UW-Extension report: Foxconn jobs not at high risk of automation

Manufacturing & Logistics

Source: Technological Forecasting & Social Change journal; UW-Extension

Last updated on July 2nd, 2019 at 09:12 pm

State Sen. Dave Hansen painted a bleak picture as he discussed the potential automation of manufacturing jobs in Wisconsin. He pointed to news reports about Foxconn Technology Group eliminating 60,000 jobs at its Chinese factories by using robots and described a progression toward dark factories as robots took over all the jobs.

“That is the future of manufacturing in Wisconsin and the United States and it’s going to be the future of Foxconn right here in Wisconsin,” said Hansen (D-Green Bay) during debate on legislation setting up $3 billion in incentives for Foxconn to build its LCD plant in Wisconsin.

Sen. Leah Vukmir (R-Wauwatosa) spoke after Hansen, making the case Foxconn would be transformational for the state and having an entirely robotic workforce was “pure hyperbole.”

“While it is true that automation is new technology, it is the state-of-the-art,” Vukmir said. “We are progressing to automation.”

Source: Technological Forecasting & Social Change journal; UW-Extension

She went on to say automation would require people to control it and the state’s universities could participate in building the required skilled workforce.

“Does it just happen like that … we’ve got automation?” Vukmir asked, snapping her fingers. “Come on guys, you don’t get it.”

The potential automation of the 13,000 jobs Foxconn plans to create in Wisconsin came up multiple times as lawmakers considered the bill. At a public hearing in Sturtevant, Department of Administration secretary Scott Neitzel said the plant would be built as automated as it could be and as a result, wouldn’t be as susceptible to automation.

That explanation would protect the Foxconn jobs in the short-term, but what about beyond the term of the contract the company signs with the Wisconsin Economic Development Corp.? Automation and computer technology continues to race ahead year after year. In a paper published earlier this year, Oxford University researchers Carl Frey and Michael Osborne estimated 47 percent of U.S. jobs are at high risk for automation.

Matt Kures, a community development specialist at the University of Wisconsin-Extension Center for Community and Economic Development, tried to estimate the chances of Foxconn’s jobs being automated using Frey and Osborne’s methods and data for the semiconductor and other electronic component manufacturing industry, which includes making LCD panels.

Compared to manufacturing as a whole, Kures found the industry has a “disproportionately high share” of engineering occupations and a larger share of the jobs require at least an associate’s degree. Those factors are generally tied to jobs being less susceptible to automation.

Kures’ research, published in a UW-Extension report, found the semiconductor and component industry generally had a lower proportion of jobs at high risk for automation. More than 48 percent of jobs in the industry had what Frey and Osborne termed a high risk of automation, but the manufacturing sector was even higher, at 57 percent.

Kures pointed out it is difficult to forecast which jobs are more susceptible to automation because it depends on a number of factors including “labor availability, capital and labor costs, technological advances, regulatory issues and the desires of ownership.”

While the Foxconn jobs may be less susceptible to automation compared to manufacturing overall, they also face about the same risk as the rest of U.S. employment.

Their research concluded most workers in transportation and logistics, office and administrative support, and production were at risk for automation as human advantages in mobility and dexterity diminished. They predicted low-skill, low-wage workers would need to move to jobs requiring more creative and social intelligence.

“For workers to win the race, however, they will have to acquire creative and social skills,” Frey and Osborne wrote.

Researchers at Ball State University sought to build on Frey and Osborne’s work by using the data to determine which U.S. counties faced the greatest risk of jobs being automated. In some counties, they found two-thirds of jobs faced a relatively high risk of automation.

Wisconsin was slightly above the national average, with 58.1 percent of jobs at high risk. The most at-risk counties were concentrated in the central and northern parts of the state. The southeastern region was generally below the average, with the exception of Sheboygan and Walworth counties.

Of course, the potential for jobs being automated has long been a discussion and the rise of big data and the Internet of Things has only increased the discussion.

“The vision has been there for a while and here we are 30 years later and we still have a long way to go,” said Tom O’Reilly, vice president of global business development at Rockwell Automation Inc., during a discussion on big data at gener8tor’s recent OnRamp Manufacturing Conference in Milwaukee.

There have been signs, however, that the level of automation is ramping up. North American orders for robots set a record last year, increasing 10 percent to more than 34,600, according to the Robotic Industries Association.

“For me, I think the big window is going to be 2020 to 2025,” said Craig Dickman, chief executive officer of Green Bay-based Breakthrough Fuel LLC, during the OnRamp discussion. “I think when it accelerates, it’s going to come really fast.”

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Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He also spent five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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