Obama to leave the future of the US in the hands of robots

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President Barack Obama says robots can help the US grow its economy by leading to higher total factor productivity (TFP) in the future. 

The president made his remarks in his annual economic report to the Houses of Congress. Extracts from President Obama’s report:

“One area of innovation that can help the United States to boost TFP growth in the future is robotics. 

“The use of industrial robots can be thought of as a specific form of automation. As a characteristic of innovation for centuries, automation enhances production processes from flour to textiles to virtually every product in the market. Automation, including through the use of information technology, is widely believed to foster increased productivity growth.

“In many cases, mostly for higher-skilled work, automation has resulted in substantial increases in living standards and leisure time. The International Organization for Standardization (ISO) defines a robot to be an “actuated mechanism programmable in two or more axes with a degree of autonomy, moving within its environment, to perform intended tasks.”

“This degree of autonomy makes robotic automation somewhat different from historical examples of automation, such as the replacement of weavers with looms. Some of these machines can operate for extended periods of time without human control, presaging the rise of a potentially paradigm-shifting innovation in the productivity process.

“Robots, like other types of automation, can be either complements to, or substitutes for, conventional labor. For example, at many of the country’s biggest container shipping ports—the primary gateways to and from the United States for waterborne international shipments—automation has replaced longshoremen in a variety of activities, from computerized cargo management platforms that allow for visualization of the loading of a container ship in real time to software that allows for end-to-end management of individual containers throughout the unloading process.

“By contrast, there are a number of ‘smart warehouse’ applications that involve varying amounts of automation to complement the work done by warehouse fulfillment workers. Examples include LED lights on shelves that light up when a worker reaches the appropriate location and mobile robots that bring inventory from the floor to a central place for packaging.

“The latter example realigns employees away from product-retrieval tasks and focuses them instead on the inventory-sorting phase of the process, for which humans have a comparative advantage over machinery.

“Robotics have also played an important role in growth over the last two decades. A recent study estimates that robotics added an average of 0.37 percentage point to a country’s annual GDP growth between 1993 and 2007, accounting for about one-tenth of GDP growth during this time period.

“This same study also estimates that robotics added 0.36 percentage point to labor productivity growth, accounting for about 16 percent of labor productivity growth during this time period. This effect is of similar magnitude to the impact that the advent of steam engines had on labor productivity growth.”

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