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FINNUT-Forskning og innovasjon i utdanningssektoren

When Robots meet the Nordic model: job creation, destruction or retraining? (RoboNord)

Alternative title: Når robotene møter den nordiske modellen: jobbskaping, nedleggelser eller opplæring?

Awarded: NOK 12.0 mill.

The aim of this project is to investigate the impact of robotization on skill requirements and labor market outcomes for both companies and individuals. We study these effects both at individual and company level. First, we consider the short-term and long-term effects of robotization on relative wages and employment for different groups of workers, where the groups are based on education level, type of education, occupation, and the type of skills and tasks required for each job. Secondly, we examine whether wage inequalities are increasing between companies that introduce robotic technology and those that do not. To better understand the mechanisms that link robotization to wage and employment changes, we study how unions influence the effects of robotization, and to what extent robotization changes the incentives for workers to organize. Furthermore, we look at the economic significance of investments in training after the introduction of industrial robots and the extent to which sickness absence changes. Thirdly, we examine the interaction between robotization and digitalization, as well as their joint effects on labor market outcomes. Finally, we will investigate whether robotization can lead to the return of jobs to Norway that have been sent out of the country (reshoring). We combine quantitative analyzes of register data from Statistics Norway and data from the International Federation of Robots with qualitative studies of the introduction of robot technology in companies to provide answers to questions that cannot be easily answered with register data. The project also contains individual case studies. Preliminary results suggest that companies that robotize are companies that initially experience employment growth. After robotization, however, employment growth flattens out. Not unexpectedly, we find that STEM workers (Science, Technology, Engineering, and Mathematics) are in greater demand both before and after the robotization of production. STEM workers are also the ones who benefit relatively most from the introduction of robots in production, but also support functions performed by both unskilled workers and some administrative support functions without higher qualification requirements seem to be in greater demand. Typical skilled workers are the ones who come out worst, presumably because several their tasks are being taken over by the robots. Digitization and artificial intelligence (AI) are increasingly being used to monitor production. In two case studies, we have studied the introduction of such technology in contact centers for two telecom companies in Norway and Germany. In both countries, worker representatives mobilized collective voice institutions to protect privacy and oversee the monitoring of production. In Germany, so-called works councils ("betriebsrat" ) played an important role in achieving local agreements that regulated the introduction and follow-up of new digital technology. In Norway, the introduction was handled within the established bargaining structures, and for some difficult issues, such as video surveillance, agreements were supported by decisions from the National Data Protection Authority. Established institutions for worker participation and co-termination together with broad data protection rules supported in both countries the design of flexible agreements that protect workers from abuse and give them a say in how the tools are used.

Robotisation poses a fundamental challenge to the way work is organised. Data from the International Federation of Robotics (IFR) show that orders of industrial robots have risen fivefold between 2001 and 2017, and experts expect this trend to accelerate (OECD, 2019). This development raises several issues. Increased robotisation represents a threat to certain jobs as robots take over tasks previously done by humans. However, robotisation also increases the demand for other tasks, and may improve the overall productivity of the firm, with potentially more rents to share. There is no consensus in the academic literature about the overall effects of robotisation. There is very little firm and individual level evidence on how robots affect employment and wages for different types of workers and competencies. When it comes to mechanisms, we know little about the processes and negotiations that occur between workers, unions and firms in the process of robotisation. Furthermore, there is a lack of knowledge on how robots fit in with other technological processes, such as digitalisation, how robotisation interacts with offshoring, and on the interaction between labour market institutions and robotisation. RoboNord addresses these knowledge needs by analysing, both at the firm and at the regional level, how robotisation affects employment, wages, training, and reskilling of different types of workers. We consider the interaction between other technologies and offshoring and estimate the effects on inequality and the segregation of workers across firms. RoboNord is an interdisciplinary collaborative project, combining register data and qualitative analysis. It has a strong comparative focus through collaboration, with leading researchers from Uppsala University, Harvard University, Cornell University and the US Census, which allows us to compare the effects of the introduction of robots in the Nordics to the effects of robots in the US.

Funding scheme:

FINNUT-Forskning og innovasjon i utdanningssektoren