Amid significant advancements in the realms of artificial intelligence (AI) and robotics, there’s plenty of related investment ebullience. But there are also widespread fears that those technologies will send millions of workers searching for new jobs.
Under any circumstances, job loss is negative, and the specter of it via AI and robotics could prompt some investors to apply skepticism to ETFs like the VanEck Robotics ETF (IBOT). In what could be good news for the fund, the jobs reality of AI/robotics is arguably more gentle than current perceptions.
Indeed, many disruptive technologies have histories of displacing some workers, but not necessarily replacing them outright. In fact, as innovative technologies mature and usage cases increase, it’s common to see more jobs created than lost.
Investigating IBOT’s Jobs Impact
IBOT, which turned a year old last month and follows the BlueStar Robotics Index, is home to an array of companies that help clients and end users of their products bolster productivity. In theory, that sounds like a potential jobs killer, but the reality is more encouraging.
“The creation of new jobs often correlates with heightened productivity. Businesses adopting new technologies work more efficiently, increasing worker output,” noted VanEck product analyst Drew Anderson. “This productivity surge can drive company expansion, resulting in more job opportunities. Additionally, increased efficiency may lower prices, stimulating consumer spending and further job creation across various sectors.”
While robotics could be a long-term jobs creator, the industry and some of the companies residing on the IBOT roster could see increased profits and revenue over the long haul for a simple reason. The world, including major economies such as the U.S. and China, are grappling with the dual headwinds of tighter labor pools and declining birth rates. Said another way, fewer children being born means fewer workers to eventually enter the workforce and that’s a void robotics can fill.
“The (U.S.) fertility rate has been well below replacement for decades,” observed Anderson. “Amongst developed nations, the split between adults who are working age and those who are retired will be nearly 50/50. That is, too many people depend on the working class at our current levels of efficiency. With these demographic changes, innovative solutions are imperative to maintain economic productivity.”
Those are potentially strong tailwinds for IBOT as is the point that the likely outcome for many robotics use case cases involves collaboration with humans, not outright replacement of them.
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