Economist Conference, 9 March 2018, Athens
Ladies
and gentlemen,
Thank
you for inviting me to this event. My introductory comment in this discussion
aims to explain why in the Greek case having robots deployed in the Greek
industries can be only positive for the current and the future labour market.
God created mankind in his own image; and male and
female he created them. And the mankind, after many-many centuries, created the
industrial revolutions, the 1st, the 2nd, the 3rd, the 4th, which is well
underway.
The
industrial and revolutionary Man created robots. As part of the 4th industrial
revolution there is rapidly growing adoption of robots, mainly of industrial
robots, in the last few years. This is reshaping the international division of labour
and the world of work.
Robots
are the epitome of new technology, of continued technological advancements in
automation systems and artificial intelligence. They drive into
a fundamental transition.
What stance should we adopt in front of the resulting,
and largely unforeseen, challenges?
To answer this, I do not have but to quote the current
Prime Minister of Sweden and co - chair of ILO Global Commission on the Future
of Work, who quoted a friend of him – a former governor of Gothenburg, Social
Democrat and union leader
– Göran Johansson:
“On a visit to a new industrial plant, he was asked what
he thought when looking out over the high-tech industrial robots on the factory
floor. He said: “I don’t fear new
technology. What I fear is the old one.”
But we are not in Sweden. We are in Greece. If we had more time we could theorise,
speculate, discuss and revive the old and revolving debates about deskilling,
the degradation of work, reskilling, etc.
Unfortunately this is a luxury now for us in Greece.
To put it roughly:
Our challenges, for the current and future labour markets, are not
related to the adoption of robots. On the contrary, are linked with not having
enough automation systems, digitalization and industrial robots deployed by
industries in Greece.
The challenge is how we can exploit the potential of
new technology and robots to bring about large productivity gains and make the
new labour market as inclusive as possible.
The automation of production is accelerating around
the world: 74 robot units per 10,000 employees is the new average of global
robot density in the manufacturing industries (2015: 66 units). By regions, the average robot density
in Europe is 99 units, in the Americas 84 and in Asia 63 units.
(see slide 1)
There are 2 million industrial robots today and there
will be another 1.3 million by 2020. Robot teams and mind controlled robots are
underway for the factories of the near future.
But the statistics for Greece are alarming.
(see slide 2)
With 17 robot units per 10,000 employees Greece is far
away from the global average (74), the European average (99), and many other small
open economies of the EU and the Eurozone (Sweden 223, Slovenia 137,
Slovakia 135, Czech Republic 101, Portugal 58).
There is probably a composition effect for this.
Industrial robots are mostly (2/3) used in the
automotive and the electronics industries, which have a very weak presence in
Greek manufacturing.
And this is exactly the real challenge for Greece. Its
weak manufacturing sector, the critical need to expand it, together with the
ICT sector and the other tradable sectors and services. To make possible to
keep the country in the club of the developed economies and the hierarchy of
the global division of labour.
We first have to drive Greece in an economic growth
path, by strengthening its very weak tradable sector. This is critical.
The tradable sector share of 18,7%, and in this the
manufacturing share of 7,2%-7,6%, in the GDP, indicate a fundamental asymmetry.
(see slide 3) Shares
of Tradable sector (T) and Manufacturing Industries (M) in Greek GDP 1995-2016
In light of the division of economic activities in
“internationally tradable” (T) and
“internationally non-tradable” (N) goods and services, the, decade long now, crisis
of the Greek economy could be interpreted as the result of the asymmetrical growth of the two sectors in a
currency regime of fixed exchange rates and a concurrent situation of
continuous excessive demand financed by public sector deficits, and excessive
public and private debt.
Keeping up with the continued technological
advancements in automation systems and industrial robots should be considered a
prerequisite for strengthening the very weak tradable sector in Greece.
When thinking about the future of work in Greece we
should approach the ever-ongoing evolution of technology, as a prerequisite for
bringing about much needed productivity gains and create new jobs, with
positive spillovers in the economy, labour market and society.
In parallel we need a regulatory framework for the
labour market, which at this stage should be flexible and efficient, conducive
to the transfer of resources, including labour, towards the tradable sector.
This requires considerable investments in terms of
training and skills upgrading to smooth the transition. Not only for
manufacturing. Also for ICT industries and services, and the other segments of
the tradable sectors in Greece.
It also requires planning how fairly gains from this
growth will be distributed.
To sum up. We should not fear the new technology, we
should not fear having robots and industrial robots.
We should mainly care about the lack of them from the
tradable sectors of the Greek economy, the weak tradable sectors, the low
digitalization.
All these limit the productive transformation of the
Greek economy and preserve dire
conditions in the Greek labour market.
