Companies look to onshore production through robotics and AI
A revolution in robotics and AI is expected to streamline many industries from finance to manufacturing, due to its propensity to create cost savings for companies by driving down labour costs and ensuring more consistent product quality levels. Deloitte suggest that using a robot can be up to 90% cheaper than using a full-time offshore employee, even though that person would cost approximately 65% less than a full-time onshore employee, so the cost effectiveness of robots for companies is vast. Merrill Lynch reports that more than 50% of US-based manufacturing executives believe that by adopting robotics their cost effective nature will allow companies to bring production back to American shores, after previously shipping jobs overseas to save on human labour costs. Yesterday we reported that companies such as Adidas and Nike are considering onshoring production, and this trend is likely to continue over the next decade as technology continues to improve.

Rethink Robotics

The robot revolution will completely transform a number of industries by streamlining everything from finance to manufacturing.

It will also significantly drive down labor costs, which means companies that have shipped jobs overseas are increasingly bringing operations back to US soil — with robotics and artificial intelligence taking on tasks previously done by humans.

The potential cost savings for companies are staggering: While a full-time offshore employee costs roughly 65% less than an an onshore full-timer, using a robot could actually be up to 90% cheaper, according to Deloitte.

Robots also don't complain, make careless mistakes, or take any sick days. While that's great for companies, it may not be cause for celebration among workers, as jobs go from outsourced to "bot-sourced."

"The more processes can be automated, the less it makes sense to outsource activities to countries where labor is less expensive," wrote Colin Lewis in Harvard Business Review.

More than half of US-based manufacturing executives want to bring production back to the US, according to a 300-page Merrill Lynch report on robots and artificial intelligence. The reasons, the execs say, mostly boil down to lowering labor costs and improving product quality, both of which can be achieved by adopting robotics.

Foreign companies have quickly adapted to this in recent years. The real hit to labor will be in places like China and India, which account for nearly half of all non-farm jobs in emerging markets created in the past 20 years.

In 2013, Chinese computer maker Lenovo announced the opening of a plant in North Carolina, and Google-owned Motorola Mobility — which moved much of its manufacturing to China in the 1990s — announced a Texas factory would build its Moto X smartphone that same year.

Steve Jurvetson/Wikipedia

The same goes for FoxConn, the Taiwanese manufacturing giant famous for making Apple's iPhone, which said in 2014 it would spend $30 million on a new plant in Pennsylvania.

In the short term, companies moving back to American shores will mean some jobs in manufacturing will return, but over the next decade, a large amount of work that is repetitive and easy-to-automate will likely to be taken over by machines.

Still, it may not be all doom and gloom for the American worker.

"The future of jobs overall isn't nearly as gloomy as many prognosticators believe," analyst J.P. Gownder wrote in a recent AI industry report. "In reality, automation will spur the growth of many new jobs — including some entirely new job categories."