Robotics: Revitalizing American Manufacturing

Much has been said over the last few years about the loss of American jobs to other countries. The fact is that China and India, as well as other cheap labor countries, have taken a good number of jobs. Many of these jobs will likely never return.

I wrote a 2006 article for the E-Commerce Times titled “Why Money Chases Cheap Labor — The Outsourcing Phenomenon.” The article attempted to explain why industry will probably always follow the path of least resistance when trying to lower the costs of manufacturing. The reason for this is that industry has to be competitive in order to remain viable.

Is there a way, however, by which industry can stay competitive — especially with its labor costs — without outsourcing jobs? There is, and the answer is robotics.

Smart Robots

Robots have come a long way. There was a time when robots were mainly used in the auto industry. Robots were then used to do the heavy and dangerous lifting. Today, we have smart robots — robots that can be quickly trained to do many tasks. Some of these tasks require mind-numbing, repetitive actions; others might require some intricate and delicate operations.

A leader in the field of modern-day robotics is a Massachusette company called Rethink Robotics. Several venture capital companies, including Bezos Expeditions — the personal investment company of Jeff Bezos — fund it.

Rethink Robotics has succeeded in giving robots a “brain.” Line personnel can now quickly train these robots to perform a wide variety of tasks. Why is this so important? Factory personnel previously performed these tasks. If the tasks were at all repetitive or simple, there was a great risk that the line personnel’s jobs could be outsourced to another country that had inexpensive labor to perform such tasks.

Now, because of smart robots, factory personnel can focus on training the robots and supervising what they are doing.

Why Won’t Robots Spur Greater US Job Losses?

As I see it, if the robots are manufactured in America, as Rethink Robotics is doing, the country will have created a relatively new industry: The manufacture of smart robots. This production helps prevent the outsourcing of jobs by creating new jobs, and by recapturing jobs that were lost to countries like China and India.

Rethink Robotics and other companies can successfully bring manufacturing back to the U.S., as long as they can make quality robots that will assemble products efficiently, consistently and in a cost-effective manner.

If you are an American manufacturer, why would you outsource the assembly of your product in order to garner the low labor costs of a foreign country, when you can purchase robots that can do the same job as good or better than foreign workers, and at a similar or lower price? It just wouldn’t make sense.

Besides the attraction of lower manufacturing costs, having American-made robots make a product in the U.S. would save on shipping a product from a country that might be more than 5,000 miles away.

Repetitive Jobs Can Ideally Be Handled by Robots

There are so many jobs being done throughout the world that are mind-boggling in their repetitiveness, not to mention the danger involved in some of them. There are smart robots being manufactured in the U.S., however, that can perform a wide variety of repetitive and dangerous jobs in a safe and inexpensive fashion.

The number of jobs that a robot can perform is quite extensive. There is packing and unpacking, sorting, inspecting, transferring certain products to different assembly lines, rejecting defective products, weighing products, alerting management as to certain recurring product defects … the list is endless.

Robots can do many jobs now performed by people with minimum training and experience. So long as these jobs can be performed efficiently and economically, it is inevitable that robots in the not-too-distant future will take these jobs away from workers. In many cases this will mean that workers will be freed to perform more complicated tasks. Unfortunately, in other cases it will mean those workers will be displaced.

Why Robotics Will Be a Net Gain for the US

Some will certainly worry that robots will take jobs away from American workers. One has to reflect, however, on how many jobs have already gone to foreign countries because the cost of labor is cheaper there. Those jobs will never return — except through robotic manufacturing in the U.S.

Robotic manufacturing, when it brings jobs back to America, will create a net gain. The robots first have to be manufactured, presumably in the U.S.; then plants will have to be built to accommodate for the manufacture of the repatriated products; then personnel will have to be hired to supervise and manage the plants that are creating these products.

Times inevitably change. Who would have thought that we’d be talking about smart robots? It was something that we’d only seen in science fiction. Well, the fiction has become today’s reality, and we are faced with the dilemma and the opportunities that the manufacture and placement of smart robots bring with them.

America will maintain its world economic dominance because it is consistently on the leading edge of technology. With companies like Rethink Robotics that have created a whole new concept as to what is possible, the U.S. can’t help but maintain and advance its economic leadership in the world.

Who knows, someday we might even have our own personal robot at home that can perform a plethora of boring tasks, like cleaning the house, gathering and laundering our clothes, monitoring the safety of our home, etc. We’ll just have to snap our fingers and say, “Hey R2-D2, fetch me …” Something I’d never say to my wife!

Good luck!

Theodore F. di Stefano

Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, which provides a wide range of investment banking services to the small and medium-sized business. He is also a frequent speaker to business groups on financial and corporate governance matters. He can be contacted at [email protected]. Follow Theodore F. di Stefano on Twitter.

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