Million Robots Replace Cheap Humans

Filed in Mike Block CPA, Personal by on August 4, 2011

The largest electronics manufacturer now says a million robots will replace cheap humans in China.

Taiwan’s Foxconn has about a million Chinese workers. The million robots will replace cheap humans in basic manufacturing spraying, welding and assembly, in three years. It is unclear how many will lose jobs. However, even though the million robots will not completely replace cheap humans, this is a big shift. Apple, HP, Dell, Nokia, Sony and others use Foxconn. It is responsible for nearly half the technology produced in the world! If it has a million robots replace cheap humans, can the rest of the world be far behind?

The comment came at a company dance (way to kill the mood). Rising Foxconn expenses have bad press and financial costs. Since 2010, world news outlets reported suicides of Foxconn Chinese workers, supposedly due to harsh conditions, long hours and low pay. Therefore, this announcement may be a political statement and business plan.

Foxconn also plans to increase mainland China workers to 1.3 million this year, so it may grow in human and robot workers, or may only use cheap labor as it increases automation. Either way, the company means to stay at the top of the global electronics market.

This shows Foxconn is the biggest name, increasing production at incredible speed. Compound annual growth has been over 50% for a decade. If they think increased automation will maintain growth, others will want (need) to follow suit.

Finding the cheapest and most efficient labor is one key ingredient of manufacturing success. If Foxconn will replace or augment its workforce with an equivalent number of machines, the world may be moving in that direction. We have seen many modern factories automate to remove most human workers. Even cheap labor markets often see machines and humans work together to increase efficiency. As Foxconn follows through, they will give insight into the best man – machine ratio to optimize production. It may add a million robots, but keep most humans to meet massive global demand for cheap electronics.

Whatever the Foxconn human – robot ratio, the percent of us in manufacturing will decline. As machines become more sophisticated and human costs (medical expenses, lawsuits, etc) rise, robots will make more sense for a many repetitive tasks. In essence, the world’s largest electronics manufacturer confirmed the end of human factory labor.

What will that mean in the years ahead? It is possible, as US robot makers recently said, that automation will increase higher-end jobs to post-industrial nations. It also is likely that we may struggle during the human – robot transition, though economies thrive, leading to more “jobless recoveries.” Martin Ford, in The Lights in the Tunnel, argues that moving to a robot-based economy will ultimately require enormous shifts in government and economics, as most humans no longer do traditional work.

That is speculation. What is certain is that Foxconn will do everything to keep providing cheaper electronics to leading brands. In the near term, that means more inexpensive computers and mobile phones. However, it should fuel a more public substantive debate on the importance of automation.

Traditional news coverage is short sighted and uninspiring in facing the global automation crisis. It affects us all. Factories were the first to automate, but law firms, CPAs, news agencies, call centers and dozens of other industries will soon replace / augment human labor with artificial intelligence software. We must ask tough questions:

  • How do we transition as painlessly as possible?
  • Can we provide an automation foundation for future generations?
  • When robots rule, where will we get the best returns?



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