Tracing the impact of automation on workers and firms

By William Rinehart

Published:

Productivity across firms

If automation were on the horizon, businesses should be investing in these labor-saving technologies, which would be present in business investment surveys. But business investment has plateaued. As the graph below helps to illustrate, domestic investment in the private sector has been below the peaks in the early 2000s.

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The impact of automation and switchover costs

Although some firms have gotten more productive, automation techniques are unevenly adopted across industries. The classic example of robots working in manufacturing underscores this point. From 2004 to 2013, there was virtually no change in the level of robotization in non-metallic mineral products like ceramic and glass. But, the automotive industry, which was already heavily reliant on robots, experienced a spectacular rise in the robot density between 2004 and 2013.

Conclusion

Importantly, the wheels are already in motion to better understand these changes. After being prodded by the Government Accountability Office in 2019, the Department of Labor began working with the Census Bureau to create a new set of stats to better understand how the workplace is affected by technological changes like automation and AI. Once the first of these reports are released next month, leaders will have their first look into this important part of the economy.

CGO scholars and fellows frequently comment on a variety of topics for the popular press. The views expressed therein are those of the authors and do not necessarily reflect the views of the Center for Growth and Opportunity or the views of Utah State University.