Robotics – The Next Revolution

Robots are nothing new. They have been part of our society for many decades already, starting from science fiction books and then becoming real in many areas such as the automobile, military, space exploration and others (although not exactly like as described en most books). But these are large, expensive robots, never becoming commonplace in all industries. Things are changing. Anyone (well, almost anyone) can now buy a $200 robot to sweep and clean the floor. And they are getting so that Chinese and Indian labor has become more expensive than buying a robot! And robots are also willing to do menial and repetitive jobs that people are not willing to do anymore. No matter how much they are paid,

This is going to change the world as much as the industrial revolution, and it is important to understand how this will affect us. These are my thoughts on the subject.

With robots replacing many humans workers, there will be a lot of unemployment. And unemployment is good for social unrest. This is already happening in the middle east (not because of robots, but yes because of high unemployment, specially in the younger generations). And it may spread to other areas; I specifically think of China, India, Mexico, Malaysia, and other countries which have had impressive growth in the last decade or two because of their low-cost labor. With robot labor, the cost of labor will be the same everywhere more or less. So these countries will see reduced to stopped growth in the far future, raising unemployment and unrest. I wouldn’t bet on them.

And what happens when worldwide labor becomes cheap? The next in line factors affecting production will rule where and who will produce things: raw materials (both price and availability) and energy costs. I became aware of this on my latest trip to Iceland, where energy is basically free. I was told that the third largest industry of Iceland is aluminum. What? well, it seems that the aluminum industry requires a lot of energy, so even if you have to transport all the raw materials to the end of the world (that is basically where Iceland is located), and then send the finished product back to all parts of the world, if you have almost no energy costs, you will do it.

So in the mid to long term, we will be seeing a reduction in the power of cheap-labor countries and a rise of the raw-materials producers and cheap energy countries. And I am starting to put my bets on them.

But as a wise man once said, “it is very difficult to make predictions, especially about the future

 

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