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When I saw the equation for labor factor of

LaborSupply x LaborProductivity / CostOfCoal

I couldn't help but think of modern robotics and industrial automation as

LaborSupply x LaborProductivity / CostOfSoftware

Given the extreme cost of software development, and the diminishing cost of labor due to globalization - it's no wonder we don't have robots everywhere. It will be curious if the current wage spike leads to increased automation.



It’s happening already. Industrial wages in China have been ramping up significantly for over a decade as the rural labour pool gets tapped out, manufacturers climb the value chain, and the work force up-skills. This is why a lot of low value add manufacturing is moving to Vietnam.

As a result Chinese manufacturers are investing heavily in robots. This isn’t really to replace workers though, as such, it’s that at the macro level they’re running low on workers willing to do those tasks. And before someone says “all they need up do is pay more for them to do it”, that’s missing the point. A lot of people in China have higher aspirations now. Fewer and fewer of them want to be clicking together bits on a production line any more, no matter how well it pays. They increasingly have the skills for higher value work, and want to use them.


Robots do not save money. They may optimise some other part of the value chain which could increase profits, but robots are a more expensive workforce than humans.


It depends on the values in the above equation. If the labor cost of reconfiguring injection molding machines rises above 3d printers, then companies will use 3d printers. If the labor cost of having someone click parts together goes to high relative to the cost of building a robot for the same task, then a robot will be developed for the task.


You are assuming that there's no labour required to care for the robots, when in practise, the labour it takes to care for robots and adapt processes around them is often more expensive than that to do the job to begin with.




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