How automation will change Iowa's workforce

Hiawatha — CCB Packaging's warehouse space here looks like one part 'Raiders of the Lost Ark' and one part 'I, Robot.'

In one room, crates filled with prepackaged food are piled high like in Raiders' Hangar 51 — the storage facility that housed the Ark of the Covenant. A room over, those crates are tipped onto conveyor belts. Robotic arms sort and pick up the packets, two or three at a time, and place them into boxes folded earlier by a different machine.

The boxes are sent down the line only to be sealed by another machine, and placed and wrapped into bulk shipments by yet another.

CCB Vice President Frank Cotty stands in the middle with an open laptop, doing some quick troubleshooting.

The scene here — robots handling and making products while humans oversee the work — will become more familiar in the next two decades as automation becomes more prevalent.

'Automation helps make our American employers more competitive on a global scale. It allows manufactures to produce products more quickly at a higher quality and then to move them to market using fewer resources,' said Dan Martin, dean of industrial technologies at Kirkwood Community College.

Automation can boost productivity and fill in gaps if a company can't find enough workers or faces a slew of retirements. That same technology, however, can also vastly change employment prospects or leave companies that don't embrace it behind.

Disruption and dislocation

While not a new phenomenon, researchers and industry watchers only expect automation to continue. It will spread across job sectors as machines get smarter and more efficient. Jobs with routine tasks — typically those that pay less and require less education — are at the most risk of being replaced.

'If you're in an occupation where the majority of the tasks that you perform can be substituted by a machine, that job may go away,' said Mike Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana. 'If you're in a job where most of your work cannot be substituted by a machine, it's likely that your entire job will be complemented by a machine.'

Data entry keyers, telemarketers, insurance underwriters and tax preparers are among the top automatable jobs, according to Ball State's research.

But how many jobs are affected by automation and how fast they'll feel it depends on who you ask:

-- A University of Oxford report estimates that 47 percent of U.S. employment could be automated within the next two decades.

-- Forrester Research expects automation to displace 24.7 million jobs, but create 14.9 million by 2027.

-- PricewaterhouseCoopers estimates 38 percent of U.S. jobs are at a high risk of automation by the early 2030s.

-- On average, 57.3 percent of jobs in every U.S. county are at risk of automation, according to a June Ball State report.

-- Just 5 percent of occupations globally are currently able to be fully automated, McKinsey & Co reported. About half of all tasks people are paid for, however, can be automated.

'As work evolves at higher rates of change among sectors, locations, activities and skill requirements, many workers may need assistance in adjusting to the new age,' McKinsey researchers wrote in their January 2017 report.

Even so, McKinsey concluded, companies won't be able to just rely on technology to meet production goals. Humans and robots will have to work side-by-side.

There's already evidence that Iowa's manufacturers are making more with less people.

The portion of Iowa's GDP from manufacturing grew 21.7 percent between 2000 and 2016, adjusted for inflation. During those same 16 years, though, employment in the industry fell by about 15 percent, or 38,000 jobs.

Automation and the use of technology can be seen in other industries as well, as machine learning, better algorithms and artificial intelligence make tasks once thought only capable by humans open to robots. Technology is already prevalent in agriculture, while multiple companies are working on technology to automate driving, and some financial businesses turn to robo-advisers to dispense investment advice.

Researchers such as Hicks worry that when jobs are lost, it will hit those without the resources to rebound and on a regional scale. If job losses from automation are clustered, he said, it can exacerbate population moves from rural to urban areas, and reduce the economic and political clout of small towns.

'If all of the lost jobs through automation, or say half of them, in Iowa are concentrated in 10 counties, then you get a bunch of dislocation — potentially very significant dislocation because there are no new jobs available for those workers,' Hicks said.

In Iowa, Lee County has the highest amount of jobs, 61.5 percent, at risk of automation, according to Ball State's research. Dallas County has the lowest risk at just over 50 percent. Linn (54.5 percent) and Johnson (50.7) counties are also on the lower side for Iowa.

Meanwhile, jobs with the least risk of automation come with an average salary above $80,000 a year. Those with the highest risk though, typically pay less than $40,000.

'It's altogether possible that the vast majority of Americans will see nothing but benefits from this — goods will be cheaper, they'll be more efficient in their jobs, their workplace will be better,' Hicks said. 'But what if 20 percent of households are worse off for it for a generation? That's pretty big.'

'An imperative to compete'

While automation can cause job reductions, many, including Hicks, believe technological changes will have overall positive results.

Mike O'Donnell, of Iowa State University's Center for Industrial Research and Service, said more automation can help make factory floors better work environments. Instead of workers moving heavy objects, they'll use a tablet to monitor machines that do it or wear powered suits, like an exoskeleton, to move products more safely.

'In a world where machines are growing ever smarter and more powerful, that which makes us most human becomes ever more important. The most resilient people in the future will be those that are the most interdisciplinary learners.'

