting, we have the economic formula for growth

Y= (F,K,L)

Y is total output, K is the stock of capital in the economy, L is the labor force (or population) and A is a "catch all" factor for technology, role of institutions and other relevant forces which measures how productively capital and labor are used in production.

You get more growth out of more labor and/or more technology and/or more capital.

If the overall labor growth slows or decreases that would be a problem, but I am saying for the next 20-40 years there is still urban workforce growth for China and there will be developing automation, But automation takes time. Even with Foxconn scaling out a million industrial robots over three years that is only a fraction of the labor force growth of ten million more urban worker per year.

There is about ten million robots now and about 1.5 million industrial robots.

Robotics turnover 2010: $17.5 billion


Another 180,000 industrial robots in 2012.



Industrial robots today
* Production assistant of the worker without fence
* Easily programmed by lead through teaching
* Handling of about 1,300 kg
* Light weight - only 14 kg
* Saving energy

There is also a new wave of robots coming with tablets for their heads (with cameras, processors and displays.) Those will be enhanced consumer and business robots. I am thinking there will be 100 million to 2 billion of those by 2020 and I would be considered very optimistic for those targets.

However, the tablet bots will not replace workers in most jobs. Those will be co-robots. Robots that work with people and enhance telepresence.

Those who are arguing that robotics will cause massive unemployment are wrong for the next few decades. The scale of deployment and capabilities are not there to cause massive unemployment. If anything there is need for fast deployment and more capabilities to help aging populations to maintain more independence.

Aging populations will especially need robotic cars.

Bigger impacts on reducing the need for employees are from current changes like ecommerce and business process changes.




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