Automation and Job Growth in Germany: A Symbiotic Relationship

‍Does Automation Truly Lead to Unemployment? Exploring the Hard Facts.

Industrial Automation and Job Growth in Germany: A Symbiotic Relationship

The rise of robots, the Fourth Industrial Revolution, AI—these terms spell unfounded apocalyptic fears and apprehension, especially when linked to the job market. The common concern? "Robots are going to take our jobs!" It's a sentiment echoed by many, even leading to discussions of implementing an "AI Tax" in Germany. But what if this fear is misplaced?

Let's delve into the history and data to dispel this myth.

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More robots means more jobs!‍

Germany stands as a perfect example of how the integration of robots into the manufacturing industry has not only created more jobs but also grew this industry.

The statistics are clear. Germany saw a 6% increase in the use of industrial robots in 2021 alone, reaching a total of 245,908 units. It's a European leader in this field, accounting for 36% of the total European stock, according to the International Federation of Robotics (IFR). The IFR also stated that 2021 was the second-best sales result for robot manufacturers in Germany, only surpassed by 2018.

The automobile industry, traditionally the largest buyer, accounted for 38% of installed units in 2021. Other industries, such as the metalworking industry, installed 3,376 units in the same period, an increase of 33%, demonstrating a widespread embrace of automation across different sectors.

From 2011 to 2019, Germany has seen a steady increase in the use of robots in its economy, adding over 60.000 units to the industry. However, job offers didn’t decrease, on the contrary, over 500.000 jobs were added to the industrial marketplace within this 8 year period. The robots have arrived, and yet no jobs were impacted. The contrary occurred, but why?

Here we can observe that both the number of robots and the number of employed workers have been increasing over the years. This suggests that the increase in robots did not lead to a decrease in employment during this period. Sources: World Robotics and Statista

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More robots in Germany's industrial landscape translate into lower unit costs, allowing companies to be more competitive on the global stage. With reduced costs, efficiency is bolstered, as robots—faster, more accurate, and tireless—take on repetitive tasks, freeing human workers for more complex roles. This trend of enhanced efficiency, fueled by automation, catapults German products onto the world stage, leading to more sales and business growth. 

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Profits are reinvested in research and development, spurring innovation, new products, and technological advancement. As businesses expand with growth in R&D, they require more human minds to manage, innovate, and lead, creating more jobs. Far from being a threat, robots and AI in the manufacturing industry are generating more opportunities, proving that automation and human ingenuity can coexist and thrive.

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AI, history and the future of manufacturing

When industrial robots were first introduced, there was a widespread fear: "They're going to kill all our jobs!" This prediction, however, failed to materialize. Rather than erasing jobs, automation, including the rise of low-cost robots, has driven growth in Germany's manufacturing sector, employing around 5.46 million people in 2021. These robots have empowered German SMEs to remain competitive, not diminish the job market.
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This historical lesson provides a lens through which to view AI. Far from a threat, AI is proving to be another significant opportunity to the industry. It allows individuals to  reshape and enhances the work experience. In a continuous evolution, both robots and AI-driven solutions are not only boosting global competitiveness and reducing costs, but also diversifying job opportunities, enhancing skills, and fortifying the industrial landscape. The historical evidence of robotics supports the idea that embracing AI will have similar positive effects.

The landscape of innovation has dramatically transformed since the 1970s. What sets the present apart from that era is the sheer velocity of technological advancements. Today, the pace at which innovation unfolds is unparalleled, and Europe, including Germany, no longer holds a monopoly on leading this rapid development. In the past, taking a backseat in the race of progress might have been acceptable, as other regions slowly carved out their own success narratives. However, in today's accelerated world of innovation, even a momentary lapse can mean falling irretrievably behind. The stakes are high, and the risks of not keeping pace are even higher. As the world gallops ahead, it is imperative for nations to remain at the forefront of technological evolution, ensuring that they are not left in the dust of rapid progress. We must be proactive in our endeavors, ensuring we don't just keep pace with innovation but lead it.

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If AI creates jobs, why over-tax it? 

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The connection between automation and job growth is not coincidental; it's linear. More robots have consistently meant more jobs in Germany’s manufacturing industry. Automation doesn't kill jobs; it drives them.

The proposal of an "AI Tax" in Germany and other countries must be viewed in this context. Taxing AI will hinder this continuous growth cycle, giving a competitive edge to large and stable technology corporations, while punishing young, innovative yet underfunded start-ups. What's needed is support, innovation, and a clear understanding of how AI and humans can work together for a prosperous future.

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Let's learn from history. More robots, more AI, means more jobs. It's time to embrace the future, not fear it!