Record Number Purchases of Commercial Robots
The article describes the current radical shift in the production methods in American corporate life, which is that of automation. The article reports that a record number of 29 000 robots valued at $1.48 Billion are being purchased by factories, which surpasses the previous peak prior to the pandemic. Some explanations have been put forward for why this bulk buying has occurred, such as a lack of labor force in the factories. The pandemic has found many companies in a deeper pit. Other reasons as to why companies see a benefit in robots is their ability to fill unpopular overnight shifts, as they have for Athena Manufacturing, which has expressed the utility of their robots.
We shall evaluate the network effect that automation has had on American corporate life, as to why the increase of copying the strategy firms that use automation is beneficial for firms that are modifying their production procedures. There shall also be mention of why the imitation of this strategy could lead to extreme scenarios. There has been an increase in robots bought by american companies in the past decade, which has steadily manifested a positive image for robots in the workplace. This improved perception of robots can be identified as a network effect where more and more companies are attempting to purchase the product – the robot. The identified market consists of the American factories, where we can plot the network effect as f(z), where z is the fraction of American companies. Over the past decades, one has observed a steady shift where initially there was a small cult of believers (factoreis that also could afford) in robots in the workplace, but with increased production and research one has found that the market equilibrium has continually grown, with orders by even non-automotive companies to 53%. There does exist a network effect due to the increasingly positive perception of robots and of course the financial benefits that can be capitalized upon, which does raise questions of optimality in the market at this moment in time, as some factories might buy the product at a higher price than what its current valuation. Perhaps the companies could benefit more in real terms from employing human workers. This also begs the question about the negative effects of this network effect, which is precisely that of future unemployment of people with lower-skilled qualification. What effect this will have on society are intricate and can only fully be observed in the future looking backwards, but a lack of jobs has never been a positive indicator for any society.
LINK: https://www.cnn.com/2021/11/12/tech/robot-automation/index.html