Fact of the Week: Spanish Manufacturing Firms Increased Their Overall Employment by 10 Percent After Adopting Robots

Spanish manufacturing firms increased their overall employment by 10 percent in the 4 years after adopting robots.

Source: Michael Koch, Ilya Manuylov and Marcel Smolka, “Robots and Firms,” April 7, 2019, Economics Working Paper 2019-5, Aarhus University.

Commentary: While it may be tempting to focus on the direct job losses caused by robot adoption, it is wrong to conclude that automation constitutes a generalized threat to workers, either in manufacturing or in the broader economy. By choosing to automate, firms can increase their productivity, which allows them to expand and increase their employment. A new study of Spanish manufacturing firms’ performance from 1990 to 2016 supports this, finding that in the four years after adopting robots, firms saw their productivity increase by 20 to 25 percent, and they raised their overall employment by 10 percent compared to firms that didn’t automate.