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How will South Korea’s robot revolution affect American jobs?

October 22, 2016 at 4:09 PM EDT
South Korea is among the countries working to increase automation in the manufacturing sector, with some large companies seeing robots as a cost-effective way to replace expensive human labor. But how will the expansion of this technology affect American workers? NewsHour Weekend Special Correspondent Karla Murthy reports.
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By Mori Rothman and Karla Murthy

KARLA MURTHY: Hyundai means “modernity,” and it’s is a big name in the South Korean economic landscape – and not only for cars.

Headquartered in the industrialized port city of Ulsan, Hyundai Heavy Industries, or HHI, is the world’s largest shipbuilder. It produces engines and construction equipment.

HHI is also a leader in making industrial robots.

Hyun-kyu Lim is a head researcher at HHI’s robot research institute. This is where they test robots used to assemble cars. He showed me an example of what robot technology looked like ten years ago:

HYUN-KYU LIM: It shakes a lot.

KARLA MURTHY: That shake when the robot stops slowed down productivity and accuracy.

HYUN-KYU LIM: Now I’ll switch to the robot controller that is used these days. There’s no vibration.

KARLA MURTHY: Lim says today’s robots are much more precise and 40 percent faster. He says spot welding, which is a common process in car factories, takes just under one second with a robot.

HYUN-KYU LIM: If human do that, it’s impossible.

KARLA MURTHY: Lim says that improved speed has resulted in HHI selling ten times more robots than it did when Lim began working here in 2000.

TEAM LEADER: So in the future, there are only robots in the factory. And there’s no, nothing.

KARLA MURTHY: Industrial robots have been working in manufacturing since the 1960s, when the first robot joined the assembly line at general motors plant. But in recent years, there’s been a dramatic rise in their use. Along with new technological advances, robots have also been getting cheaper.

According to the international federation of robotics, sales of industrial robots globally went up 59% between 2010 and 2015.

Dae-Young Kim is Vice President of HHI’s research center. He says the company has integrated four robot systems into its shipbuilding process… like this one that grinds an oil groove inside engine cylinders, a task once done manually.

DAE-YOUNG KIM: We improved the productivity about 170 percent.

KARLA MURTHY: Wow.

In manufacturing, South Korea has the highest ratio of robots to workers in the world.  But as robots become faster and more cost effective, Kim says, HHI will need to reduce its low skilled jobs in order to remain competitive.

DAE-YOUNG KIM: If want to survive in the shipbuilding industry, I think our competitor is China, India, Vietnam, where there is low labor cost. I believe we should decrease labor costs about 20% lower.

ERIK BRYNJOLFSSON: A lot of East Asian countries, I think, are in bullseye of automation.

KARLA MURTHY: Erik Brynjolfsson is a professor at the Massachusetts Institute of Technology and director of MIT’s initiative on the digital economy.

ERIK BRYNJOLFSSON: If you go to a place like China or Vietnam, you see factories where there are thousands of people working side by side doing very routine work, very simple simple tasks. Those are exactly the kinds of tasks that robots can do  well. So the ones that are being invented in South Korea and around the world, those machines are getting cheaper and cheaper and more and more capable and increasingly are going to replace the kind of human labor that has been powering the Chinese industrial revival.

KARLA MURTHY: This year in china, Foxconn, a manufacturer that assembles Apple iPhones and other electronics, replaced 60,000 factory workers with robots.

In the US, Amazon bought the robotics company Kiva for 775 million dollars in 2012, and now has over 30,000 robots working in its fulfillment warehouses around the world.

To sharpen South Korea’s competitive edge, the government and Hyundai motor group are investing 76 million dollars to build a smart factory complex – to digitize the manufacturing process, from design to distribution.  Samsung is also partnering with the government to build 600 smart factories across the country.

JONGHOON KIM: There is a worry among the workers that automated machines will eventually replace them, and take their jobs.

The constituents of National Assemblyman Jonghoon Kim live and work in Ulsan, where HHI is based.

JONGHOON KIM: If we only take the interest of companies into consideration, the life of the workers will decrease. This action will make the workers concerned for their future, and their job security. This can develop into many different social problems.

KARLA MURTHY: Has there been any initiative yet to figure out what to do with the workers that could potentially lose their jobs?

JONGHOON KIM: There have not been any specific plans made to address this issue, in order to achieve a bright future, the government, the company, and the workers must all work and deliberate together.

But with no one adequately addressing this issue, Assemblyman Kim fears more workers displaced by robots are bound to find themselves unable to support themselves and their families in the future.

Americans could also face similar problems. A report this year by the consulting firm McKinsey and Company, found that 59 percent of manufacturing work could be automated in the next decade, including 90% of what welders, cutters and solderers do.

And that’s not all… 73 percent of food service work could be automated, 53% of retail work and 43% of finance and insurance work.

ERIK BRYNJOLFSSON: To me, this is the defining issue of the next decade. It’s the most important single thing that our country can focus on, is how we can use this amazing, powerful technologies to transform the economy for good and to create shared prosperity.

KARLA MURTHY: Brynjolfsson says almost every profession will be affected by automation. He says, the u-s is on the precipice of what he and the co-author of his last book call “the second machine age.”

ERIK BRYNJOLFSSON: We think this is a transformation on the scale and scope of the first industrial revolution. It’s probably going to play out over a period of decades, and we’re still in the early stages of it But as it plays out, we’re gonna see vastly more wealth but also vast social disruption.

KARLA MURTHY: So how can we as a society prepare for this massive transformation?

ERIK BRYNJOLFSSON: The first step is to recognize the scope of this disruption that’s coming towards us and just acknowledge it. In the first machine age and industrial revolution, pollution went up. We had problems like child labor. But as a society we responded. We invented mass public education. And that was a radical notion that the government would pay for that. We changed the way we did tax policy. We invented the Social Security system. Later we provided Medicare and Medicaid. All of these changes helped cushion some of the blows of the Industrial Revolution and helped create a more healthy and educated work force than we had.

KARLA MURTHY: And that’s what we need to do now?

ERIK BRYNJOLFSSON: Well, going forward we need to have similarly big changes. Now, we can’t just double down on the same thing we did before. It means inventing social programs for the 21st Century and new tax policy. But in terms of the scale and scope of the changes, yes, I would say they’re at least as big as what we did in the first Industrial Revolution.

Brynjolfsson recommends government policies that encourage more entrepreneurship by taking away barriers that make it hard to start new businesses and reward companies through tax incentives to create more jobs for people, not robots.

KARLA MURTHY: But how realistic is it to enact some of these policies?

ERIK BRYNJOLFSSON: These policies are absolutely– necessary, and I think it’s very realistic to put them in place. Economists, policy makers, managers, entrepreneurs, we need to do our part to reinvent the economy. If we don’t do it right a lot of people are going to be left behind.

KARLA MURTHY: In South Korea – the robots of Hyundai Heavy Industries are now making their way into the medical field, from helping nurses move patients, to assisting doctors with surgeries.

This rehabilitation robot reduces the number of physical therapists needed to help a patient walk.

And facing increasing global competition in their biggest industry shipbuilding, Dae Young Kim says their next generation of robots will be more human like – by using artificial intelligence to learn on the job.

KARLA MURTHY: How long do you think would develop something like that?

DAE-YOUNG KIM: Maybe before 2020.  To survive in this very powerful shipbuilding industry. I think.

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