Joshua Jacobs and Eftychis Mourginakis — China robots signal US challenge

A little over two years ago Terry Gou the CEO of Foxconn announced that over the next three years his company was going to begin phasing in up to 3 million industrial robots with an eye towards increasing efficiency and reducing labor costs. This announcement, from the world's largest electronics contract manufacturer, sent waves through the media and business community. Foxconn employs over 1.5 million people in China, in hundreds of plants and facilities, scattered around the country. 

The prospect of Foxconn shifting towards robotic labor has enormous implications for the future of not just the Chinese, but also global labor markets. This is primarily because of the type of work that the robots engage in is the assembly of complex electronics, an area previously thought beyond the capabilities of commercial robotics and left presumably to human hands. So far, the robots seem more than up to the job. 

While the headline grabbing prediction of "millions of robots" does not seem to have panned out in the time frame that Gou predicted, Foxconn has nevertheless managed to deploy significant numbers of its new robotic workers. Over the course of last year, Foxconn managed to install 30,000-50,000 new robots in its factories, and is aiming for 300,000 more by 2014. 

What is astounding about this information is the impact it already has had. According to Liu Kun, a spokesman for Foxconn, "We have canceled hiring entry level workers, a decision that is partly associated with our efforts in production automation."...

The fear in China is that the Lewis Turning Point, the point where rural laborers moving to urban manufacturing loses its value, is being accelerated by the mass adoption of industrial robotics that reduce the value and efficiency of new human labor. 

Asia Times Online
China robots signal US challenge
Joshua Jacobs and Eftychis Mourginakis

Interesting article, but written by conservative authors, so no mention of negative externalities, unemployment, or effective demand. This is going to be the push of firms globally, however, and the article sets forth the corporate strategy.