Will your next hire be a robot?
A new report by the Boston Consulting Group finds that 1.2 million additional robots will be used in U.S. industry by 2025. The forecast, if true, could have many vast effects on the business world.
For one, manufacturers will likely replace about 22 percent of their human workers with robots, BCG predicts, because the price of robots is falling quickly. The report notes that businesses often start considering robots when the cost of using them is at least15 percent less than employing a human. This could lead to huge cost savings, reducing manufacturers’ labor costs by an estimated 16 percent.
That means it will cost less to manufacture items in the United States and will likely reduce the number of companies moving their manufacturing operations overseas. It may even convince some companies to “reshore” and bring their manufacturing operations back to the United States.
By 2025, robots will perform about 25 percent of the “automatable tasks” in manufacturing worldwide, BCG says.
“As labor costs rise around the world, it is becoming increasingly critical that manufacturers rapidly take steps to improve their output per worker to stay competitive,” Harold Sirkin, a BCG senior partner, said in a news release. “Companies are finding that advances in robotics and other manufacturing technologies offer some of the best opportunities to sharply improve productivity.”
While a move toward robots will certainly have huge implications for the manufacturing world, what will it mean for small businesses? Well, for starters:
Lower manufacturing costs. It’s likely that as manufacturing costs fall, some of that savings will be passed along to small businesses that hire contract manufacturers.
More “Made in the USA.” If the price differential between manufacturing abroad versus the United States indeed narrows, more small companies will likely decide to keep their manufacturing domestic.
Small businesses will get robots, too. It’s not just large companies that will benefit from robots. There’s a growing number of small companies, from jewelry makers to toy makers, using robots, thanks to an emergence of robots priced as low as $20,000, according to The Wall Street Journal. Panek Precision, a Northbrook, Illinois-based machine shop, has doubled the output of a machine that used to be operated by humans. “Having the robots has allowed us to move our existing workers into more useful tasks,” Gregg Panek told WSJ.
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