RUDN Economist Told How to Increase Future Productivity When Humans are colleagues With Robots

Newswise — The RUDN University economist explored what the labor market of the future will be like, where humans and itelligent machines will work together. The authors have identified which of them will make the main contribution to productivity growth – and these are not robots. The results were published in the Journal of Innovation & Knowledge.

In 2016, economists formulated the concept of the fourth industrial revolution, or industry 4.0. It involves the introduction of cyber-physical systems into production: autonomous robots, artificial intelligence, the Internet of things, and so on. However, if digital technologies complement human labor, then intelligent machines can replace it completely. An economist from RUDN University studied how productivity will change in the future in enterprises where people and smart technologies will be employed.

“There are only isolated studies and general theoretical assumptions about the role of human resources and machines in production. Due to the paucity of empirical research, there is uncertainty about the contribution of human resources and machine technology to productivity. Our goal was to explore the future of global labor markets and determine how automation will change them,”  said Elena Popkova, Doctor of Economics, Professor at RUDN University, President of the Institute of Scientific Communications.

Economists compiled a representative sample of countries (Australia, Brazil, Denmark, India, Ireland, China, Malaysia, Mexico, Russia, Thailand, Chile, South Africa). Based on the sample, the authors built a model describing the dependence of production volume on the global spread of robots, the ease of hiring a foreign worker, and the ratio of wages and human labor productivity. The model consists of a series of regression equations that establish the relationship between these parameters.

Economists have found that labor productivity is determined by the availability of human resources, not automation. To optimize the global labor market, it is necessary to increase the availability of hiring foreign workers by 32%. This will increase wages and productivity by 74%. The authors also developed recommendations for managers for the medium term. Among them are the use of human resources in international project teams, the active introduction of smart technologies, training staff and stimulating healthy competition, and intensive financial incentives for employees.

“Labour productivity depends on human resources – not on automation. The global spread of technology is not conducive to productivity growth, although there will be a shift from quantity to quality that we have not yet seen. This can be explained by the lack of digital competencies among machine operators. Robots may be used inappropriately, which slows down production. Massive staff training will solve this problem in the long term. Relying on competition will also help maximize productivity in the medium term. Since we used a representative sample of countries, our conclusions are universal for countries with any level of economic freedom,” said Elena Popkova, Doctor of Economics, Professor at RUDN University, President of the Institute of Scientific Communications.