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Don’t kid yourself. Those manufacturing jobs that politicians keep prattling on about are never coming back. Most of them no longer exist.
It might be the worst-kept secret of the New Gilded Age. Robots are replacing humans on factory floors at an unprecedented rate. And the process will only accelerate as new technologies proliferate, like the Internet of Things and Artificial Intelligence.
On the other side of the world you can already see this happening in real time. Motherboard tells the story of MIT-educated Gerald Wong. Currently two-thirds of all manufacturing at his Cambridge Industries Group factory is handled by robots. Wong’s goal is to replace every worker in the 86,000-square foot Shanghai facility.
He told MIT Technology Review, “It is very clear in China: People will either go into automation or they will go out of the manufacturing business.”
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| Robots are replacing humans on factory floors at an unprecedented rate. |
He may be understating his case. In a competitive global marketplace, productivity reigns.
This is something more-developed countries learned two decades ago while investing in automotive manufacturing. South Korea, Germany, Japan and the United States are already well into the deployment of robots. In the boom-bust automotive cycles, they had no choice. To put a number on it all, analysts track industrial robots per 10,000 workers. The numbers range from 478 for South Korea to 164 for the United States.
China is way back at just 36, so it is investing heavily to catch up. MIT Technology Review reports the industrial province of Guangdong will spend $150 billion to help factories install industrial robots. This models similar relationships formed in Germany between the government and industrial manufacturers.
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Now machines are getting smarter, too. The Internet of Things will bring awareness across the network. Artificial Intelligence will infuse robots with the smarts to tackle tasks that occasionally fall outside of the ordinary.
The trend is so important it is even permeating popular discourse. Celebrity investor Mark Cuban addressed an audience this week at the SXSW Conference in Austin Texas.
“Whatever you are studying right now, if you are not getting up to speed on deep learning, neural networks, etc., you lose,” said Cuban, according to Fortune. “We are going through the process where software will automate software, automation will automate automation.”
That’s why all the bluster about bringing back manufacturing jobs is nonsense. Photo ops aside, manufacturing jobs are not set to rise across corporate America. In the global marketplace, it would be competitive suicide.
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Vicious economic cycles and globalization fostered the automation super cycle. The New Gilded Age is an accelerant. It’s easier than ever before to realize an immediate return on investment in new productivity technologies.
Investors should seize the opportunity. Every sector will be touched. These are the stories and stocks I highlight in my Pivotal Point Trader service every week. This is an exciting time to be an investor.
Best wishes,
Jon Markman
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I agree. Artificial intelligence and robotics will certainly displace manual labor. How does one invest in this? America has a big advantage here, as our energy costs are far lower than China. Large factories, regardless of what is in them, still have to be heated and cooled. Our low natural gas cost is a real advantage.
I agree that robots will replace more factory jobs, but who will maintain them?
Also, forget the so-called “Internet of Things” and “Artificial Intelligence”. Both are hype.
Answer: Maintenance Robots will repair & service the production automatons & some automatons will be self servicing & perhaps even reproducing.
At some point even the maintainers of the maintainers and reproduces will need someone to fix them when they break or otherwise don’t work.
When China is looking to replace their ultra cheap labor with robots to save money you know that human beings are in trouble…from self checkouts at the grocery store (which I refuse to use) to soon robots flipping your burgers putting most high school students out of work. Even financial and investment advice is now being done more and more through Artificial inteligence…So even you Jon, might be out of a job sooner than you think, replaced with an algorhythm!…Has anyone thought as to who will be making any money to purchase these items the robots are building as the welfare and unemployement line gets bigger and bigger??..The robots surely aren’t going to be buying anything! I guess the only option for someone is to be a robot repair man or intsaller/programmer etc… but I’m sure they’ll even find a way to get robots to do that eventually… The ultra rich will get richer and the poor will get poorer. Until the poor will have had enough. But then the robot police and riot squads will be sent in to quell the crowds… (sigh!)
Exactly
You are right Wasteland Warrior. If the robot’s do everything who will have the money to buy their product’s ? That is the question these CEO’ are not looking at. Their profit’s will be short term and then they will go down due to a lack of sustainable revenue. I do not see anything exciting about a robot take over and million’s more in deep unemployment poverty. If you make money on your investment’ OK but you will be surrounded by have not’s. The U.S will become full blown third world. If one wolf has a steak and 8 other’s do not, the wolf will become a victim of the have not’s. Human nature survival will rear it’s head.
If robots/AI does the work and a robotic factory makes/repairs the robots at home/work in all fields, who needs money? Everything will be free. That is the endpoint target!
Enjoy living & getting well by the household roboDr. RoboVehicles, Vehicles driving themslves.
Just like computers were supposed to free up time for everyone and we could all make the same salary as before and only work 3 days a week and sit with umbrella drinks on the beach for 4 days of the week??… you mean like that??…RRRIIIGGGHHHTTT!!!
Where were you when Trump and his surrogates were spouting mass amounts of widely publicized, ignorance rich nonsense about this subject?
Robots replacing human beings in the work place but are robots capable of nostalgia? Surely human beings, are above animal life and plant life.
so why have open borders and let more people into the country when we do not have enough work for the people here already displaced by robots ?
So, if jobs are taken over by robots, and people no longer have an income, who is going to buy all the do-dads that are produced?
Quote the Raven: “Investors should seize the opportunity. Every sector will be touched. ”
Rave on Jon… if Every Sector is touched, then don’t worry about being so selective in picking your investments… remember: All boats rise on an incoming tide.
In the coming robot revolution, fewer jobs mean fewer customers… something to consider. When more and more people are replaced by automation,v that will significantly shrink the consumer pool as well…who will buy all the cheap crap being made? Food for thought.
My great grandfather was a buggy whip manufacturer.He had the foresight to tell his son to become a mechanic.My Dad encouraged me to be a TV repairman. I told my son to become a computer programmer. Now my grandson”s job hasn’t been invented yet. Mankind’s knowledge is increasing parabolically so how do we know what the future holds for us
Just re-watched the original Blade Runner movie the other day. The only robot I’m anxiously waiting for them to come up with as soon as possible is a Nexus6 like Rachael and I would sooo get one and marry her immediately !.. Now that would be technology I could get behind!. No arguments, no drama, she would go fishing or Harley riding or hot rodding with you without complaining, laugh at all your jokes, not complain if you stayed out with the boys a few hours later than promised…and no “headaches” ever!..(sigh!)… never mind the factory workers robots are displacing, Me thinks a lot of wives would be “out of a job”,!! ;-)
John,
Automation has a negative effect on Manafacturing jobs but your are wrong about these jobs. They will come back if tax policy and regulations get reduced. Robots have not replaced all of these jobs! They went to China and Mexico for cheap labor as well as currency manipulation to work in these countries favor.
Maybe a future like Star Treks “the Borg”. “Resistance is futile. You will be assimulated’ Cyborgs and robots running the world. Glad I won’t be around for that!