- Alec Ross

Author, The Industries of the Future

Increased use of technology will require people with skills to manage and program that machinery. Those jobs, O'Donnell said, will pay more.

'All the research we've seen on automation from a macro standpoint is, overtime, companies that automate do better in terms of long-term performance and the number of jobs at those companies, and they also tend to pay more over the long-run,' he said.

Automation and other technology are 'an imperative to compete' for manufacturers, he said.

'If we don't keep up with automation technologies and other manufacturing technologies that are emerging, other states and other countries will,' O'Donnell said.

Iowa Economic Development Director Debi Durham said automation and digital manufacturing 'is needed for the survival' of Iowa's manufacturing sector.

Back at CCB, the robots represent the company's biggest leap of faith in its almost 30-year history, outside of moving from Marion to Hiawatha, President Brad Canfield said.

Unlike the automated lines it will install in the future, CCB didn't have the business to justify the first installation in 2008. The company did it anyway.

'We felt that if we were going to be a growing, viable company in the future we had to make a change in our business model,' Canfield said.

Initially, CCB looked at the robotic lines as a way to save money: the company could package more product with a reduced head count. A set of six robotic arms can do the work of 15 people, Canfield said.

In the end, Canfield said, CCB didn't have to reduce staff because it could move more product and take on more clients.

Employees still manually package products CCB has deemed inefficient to automate, while others are responsible for managing the robotic lines. The company employs 400 across three shifts and another 100 through a staffing business it owns.

'People ask the same questions, 'what is that doing to our (jobs).' Our answer is nothing. Our business continues to grow. I know there are people out there that put automation in specifically for head count reduction, but that hasn't been our case,' Canfield said.

CCB even invested in a machine that can automatically switch out batteries in the company's forklifts, taking transfer time down to eight minutes from upward of 20.

The company's growth, tied to its automation, has led it to look at expansions beyond Hiawatha.

'That will be our next move. It's going to happen in the next couple years. We've had all of our customers talk to us about it,' Canfield said.

Resiliency and adaptability

State officials and experts point to education, namely post-high school training, as the key to reduce the negative effects of automation and preparing for future jobs.

'Those higher skills can be those finishing college for those who didn't, to two-year degrees, to certification and increased use of apprenticeship training. That's how workers are going to stay relevant,' state economic director Durham said.

A Georgetown University report cited by the state estimates that 68 percent of the jobs in Iowa will need some training beyond high school by 2025, although that's not entirely due to increased automation.

State officials have pointed to the report as they push for a goal of having 70 percent of Iowa's workforce with postsecondary education or training by that year.

'Government can't solve all of these problems, but we can certainly create a regulatory culture, a tax culture that is friendly to businesses so they can make the necessary investments, not only in their plant force as far as new equipment and investing in capital, but quite frankly, investing in their workforce as well,' Durham said.

'If vocational education is focused on delivering truck drivers, that certainly satisfies the immediate employment demands of an important sector in the economy, (but) it screws those workers because CDL truck driving is technologically dead now."

- Mike Hicks

Director, Center for Business and Economic Research at Ball State University

Workers, including those on factory floors, will need soft skills, such as creative thinking and the ability to collaborate, to be adaptable as technology and job demands change.

'In a world where machines are growing ever smarter and more powerful, that which makes us most human becomes ever more important. The most resilient people in the future will be those that are the most interdisciplinary learners,' said Alec Ross, a former senior adviser for innovation with the State Department, who will keynote the Iowa Ideas conference in September.

States and educators may also have to adjust the type of training they push away from purely vocational or skills-based education to training that favors skills that allow people to adjust, Hicks said.

'If vocational education is focused on delivering truck drivers, that certainly satisfies the immediate employment demands of an important sector in the economy, (but) it screws those workers because CDL truck driving is technologically dead now, it just hasn't been called,' Hicks said.

If states and training programs push vocational education, he said, an equal amount or more time should be spent on training students with 'the fundamental skills that will make them adaptable,' Hicks said.

'We need to be pushing those STEM skills and those soft skills that allow you to hold an occupation and allow you to adapt,' he said.

The origin of 'robot'

Today, robots are widely known in business, fiction and everyday life. The origin of the term 'robot,' though, is fewer than 100 years old and ties back to a Czech playwright.

The word was first used in a play by Karl Capek in 1921. Capek's brother, Josef, first coined the term, according to some.

Capek's play, Rossum's Universal Robots, was about mechanical men built to work on assembly lines, according to Stanford University. Eventually, the robots rebel against their human overlords.

The robots in the play earned their name from the Czech word 'robota' for forced labor.

The word 'robotics' is also tied to science fiction, coined by writer Isaac Asimov, known for the book 'I, Robot,' among many others. Asimov also came up with the three 'Laws of Robotics' that broadly say the machines cannot injure humans and must obey them. The machines in 'I, Robot' do make some creative interpretations of those rules, however.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

This story appears in the fourth edition of the Iowa Ideas magazine.