My point is that the US industry has no compelling reason to invest in automation when foreign labor is so cheap. It is cheap because labor here is expensive. It is expensive because of regulatory and statutory intervention. You are correct that we do not have any labor(somewhat hyperbolic of course). I understand why in some cases automation makes total sense on the micro and macro level. Are you trying to say that because it is expensive to employ labor here automation will fill in the gap? If so, why? Labor is cheap in other regions and money is getting tighter as we speak. Automation requires heavy upfront costs.
You're 100% right so long as disease pandemics and other disruptive events are discounted.
And I think in a board room in 2019 you could do that, you could say it makes no sense to hedge against a disease pandemic, those never happen. It makes no sense to optimise for locality when we can get cheap labour on the far side of the globe and disruption won't happen.
But the trouble is that when you make that presentation in 2021 every single person in the room knows it isn't true, they all lived through this, they saw it themselves.
Usually the next argument is the one you already brought up - but labour costs in the US are too high. But a robot factory doesn't incur labour costs as I explained.
With the global lockdowns in place, you would have to consider the hedge. That is the point of the article and your point. There will certainly be companies that move toward automation. I wonder whether the moves toward automation at the micro level are offset by the lack of growth in the macro. Is it a wash? For how long? These are questions that we will find out.
