UK manufacturing’s tepid adoption of robotics is down to misplaced fear and a lack of technological literacy. And it’s holding manufacturers back. Harry Wise reports.
A possibly apocryphal anecdote describes the physicist Michael Faraday explaining his groundbreaking work on electricity to then Chancellor of the Exchequer William Gladstone. ‘But after all, what use is it?’ Gladstone asked. Faraday gave him an explanation.
Gladstone asked again: “What use is it?” Faraday gave him a more complicated explanation. Frustrated, Gladstone asked again: “Yes, but what use is it?”
Faraday eventually broke the impasse with an explanation every politician, especially a Chancellor would understand, “Why, sir, there is every possibility that you will soon be able to tax it.”
Speaking at the LSE recently, author of the book Future Politics Jamie Susskind said the world is too full of Faradays and Gladstones, either scientists who don’t focus on the implications of their work, or leaders who don’t understand technology.
Manufacturers are often like Faraday; they understand technology far more than they understand its consequences. And yet manufacturers are not immune from fear of new technology, and that can have harmful outcomes.
In a speech given at The Manufacturing Leaders’ Summit during Digital Manufacturing Week, Dr Andrew Mint, CEO of PPMA (Processing and Packaging Machinery Association) said companies’ fear of robotics has led to lower productivity, reduced competitiveness, and less safety.
He attributed much of this fear to popular culture and media: “It’s very hard to find in the general press a positive reaction to robots,” he commented. Manufacturing employees regularly read newspaper articles with scare stories such as, ‘Robots will take our jobs’ and ‘Robots will replace us.’
Red top hyperbole usually fails to mention the immense advantages of robotics and AI. An October 2018 briefing note on AI from management consultancy firm McKinsey said that from 2016 to 2030, about 15% of the global workforce (400 million people) could be displaced by automation.
But, it predicts that 555 million to 890 million jobs will be created by AI – that’s 21% to 33% of the global workforce. Looking at the UK, PricewaterhouseCoopers (PwC) estimates about 200,000 extra jobs will be created thanks to AI. Indeed, most studies on AI’s effect on employment say that the job displacement caused by AI will be outweighed by the creation of more jobs.
What about jobs in manufacturing? Will automation lead to fewer people working in manufacturing? Well, that same PwC report predicts about a quarter of all manufacturing jobs (700,000) in the UK will go because of technology.
But that does not mean fewer manufacturing jobs. Cass Business School Professor Feng Li says the idea that automation will inevitably lead to a net loss in manufacturing employment is “too simplistic. It’s not inevitable and could even increase.” But, if jobs are to be maintained, he insists, “we need to support the sector to be globally competitive”.
An industry which has gained jobs despite being highly automated is the automotive sector. Since 2010, UK manufacturing output has increased by 9%, but automotive manufacturing growth has been 60%. In the five years to March 2018, manufacturing jobs increased by 145,000, but more than a third of those came in automotive, including 42,000 car manufacturing jobs.
In fact, according to a forthcoming report from the manufacturers’ organisation EEF, two thirds of manufacturers expect their workforce to increase in the next five years. This, EEF says, “will be primarily driven by the introduction of new products but also the adoption of new technologies and techniques; whilst not exclusively, automation as well as wider 4IR technologies, is likely to be included in this.”
The B Word
Despite this optimism, job gains in manufacturing are by no means guaranteed, and with Brexit looming, a bad deal will have serious ramifications for UK manufacturing. In the short to-medium term at least, the problems of a no-deal Brexit or hard Brexit are potentially far worse than problems caused by AI and automation.
Dr Andrew Mint says the threat of tariffs and even higher labour shortages make it an “excellent time to invest in robotics and automation.” Japan is a case in point. It has the fourth highest robot density in the world (303 robots per 10,000 workers). Manufacturers there use robots extensively to make up for a labour shortage that’s caused by an ageing population, one of the world’s lowest fertility rates and a restrictive immigration policy. The IMF says this has meant higher productivity, wages and employment.
Plans for greater robot adoption in UK are afoot. A survey in June by Sheffield Hallam University found that 59% of UK manufacturers intend to invest in smart technology like AI, automation and robotics to support growth plans post-Brexit. Many also plan to spend money on new software and connected app-based technologies that enable organisations to better utilise big data.
So, just as manufacturers cannot afford to be complacent about Brexit, they can’t rest on their laurels over AI and robotics.
What about the people who lose their jobs because of automation? McKinsey says the people who will benefit from the AI revolution are those whose jobs require higher cognitive skills that value creativity and critical thinking. In contrast, people whose jobs involve repetitive, predictable tasks will likely lose their jobs.
Retraining that second cohort to work in the new jobs will cost money and require extensive planning. Not all manufacturers can afford to support retraining though, so government assistance for retraining is vital.
A House of Lords report, AI in the UK: ready, willing and able?, published in March 2018 welcomed the government’s announcement in its 2017 budget of a National Retraining Scheme, a programme bringing together government, business and unions to retrain workers.
It called for industry to assist in the financing of the National Retraining Scheme by matching government funding: “This partnership would help improve the number of people who can access the scheme and better identify the skills required.”
Retraining will not be a one off: “Technology is racing ahead of the skills people have,” notes Andreas Schleicher, OECD’s director for education and skills. So training will not just happen once or twice, but become a lifelong process.
Just as important is training within schools. EEF says schools are not preparing students for AI: “To date, there has been limited cooperation between the education sectors and the advancements in technology within the manufacturing industry. The education curriculum remains outdated and does not reflect the technological transformation that will change the skills needed in the world of work.”
They recommend more work opportunities for under-16s, and more practical and technical work in schools as ways to encourage more students to pursue careers in manufacturing. They say the curriculum needs to adapt to not only teach students digital skills but also skills such as computing, creative thinking and critical thinking, the same skills McKinsey say will become more valued.
Henry Ford once said that if he asked people what they wanted, they would have said faster horses. He meant that people’s imagination is limited by their technological illiteracy. Manufacturers often think in terms of faster horses. And when they think too much like that, they are far more likely to fall behind in development and productivity. Fear of robots and artificial intelligence must be overcome if the sector is to survive, let alone flourish.
Take Cornwall manufacturer CHX Products. They make products like fridge magnets and pencil toppers. CEO Andy Knight thought robotics sounded too good to be true. “I remember thinking at the time that it all seemed too easy,” he explains. “I asked myself, if it seems easy is it going to work? That’s just a lack of experience, not knowing how clever these bits of kit are.”
CHX had to cut costs and lead times. They bought two robots to use in quickening the printing process. The initial costs of buying the robots were high, but their investment paid off. Productivity dramatically improved and 33,000 pieces are made by the firm every day. Andrew Knight says production costs in Cornwall are as cheap as China. There are other advantages, he notes.
“It took away the pretty tedious jobs like printing things by hand. Now what we do is manage machines and manage the processes. So, it’s a lot more interesting for the people that work within the factory.” Added to that, waste has been virtually eliminated. The robot-intensive automotive sector outstrips the rest of UK manufacturing in productivity.
Where would CHX Products be without investment in robotics? Andy Knight believes his firm would be really struggling, because labour and raw material costs have increased so much. Instead, the Bodmin company is growing 25% year-on-year.
The example shown by CHX demonstrates that when fears of AI and robotics are conquered, and manufacturers do not remain complacent, immense benefits can result.
They show that the future of manufacturing belongs to the people who best understand technology.
Originally published in the Dec 2018/Jan 2019 issue of The Manufacturer.