retail news in context, analysis with attitude

by Kevin Coupe

It may be the most accurate reflection of the new economy in which we all must survive.

The BBC reports that Foxconn Technology Group - which supplies components to companies like Apple and Samsung - recently replaced 60,000 factory workers in China - with robots. And according to the story, this is just the beginning of an evolution that is occurring because "China is investing heavily in a robot workforce."

Foxconn released a statement to the BBC saying, "We are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees, and through training, also enable our employees to focus on higher value-added elements in the manufacturing process, such as research and development, process control and quality control."

The spin that Foxconn is offering is that employees are not being laid off, but rather just moved into different jobs: "We will continue to harness automation and manpower in our manufacturing operations, and we expect to maintain our significant workforce in China."

The story notes that robotics are often held up as a solution to various problems, such as calls in the US for a higher minimum wage. Former McDonald's CEO Ed Rensi recently was quoted as saying that an increase in the minimum wage could force the fast feeder to move in this direction, saying that "it's cheaper to buy a $35,000 robotic arm than it is to hire an employee who is inefficient, making $15 an hour bagging French fries."

I have several reactions to the Eye-Opening development of robotic technology.

First, regarding the McDonald's scenario ... I suspect that it also is cheaper to buy a $35,000 robotic arm than it is to pay an "inefficient" person $12 an hour, or $10 an hour, or $8 an hour. I also think it could be argued that a better motivated and invested workforce might be more efficient, and actually could be good for business; it might come as a surprise to the folks at McDonald's, but an invested workforce actually can be a differential advantage. For the moment, it is more efficient for them to hold out robotics as a kind of "bogeyman" that allows them to justify paying people lower wages. (Robotics will seem preferable only up until the point where they develop a robot who can replace highly paid but inefficient human CEOs ... and then, suddenly, attitudes will change.)

Second, I can't help but think that while the major political parties in the Us have debates about how to save the coal industry, Chinese companies - and the government - are investing in advanced robotics. I'm not sure how this gives us an advantage on the global business stage, or keeps us relevant. (I'm not saying that people employed in the coal industry are unimportant ... just that the debate is about the wrong thing.)

Finally, I don't believe that the advanced robotics technology won't replace workers. Advanced business cultures will have to find ways to employ these people in different kinds of jobs. After all, for the moment, at least, we need people to conceptualize, build and program the robots.

Until Skynet achieves independent, sentient consciousness, that is. Then we're all screwed.
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