This surge has been driven by lower cost , better accessibility and higher productivity of robots , and has been further accelerated by the Covid-19 pandemic and its fallout .

During and post the pandemic , small and large companies alike have significantly expanded their use of robots to continue operating under stringent labour and required health protocol conditions . Reports suggest that orders for robots increased by 20 % year-on-year in the first quarter of 2021 alone .

Historically , automation has improved productivity , per capita output , and living standards . Despite concerns of policymakers

that the pandemic-induced automation drive might displace more jobs than it creates , it is believed that overall , the past trend will persist , and workers will continue to benefit from the productivity boost .

While robotisation will displace some workers and cause short-term disruptions in the labour market , it simultaneously increases demand for skilled labour , ultimately creating more jobs than it destroys . Technological advancement will change the way we work , and the skills needed in the modern labour force , but this should not be seen as leading to a decline in the demand for workers in aggregate in a baseline forecast .

That said , there are other possible ( though less likely ) outcomes to this increase in robotisation . Some recent

studies have fuelled the growing anxiety over automation implications , suggesting that employment may not benefit from upcoming technological advancements the way it has done in the past and instead will fall victim to substantial displacement effects .

These critics argue that , due to the exponential improvements in artificial intelligence ( AI ) and machine learning , computers are increasingly able to perform cognitive tasks — and thus gain the ability to replace high-skilled workers . One study suggests that 47 % of US jobs fall into the high-risk category of being replaced by machines by as early as 2030 .

Oxford Economics modelled a scenario that explores this potential future displacement of labour by robots . Drawing on our recent research into robotisation-trends in the manufacturing and processing sectors , we asked what would happen if the increase in robot density were to be replicated in other sectors , including services .

Crucially , this would require robots to perform advanced cognitive tasks usually associated with the service industry ( e . g ., retail , customer service , healthcare etc .). We applied this assumption regarding the quantitative impacts of increased robot density on employment , wages , and total factor productivity , and ran this through our Global Economic Model .

The outcome of this alternative scenario is a world where more goods and services are produced because of increased productivity , but the returns of higher productivity increasingly accrue to capital instead of labour . Conversely , real wages in the economy decline as labour becomes more substitutable , leading to a declining labour share in income .

Though this scenario is an interesting thought experiment , it is unlikely because it goes against the historical precedent of technology creating more jobs than it destroys . Our baseline projections assume automation will create positive impacts on employment and productivity . Nevertheless , the alternate scenario of a decrease in the labour share of income cannot be discounted entirely given the accelerating pace of technological progress .

To mitigate risks arising from automation and robotisation , workers need to increasingly keep pace with the rapid advancement in technology through education and re-skilling to become complementary to new technology rather than be replaced by it . Policymakers can facilitate this effort through mapping out the existing skill sets at the local level through labour surveys and analyze this data alongside regional business trends .

Moreover , companies need to be incentivised to engage in local programs to retrain workers with relevant skills . Broader macroeconomic policy options can include infrastructural investment , human capital development through STEM education ( Science , Technology , Engineering , Mathematics ) or training initiatives , and welfare programs like universal basic income .

The design and implementation of labour and social policies in the near future will define the impact of robotisation on countries and its people . Robotisation is inevitable . Active government intervention can steer the economy towards more efficiency and equality . However , a laissezfaire approach can lead to a society with skill barriers to labour mobility . CLA