Macroeconomic effects of robotization in Japan

Some previous researchers have developed an input-output model to forecast the societal changes caused by the penetration of computer-aided systems. In these studies, however, the key technological parameters, i.e., labor substitutability of industrial robots, were arbitrarily given. This paper describes an econometric method to evaluate the macroeconomic effects of robotization in the Japanese manufacturing industries. First, a production function model that represents the labor augumentation of industrial robots is described. The estimated results are compared with those of factory-level surveys given by JIRA. It is shown that these two values are quite compatible. A preliminary simulation model is then developed to determine the future robotization scenario of Japanese manufacturing industries. The simulation results demonstrate that although optimum robotization would affect around 10% of the human workers in the Japanese manufacturing industry in 2000, unemployment may not be a serious problem because the economic inefficiency of full employment policies is relatively small.