Aug 8, 2023 - Economy

The Midwest is America's robot capital

Illustration of a giant manufacturing robot embedded in a cornfield.

Illustration: Aïda Amer/Axios

Iowa, Michigan, Kansas, Wisconsin and Minnesota are the top five states using robots in manufacturing, according to a new report from the National Bureau of Economic Research.

Why it matters: Robots are set to fundamentally change how economies operate, much like the internet and electricity — yet their impact stands to be geographically stratified.

The big picture: The U.S. robot economy is "highly skewed" and split into three tiers, according to the report.

Driving the news: The researchers used census data and survey results from around 35,000 manufacturers to examine regional adoption of robotics.

  • One main finding: "Robots are mostly complements to production workers, not substitutes for them."
  • Another insight: Companies with robots tend to have more human workers than those without, but they often pay their workers less.

There's also a robot cluster effect: Companies are more likely to use robots if others nearby use them and if they're located in manufacturing hubs.

  • That dynamic is partly driven by the presence of "robot integrators" — businesses that specialize in helping companies acquire and install robots.
  • "An area with at least one integrator is 20-25 percentage points more likely to be a robot hub than an area with no integrators," per the report.

Reality check: While robots are contributing to national GDP, they're not yet turning around America's lagging productivity growth.

  • That mirrors a 1980s phenomenon wherein computers spread without productivity spiking — until the 1990s.
  • Work automation has also been linked to political polarization. If robots are deployed unevenly across America, leaving some regions and workers in the dust, that carries risks of further polarization.

What they're saying: Erik Brynjolfsson, director of the Stanford Digital Economy Lab and lead report author, concedes much "unexplained dark matter" remains when it comes to understanding why robot hubs emerge where they do.

  • Brynjolfsson also worries about "a separation, where some manufacturing becomes much more high-tech and robust, and other parts get left behind."
  • The keys to more even robot adoption could be the spread of robot integrator firms and "policies that support investments in specialized human capital," said Rob Seamans, a report co-author from New York University.

The bottom line: Industrial robots have been in use in the U.S. since at least 1961, but we still don't know much about the connection between robot adoption and other forms of investment, or robots' impact on international trade.

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