Economic Aspects of Automation
The increasing diffusion of automation in all sectors of the industrial world gives rise to a deep modification of labor organization and requires a new approach to evaluate industrial systems efficiency, effectiveness, and economic convenience. Until now
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Economic Asp 6. Economic Aspects of Automation
Piercarlo Ravazzi, Agostino Villa
The increasing diffusion of automation in all sectors of the industrial world gives rise to a deep modification of labor organization and requires a new approach to evaluate industrial systems efficiency, effectiveness, and economic convenience. Until now, the evaluation tools and methods at disposal of industrial managers are rare and even complex. Easy-to-use criteria, possibly based on robust but simple models and concepts, appear to be necessary. This chapter gives an overview of concepts, based on the economic theory but revised in the light of industrial practice, which can be applied for evaluating the impact and effects of automation diffusion in enterprises.
6.3 Effects of Automation in the Enterprise .. 98 6.3.1 Effects of Automation on the Production Function ........... 98 6.3.2 Effects of Automation on Incentivization and Control of Workers ................. 100 6.3.3 Effects of Automation on Costs Flexibility ....................... 101
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6.4 Mid-Term Effects of Automation ............ 6.4.1 Macroeconomics Effects of Automation: Nominal Prices and Wages ............ 6.4.2 Macroeconomics Effects of Automation in the Mid-Term: Actual Wages and Natural Unemployment .......... 6.4.3 Macroeconomic Effects of Automation in the Mid Term: Natural Unemployment and Technological Unemployment..
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6.5 Final Comments.................................... 111
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6.6 Capital/Labor and Capital/Product Ratios in the Most Important Italian Industrial Sectors ................................................ 113
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References .................................................. 115
Process automation spread through the industrial world in both production and services during the 20th century, and more intensively in recent decades. The conditions that assured its wide diffusion were first the development of electronics, then informatics, and today information and communication technologies (ICT), as demonstrated in Fig. 6.1a–c. Since the late 1970s, periods of large investment in automation, followed by periods of reflection with critical revision of previous implementations and their impact on revenue, have taken place. This periodic attraction and subsequent
revision of automation applications is still occurring, mainly in small to mid-sized enterprises (SME) as well as in several large firms. Paradigmatic could be the case of Fiat, which reached the highest level of automation in their assembly lines late in the 1980s, whilst during the subsequent decade it suffered a deep crisis in which investments in automation seemed to be unprofitable. However, the next period – the present one – is characterized by significant growth for which the high level of automation already at its disposal has been a driver.
6.1 6.2
Basic Concepts in Evaluating Automation Effects ...........
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Part A 6
The Evaluation Model ........................... 6.2.1 Introductory Elements of Production Economy ................. 6.2.2 Measure
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