Fact of the Week: Robot Adoption Leads to Economic Growth in Highly Productive Nations

Source: Shohei Momoda, et al., "Automation and Growth Patterns in an Open Economy," (working paper, Kyoto University, Institute of Economic Research, December 2024).

Commentary: A wide body of literature has acknowledged that robotics and automation are key drivers of increasing productivity. However, these studies focus on the effects of robotics adoption on a closed economy. A study by Momoda, et al. furthers this research by assessing the effects of robotics adoption internationally. They find that countries with a comparative advantage in robotics over labor, that is, countries with the highest robot density, will see accelerated economic growth from robot adoption and will also see heightened robot accumulation in the future. On the other hand, countries without this comparative advantage will not invest in robot adoption but will instead invest in more imports from leading countries. These countries will not experience economic or productivity gains. Momoda, et al. conclude that automation will lead to higher economic growth and greater robot accumulation for leading nations but will also lead to greater international economic disparities.