Great Graphic: Robot Penetration

This Great Graphic was posted by Sam Ro on Business Insider.  He got it from Credit Suisse Research. 

Even though the charts focus on robots, the first thing that jumps out is that huge productivity difference between US and Chinese manufacturing workers.   

China has seven times the number of workers and the dollar value of their output is about $100 bln less.  The dollar value of US output per employee is 7.5 times greater for the American worker than the Chinese.  

One of the reasons US productivity is higher is that American workers have capital at their disposal.  The capital here is not finance capital, but capital equipment.  There is 18.5 times more robots per American worker than the Chinese worker.  

The lower chart shows the robot penetration or density for a selected number of countries. Japan leads the pack.  Japan has a population and a shrinking work force.  That would seem to put more pressure on increasing productivity to sustain standards of living.  

We had previously discussed Japan's robot employment as a way to overcome the demographic shock (see this earlier post about and video clip about Germinoid F, a fembot in Japan).   However, we concluded that bolstering women participation in the work force may have even farther reaching positive implications. 

The BRICs are laggards.  To dismiss this because they are emerging markets fails to appreciate the robot penetration of Korea, second behind Japan, and Taiwan, where robots have a greater presence than in France, Switzerland and the UK.   It might have to do with industrial focus.

China's auto industry is leading the employment of robots, followed by consumer electronics, food and beverage processing, plastics and textiles.  A Bloomberg report last month noted that the average price of a factory floor robot in the auto industry costs about $50k before installation.  

Great Wall Motor Co reportedly spent $161 mln on 1,200 robots.  This allowed to downside its workforce by 900 welders.  The savings in wages will, the company projects, pay for the robots within three years. 

While the fact that Japan has a shrinking working force seems generally appreciated, fewer seem to appreciate that China's work force is expected to peak in 2013 before beginning a long-term decline.  Greater wage pressure and a shortage of workers in some areas spurred some companies to move into the interior or to other countries.  Other corporations are boosting investment.  A Hong Kong-based clothing manufacturer upgraded its Chinese plant, spending $1.9 mln for 29 Japan-made automated sewing machines.  It cut is work force from 140 to six, according to a Bloomberg report.