In industry, the number of robots has increased fivefold in the last decade and there will be around 12,000 industrial robots by the end of 2019. Yet productivity improvement in industry is under pressure. After the 2008-2009 recession period, labour productivity growth in industry halved to 3% a year. Robot growth is also stagnating. This is precisely when acceleration of robotisation is needed, as well as smarter application of robots.
This combination contributes to the necessary growth in labour productivity and thus economic growth, concludes the ING Economics Bureau in a publication released today on the occasion of the four IndustrieTOPs and the Dutch Technology Week held this week.
Acceleration of robotisation needed
Doing more with fewer people is a must due to the tight labour market for technical occupations. Moreover, the Netherlands Bureau for Economic Policy Analysis (CPB) previously analysed that for stronger real wage increases, labour productivity per hour worked in particular needs to increase faster. Robotisation contributes to that productivity. In industry, however, the rate of growth in the number of new robots has slowed down recently. "The risk for our country is that too few robots will be added, rather than too many," said Marieke Blom, chief economist ING Netherlands. "After all, slower productivity growth in the Netherlands goes hand in hand with less growth in real wages." After relatively easy-to-robot sectors such as automotive, it is now the turn of other industrial sectors.
Significant regional differences in labour productivity
The development of labour productivity in industry also varies widely by province. In Limburg, Zeeland and South Holland, productivity growth was higher than average in the Netherlands both before and after the recession. In North Brabant, Friesland, Utrecht and North Holland, productivity growth lagged behind. The provinces with the highest labour productivity in manufacturing are Limburg and Zuid-Holland (€125,000 per person employed). Flevoland has by far the lowest labour productivity in this sector: €86,000.
Smart machines also require smart processes
More robots will boost productivity growth. But more is needed. Investments in 'smart processes' are also important. "New production technology will only really pay off if the whole process is in order. For example, with customer-specific production using standard part designs and more digitalisation, as an entrepreneur you shorten lead times. This increases output and productivity and thus keeps you competitive against foreign suppliers. This contributes to margin retention in the longer term," said Gert Jan Braam, industry sector banker at ING.
Copyright: ING Bank, Gert Jan Braam, Sector Banker ING Netherlands
Image: Getty Images
