Conventional wisdom says that it's only a matter of time until a robot takes all of our jobs. But if this is the case, why are the world's largest robotics manufacturers struggling for sales and profit growth?
Switzerland-based industrial giant ABB Ltd, one of the largest manufacturers of automation systems, announced a major shortfall in profit expectations Tuesday and the stock immediately dropped more than 4 per cent. To be fair, the reduced earnings guidance was not the result of the robotics divisions, it was related to the electrical power division.
Still, a closer look at a revenue breakdown shows minimal growth in the company's robotics business. And it's not just ABB. Japan's FANUC Corp is another robotics and automation giant with a similarly uninspiring growth profile.
Are these the stocks of companies about to take over the world?
SOURCE: Scott Barlow/Bloomberg
The much-touted ascendance of our robot overlords has clearly been overhyped. The International Federation of Robotics predicts a six per cent growth rate for the industry through 2016 which, while significant, seems paltry in comparison to the dystopian predictions like "The Rich and Their Robots Are About to Make Half the World's Jobs Disappear."
I'm not suggesting automation and robotics won't be a major economic theme at some point in the future. In some industries, it's already prevalent. But the vast majority of unemployed North Americans were replaced by another human being – Chinese, Mexican or Vietnamese – not a robot.
With so much carnage in manufacturing sectors behind us, white collar workers are the ones who have the most to fear from technology in the short term. A recent paper by two Oxford University professors, "The Future of Employment: How Susceptible are Jobs to Computerisation," concluded that the professions most at risk of obsolescence are office- and cubicle-bound jobs, namely telemarketers, accountants and auditors, retail salespeople and technical writers.
Software, not hardware, will be the major cause of unemployment for services-oriented, paper-pushing developed market economies.