Robotics in Manufacturing: Efficiency vs. Job Displacement

Globally, factories installed approximately 4.3 million robot units in 2023, showcasing manufacturers’ interest in enhancing operational efficiency without sacrificing cost-effectiveness, according to a World Robotics 2024 report. While this shift boosts productivity, it is simultaneously displacing low-skill jobs, increasing pressure on workers to upskill. 

For the third consecutive year, global factory robot installations surpassed half a million, of which Asia accounted for 70% of new deployments, followed by Europe at 17%, and the Americas at 10%, the report details. “The new World Robotics statistics show an all-time high in the number of industrial robots automating production around the world,” says Marina Bill, President of the International Federation of Robotics. “The annual installation figure of 541,302 units in 2023 is the second highest in history. It is only 2% lower than the record of 552,946 units installed in 2022.”

In China, robot installations have grown 13-fold over the past decade, though the country experienced a 5% decline in 2023. Despite this, China still accounted for over half of the world's new industrial robots, reflecting the profound influence of technological advancements on global manufacturing, and the pressing need for workers to adapt to an increasingly automated environment.

"Even countries with large labor pools are turning to robots," said Bill. According to Universal Robots, robots are primarily used to perform repetitive tasks and streamline assembly workflows. Key applications include welding, assembly, shipping, raw material handling, and product packing. As a result, manufacturers are increasingly adopting robotic automation to enhance efficiency across various processes.

However, this trend poses challenges for low-skill laborers. A study titled “The Impact of Industrial Robots on the Skill-Based Wage Gap” highlights the "substitution effect," where robots replace workers performing routine tasks. This displacement reduces job opportunities for low-skilled workers, further tightening the labor market in these positions.

In Mexico, the manufacturing sector contributed US$365.56 billion to the country’s Gross Domestic Product, according to government data. As the sector continues to grow due to nearshoring Statista projects a compound annual growth rate (CAGR) of 1.27% from 2024 to 2029. To sustain this momentum, Rockwell Automation highlights that Mexican manufacturers are increasingly turning to automation and robotics to boost efficiency and to remain competitive in both domestic and global markets. That said it raises the threat to low-skilled jobs. 

Data from the Mexican government reveals that in the same quarter of 2024, 21.6 million individuals were employed within the sector, with many working in roles like industrial machinery operators, assemblers, and transport drivers. As the industry leans further into robotic solutions, Disprz highlights the need for companies to invest in workforce development by providing diverse learning modules to help workers adapt to evolving industry trends and to maintain success.