Who is Using Robots in Germany?

IFR statistics show that Germany has consistently been a global top 5 robotics market for many years. They also provide distribution by industry. But what it does not show is who exactly is installing these robots and what distinguishes a robot user from a non-user. Data collected from nearly 16,000 plants by the Institute for Employment Research (IAB) of the Federal Employment Agency helps us to learn more about robot users in Germany.

New Insights from Microdata on Robot Use

We use the 2019 wave of the IAB Establishment Panel Survey that asked for robot use between 2014 and 2018. The first and probably most unexpected finding is that robot use was relatively uncommon, even within manufacturing: Just about 8% of the plants used robots in 2018. Secondly, only a small number of plants accounted for most of the robot stock. This means that automation is highly concentrated in a rather small number of factories. Nonetheless, there are clear indications of ongoing diffusion, as new adopters primarily drive recent growth in robot installations. Establishments utilizing robots tend to be larger, more investment- and export-oriented, and more likely to implement other advanced technologies.

What Drives Robot Adoption?

Firm size

Larger plants are significantly more likely to adopt robots. This might simply reflect their greater financial resources and organizational capacity to invest in and manage new technologies. Export-oriented plants also exhibit higher adoption rates, possibly because participation in global markets increases the pressure to innovate and improve efficiency. Unexpectedly, our analysis does not find a strong association of wage level or productivity and subsequent robot adoption. More productive or higher-wage plants do not seem to be more inclined to automate than others.

Workforce composition

Workforce composition is a key driver of robot adoption in Germany. Plants with a higher proportion of low-skill workers are more likely to adopt robots, as robots can efficiently substitute for routine tasks. Establishments with more high-skill employees adopt robots less frequently, since these workers typically perform complex, non-routine activities that are less amenable to automation.

Lack of skilled labor

Plants expressing a demand for further employee training are more likely to adopt robots. The positive association with training demand could indicate that a lack of skilled workers itself acts as an incentive for plants to consider automation. Robots are used to fill gaps in workforce capabilities. However, if plants experience more profound shortages of skilled labor, who are essential for operating and managing advanced machinery, robot adoption may be constrained. The data indicates that companies facing shortages of skilled labor are less likely to automate. Together, these findings highlight that workforce skills and labor market conditions are relevant factors in plants’ automation decisions.

How Does Robot Adoption Affect Labour Demand Within Factories?

Our German establishment-level data also allows us to study the effects of robot use on factory jobs. Most importantly, we find no negative employment effects in any particular occupational or age group. Robots may displace certain tasks, but they also create new employment opportunities, particularly for skilled and younger workers. We examine these effects by linking data on robot use with social security records and detailed occupational task descriptions. We find that robot adoption leads to an average increase of 5% in overall employment within an establishment. Moreover, plants that adopt robots experience a 24% rise in new hires during the year of adoption, particularly among technicians, engineers, and manager occupations characterized by non-routine, non-programmable tasks.

Younger workers benefit most from the introduction of new technologies, likely due to their greater adaptability and digital skills. Meanwhile, employment remains stable in low-skilled, routine-intensive occupations and among older workers, although these groups experience significantly higher turnover. This pattern suggests that robots tend to replace specific tasks rather than entire jobs, and that productivity gains from automation can support overall employment levels.

We further examine the gendered labour market outcome of robots and find that robot adoption yields a modest gain in female employment driven by increased hiring and accompanied by a substantial increase in job churning. The positive effect on female employment is concentrated on medium-qualified occupations and full-time workers.

Policy Implications

These results suggest that a shortage of young workers in low- and medium-skilled occupations may inhibit the widespread adoption of robotic technologies, potentially limiting the ability of robotics to address skilled labor shortages. At the same time, accelerated robotization may widen the gap between young and old workers. Younger employees are likely to find promising career prospects in modern, technology-driven establishments, while older workers may remain in smaller, less technology-intensive plants. These dynamics highlight the critical importance of lifelong learning and workplace training, particularly for equipping older employees with the skills needed to work alongside new technologies.

References

Deng, Liuchun, Steffen Müller, Verena Plümpe, and Jens Stegmaier. 2023. "Robots and Female Employment in German Manufacturing." AEA Papers and Proceedings 113: 224–28.

Deng, Liuchun, Steffen Müller, Verena Plümpe, and Jens Stegmaier. "Robots, occupations, and worker age: A production-unit analysis of employment." European Economic Review 170 (2024): 104881.

Deng, Liuchun, Verena Plümpe, and Jens Stegmaier. "Robot Adoption at German Plants." Journal of Economics and Statistics 244.3 (2024): 201-235.

Teaser picture credit: FANUC