In a recent analysis, Oxford Economics revisits the transformative impact of robotics and artificial intelligence (AI) on the global economy, five years after the publication of their groundbreaking study, "How Robots Change the World." Released in 2019, the report identified pivotal changes in manufacturing due to rapid advancements in industrial automation. At that time, Oxford Economics anticipated that 20 million manufacturing jobs could be lost by 2030, underscoring the need for targeted policies to navigate this significant workforce transition.
Since then, advancements in robotic technology and AI integration have significantly exceeded initial expectations, prompting a reassessment of their implications. In a statement regarding the findings, the report acknowledges that, while the original focus was primarily on hardware and industrial applications, the subsequent rise of generative AI technologies has dramatically reshaped the landscape. "Our quantitative analysis of the impacts of robotics was focused on hardware and industrial uses. While we recognised the huge potential in service applications, we underestimated how quickly advanced AI systems like GPT and DeepMind would mature, achieve mass adoption, and feed back into robotics," the report notes.
The synthesis of AI and robotics has opened previously unimaginable avenues in business, particularly in areas previously deemed ‘safe’ from automation such as finance, journalism, and healthcare diagnostics. This advancement has necessitated a reevaluation of the jobs susceptible to displacement, highlighting the breadth of industries that are now being affected.
The economic landscape in manufacturing has seen a considerable uptick in robotic application, with a marked increase in productivity following the COVID-19 pandemic. The International Federation of Robotics identified a significant surge in robot density, especially in countries like China and South Korea. Additionally, the use of collaborative robots, or cobots, has escalated, functioning side by side with human workers in environments ranging from e-commerce warehouses to surgical suites.
Furthermore, there has been a notable spillover effect of robotics into traditionally non-industrial sectors. AI-powered robots have become commonplace, fulfilling roles such as concierge services, grocery deliveries, and elder care. The emergence of humanoid robots, exemplified by Tesla’s Optimus and SoftBank’s Pepper, has blurred the distinctions between tools and colleagues in various workplace settings.
Looking ahead, the report highlights a crucial takeaway: while the potential impacts of technological displacement were properly identified, the rapidity and scale of disruption were underestimated. The swift enhancement of computing power, alongside the widespread availability of advanced AI tools, has made these resources accessible not solely to large tech enterprises but also to startups and SMEs. This accessibility has implications for economic rejuvenation, particularly in ageing economies such as Japan, China, and parts of Europe.
Nonetheless, the report also indicates a concurrent escalation of societal challenges, particularly regarding the digital divide—a disparity that reflects unequal access to technology and its economic benefits. As advanced economies advance in AI and robotics, there remains concern for developing nations heavily reliant on low-cost labour and local communities that may struggle to compete in this evolving landscape.
In discussing the future, the report posits that understanding and effectively distributing the economic benefits of this technological transformation is paramount. There is an ongoing emphasis on improving the quality of dialogue between policymakers, technology leaders, and businesses to alleviate potential negative social impacts.
As the global economy increasingly incorporates more intelligent and adaptable robots, the implications for work, creativity, and innovation are profound. The insights offered by Oxford Economics aim to guide companies and stakeholders as they navigate the complexities of this rapidly evolving technological environment, marking a significant shift in how businesses may operate in the years approaching 2025 and beyond.
Source: Noah Wire Services