The characteristics and implications of Robot Hubs around the US

A recent project from the National Bureau of Economic Research used data from the Annual Survey of Manufactures to study the characteristics and geography of investments in robots across U.S. manufacturing establishments and find whether it revealed any impact on the economy. The team found that robotics adoption and intensity is more closely related to the size of the establishment than it is to its age. The study presents results on the distribution of robots in U.S. manufacturing by establishment characteristics and geography using new establishment-level data collected by the U.S. Census Bureau’s Annual Survey of Manufacturers for reference year 2018. This is the first establishment-level analysis of the use of robots in U.S. manufacturing, leveraging data on approximately 35,000 establishments. Two thirds of the study’s sample size was from about 187,000 large manufacturing plants, and the remaining sample was a random selection of about 51,000 small manufacturing plants.

The authors characterized establishments with robots along several dimensions and found that establishments with robots have more employees, lower earnings per worker, a higher share of production workers, and more capital expenditures, including expenditures on computers and peripheral data processing equipment.

The authors found that the physical distribution of robots is highly skewed across locations, even after accounting for differences in industry composition and manufacturing employment across locations. They found that Robot Hubs (sites with far more robots than one would expect even after accounting for industry and manufacturing employment) are more likely to have higher union membership, have robot integrators (firms that specialize in helping manufacturers install robots), and have a higher share of production workers than other locations.

In order to assess their intensity of robot use, researchers identified plants as robot users if they:

• Reported having active robots, 
• Reported having purchased robots, or 
• Reported having made capital expenditures on robots.

They asked manufacturers:

• How many robots they were currently using,
• How many they had purchased, and
• How much they had spent on robotic equipment. 

The researchers found that establishments with robots tend to be larger, have higher earnings per worker, have a larger share of production workers, and spend more on capital expenditures, including IT, than establishments without robots. The findings suggested that robot-using plants tend to be those that hire a disproportionately higher share of production workers than non-robot-using plants of similar size and age.

The study raised questions of whether the minimum efficient scale for robot adoption varies with establishment characteristics. Researchers were uncertain why union membership is positively correlated with Robot Hubs. Additionally, the study’s scope mainly focused on robot use in manufacturing plants but leaves more research to be done on the impact of increases in robot manufacturing on economy.