102 ● Exploratory Workshop on the Social Impacts of Robotics
In short, the increasing diffusion of robots is likely to make only a
modest, though still significant,
contribution to improving the cost effectiveness
of most manufacturing firms.
One of the basic factors limiting
benefits of total
is that direct wage costs seldom account for more than costs and any savings through reducing direct man-hour
such potential 15-25 per cent requirements tend
to be partly offset by increases in capital charges and in indirect wage and salary costs, and further offsets would be generated if wage rates are increased
to help gain acceptance of potential benefits ‘arises
the fact that
An additional limitation on only a narrow array of tasks
such can be
performed more economically by the robotizable capabilities.
robots than by labor Indeed, even some of
or by machines which the manual functions
can be economically
transferred to robots now as was noted earlier.
From the standpoint of longer term planning perspectives, consideration
should also be given to a plant’s cost proportions and to the prospective effects of increasing the ratio of “fixed” to “variable” costs. Cost proportions differ very widely, of course, among industries as well as among plants within industries. The long term average proportion of total costs accounted for by actual wages in U.S. manufacturing has been well under 20 per cent, ranging between less than 10 per cent in ore smelting, petroleum refining and other industries which represent the first stage of processing natural resources to more than 40 per cent in in-
effects of robotization on total unit costs through reductions in unit wage costs
would tend to be far greater at the latter only to the magnitude of cost proportions, which a given category of unit costs could innovations. Thus, any resulting increases
be given not
but also to the
through robots or other per man-hour which are largely
or wholly offset by attendant increases in hourly wage rates would yield little or .
no cost advantage, however large the wage cost ratio -- especially if account is
For a comparison of cost proportions in 20 manufacturing industries, see B. Gold,
Explorations in Managerial Economics:
Costs, Technology and
Macmillan, 1971; New York:
Basic Books, 1971), p. 137.
translation - Tokyo:
Chikura Shobo, 1977.
Differences in cost
differences in their “make VS. and facilities, in their scale
of b u y ” r a t i o s , o p e r a t i o n s
in the modernity of their technologies
further discussion, see B. Gold,
Perspectives on Size, Scale and of Economic Literature March 1981,
especially pp. 21 et.seq. —