Think Tank Calls for Government Policies to Support Warehouse Automation
Recognizing that as consumers continue to shop via e-commerce causing an increasing demand for logistics facilities, think tank Information Technology and Innovation Foundation, wrote in an article that "policymakers should promote robotic adoption and innovation to improve labor productivity, worker safety, delivery times, and supply chain resiliency.
The report notes that despite the advances in robotics, adoption has been slow, largely because of their cost and the difficulty of retrofitting existing warehouses with new and modern technologies. "It is clearly in the national interest for the United States to lead in robotic adoption of logistics facilities," the article says.
It asks Congress and the Biden administration to take the following steps:
Enact tax policies that encourage investment in automation and robotics.
Rational companies invest in new equipment if its after-tax net present value is greater than the cost of the investment. As such, tax policy plays a big role in investment decisions. At minimum, Congress should restore legislation allowing companies to expense first-year capital equipment investments. Doing so would enable more robotic investments to meet the hurdle rate for capital investments. The 2017 Tax Cuts and Jobs Act contained a provision permitting companies to fully expense qualified equipment the year it was placed into service. Unfortunately, that provision is phasing out this year. Congress should permanently extend it. And of course, Congress should resist neo-Luddite calls to tax robots, as such taxes would lower ROI and discourage firms from investing in robotic tools that could improve productivity. Rather, Congress should restore the investment tax credit for new machinery and equipment that was eliminated in 1986.
Prioritize robotic automation in government warehouses.
Agencies such as the United States Postal Service (USPS), Department of Defense (DOD), and Federal Bureau of Investigation (FBI) utilize warehouses in pursuit of their missions. Agency officials should prioritize warehouse automation to demonstrate the benefits of adoption and enable further development of robotic systems. And Congress should provide funding for both agencies to implement state-of-the art programs to automate their facilities.
Increase funding for the National Science Foundation (NSF) for robotics research.
The new NSF Directorate for Technology, Innovation and Partnerships (TIP) was charged by Congress to focus on 10 critical technologies, including robotics. As they implement this legislation, NSF should prioritize robotics research. To that end, Congress should increase funding for the NSF by at least $500 million for robotics research.
Target funding to robotics research.
Congress should increase funding for the National Institute of Standards and Technology’s (NIST) Hollings Manufacturing Extension Partnership (MEP). The agency should then use this funding to support projects that advance research in automation and autonomous robots. In addition, Congress should broaden the MEP mandate to include assisting small logistics and warehousing companies.
Modernize safety standards for machinery in industrial settings.
The National Institute for Occupational Safety and Health (NIOSH) should work with researchers, private companies, and government agencies responsible for setting workplace standards to modernize standards for machinery in warehouses and other industrial settings. Current Occupational Safety and Health Administration (OSHA) standards limit facility managers and robotics companies from developing new robotic systems and integrating them into industrial settings. NIOSH should develop new performance-based standards that enable companies to safely experiment with robotic systems.
Support small logistics and warehousing companies.
The Small Business Administration (SBA) should expand its Manufacturing Office to include support for logistics and warehousing companies. Allowing small logistics and warehousing companies to take advantage of the same resources as manufacturing companies would promote innovation and resiliency in each industry and the broader supply chain.
Create a national robotics awards program.
The Department of Commerce (DOC) should add a complement to the Malcolm Baldridge Quality Award, a presidential award to recognize companies for performance excellence, by creating a robotics automation award to recognize outstanding achievements in the use of robotics to boost productivity. Improved recognition could encourage additional research and development in robotics and boost adoption, including by the warehouse industry.
Raise the minimum wage.
Congress should raise the federal minimum wage to at least $12 an hour and index it to inflation to encourage the warehousing and storage industry to invest in automation. As the e-commerce industry continues to grow, raising the minimum wage will incentivize firms to invest in automation to improve labor productivity.
Support workers displaced by automation.
Automation in warehouses will replace some tasks and may cause warehouse workers to lose their jobs, although much of this could be through attrition. Policymakers should improve job training and unemployment compensation programs. By partnering with local organizations to offer job training to displaced workers and permitting program attendees to receive unemployment compensation during training, policymakers can mitigate the effects of economic displacement.
Launch an advisory committee for robotics innovation and adoption.
Congress should pass legislation directing DOC to create an advisory committee to develop a strategy supporting robotics innovation and adoption. In devising a strategy, the committee should create recommendations that advance robotics research, promote adoption by both the public and private sectors, support the workforce, and more.
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