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Wednesday, June 23, 2021

Wharton says Robots are Coming, but Just for Your Management

Robots are Coming, is Your Firm ready?

Wharton’s Lynn Wu talks about her research on how automation is reshaping the workplace in unexpected ways.

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If you’re worried that robots are coming for your job, you can relax — unless you’re a manager.

A new survey-based study explains how automation is reshaping the workplace in unexpected ways. Robots can improve efficiency and quality, reduce costs, and even help create more jobs for their human counterparts. But more robots can also reduce the need for managers.

The study is titled “The Robot Revolution: Managerial and Employment Consequences for Firms.”   The co-authors are Lynn Wu, professor of operations, information and decisions at Wharton; Bryan Hong, professor of entrepreneurship and management at the University of Missouri Kansas City’s Bloch School of Management; and Jay Dixon, an economist with Statistics Canada. The researchers said the study, which analyzed five years’ worth of data on businesses in the Canadian economy, is the most comprehensive of its kind on how automation affects employment, labor, strategic priorities, and other aspects of the workplace.

Wu recently spoke with Knowledge@Wharton about the paper and its implications for firms. (Listen to her full interview in the podcast at the top of this page.)

More Robots, More Workers

Contrary to popular belief, robots are not replacing workers. While there is some shedding of employees when firms adopt robots, the data show that increased automation leads to more hiring overall. That’s because robot-adopting firms become so much more productive that they need more people to meet the increased demand in production, Wu explained.

“Any employment loss in our data we found came from the non-adopting firms,” she said. “These firms became less productive, relative to the adopters. They lost their competitive advantage and, as a result, they had to lay off workers.”  ... '

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