Dive Brief:

One industrial robot displaces an average of 1.3 workers the first year after installation, but the rate grows to 1.6 workers in the following years as companies figure out the best way to deploy robots in operations, according to a report released last June by Oxford Economics.

China has seen the greatest decline in its manufacturing workforce since 2000 with 550,000 fewer people working in the sector as of 2016. China also leads the way in automation — accounting for 36% of global industrial robot sales in 2017, the report found.

The automotive industry leads the way in industrial robot installations with 103,000 in 2016. "[I]nnovations in autonomous and electric vehicle manufacturing requires increasingly sophisticated production chains, and this has sparked demand for new, more powerful, and intelligent machines to build them," the report reads.

Matt Leonard / Supply Chain Dive, data from Oxford Economics

Dive Insight:

Determining the impact robots have on employment is complicated.

Where some businesses and experts see robots allowing workers to focus on "higher-value work" by automating the mundane, Oxford Economics sees a link between automation and worker displacement.

The number of robots per worker has more than doubled in the last decade to reach 1.81 robots for every 10,000 workers as of 2017, according to a study by The Century Foundation. The same study, which focused on the U.S., found that robots mostly displaced employees in the American Midwest who were mostly young, less-educated, minority workers. It wasn't able to find any evidence of worker displacement nationwide, but did find evidence of displacement in the Midwest — which has the highest rate of robots per employee.

Oxford Economics argues any displacement would be offset by the productivity gains and price decreases seen as a result of automation.

"Since most manufactured goods are highly tradable (because they are cheap to transport and have a long shelf life), the households that benefit from cheaper goods are widely dispersed," the paper argues. "By contrast, the communities most reliant on manufacturing jobs — and thus most affected by the introduction of new technology — are typically much more concentrated."

Millions more around the world will lose work as a result of automation if the current trend continues, Oxford Economics said.

The sales value of robots hit a record high in 2018 — $16.5 billion for the year with 422,000 robotic units shipped — as companies look to automation for greater efficiency and expense reduction, according to the most recent data available from the International Federation of Robotics.

China has been investing heavily in manufacturing automation in recent years. The city of Dongguan has invested the equivalent of $56.8 million to increase factory automation, according to the South China Morning Post.

Country-wide, this has resulted in a 30% to 40% reduction in workforce, according to a survey of selected companies by the China Development Research Foundation cited by the paper.