Ark Invest

Assembly Line

The Potential Impact of Automation on Manufacturing Profitability

Date:

Organizations: Ark Invest

Even at early stages of automation, the correlation between robot density and employee wages as a percent of revenue, or labor share, is clear: as a company becomes more capital intensive, labor’s share of revenue declines, as shown below, but automation increases productivity, potentially increasing both labor income and corporate profits, a win-win.

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