The Organizational Consequences of Robots: Firm-level Evidence

Lynn Wu, Operations, Informations, and Decisions, The Wharton School

Abstract: As a new general-purpose technology, robots have the potential to radically transform industries and affect employment. Preliminary empirical studies using industry and geographic region-level data have shown that robots differ from prior general-purpose technologies and predict substantial negative effects on employment. Using novel firm-level data, we hypothesize that the type of employment would be different as robots replace skilled workers and create work that complements robot investments. We also hypothesize that managerial work would also transform substantially, potentially replacing higher cogitative managerial work that is more immune to displacement from the past technology change.This could also have important implications for how work is organized. New innovative organizational design may be needed to take advantage of robotic investments. Overall, we expect the impact of robots on employment may be more nuanced than prior studies suggest. As robots become more widely adopted across industries, examining work practice and skill-based complements at the firm level is critical to understanding the impact of robotics on employment, innovation, and the organization of work.