In many production processes, human labour and machines are substitutes. Wages are rising quickly in countries such as China. For some years now the annual increase in wages in manufacturing in China has been above ten cent and this rise in labour costs is causing many businesses to consider investment in robotics to fast-forward the process of automatic in factories.

This is known by economists as capital-labour substitution. Rising demand for robotics provides a large commercial opportunity for businesses that supply the necessary technology - many are based in Taiwan. But automation is not a smooth process, businesses replacing people with technology need to be aware of some of the pitfalls - can you think what some of these might be?

This video from Financial Times news provides some of the background

Featured
CPD courses

WOW! Economics 2015

WOW! your A Level Economics students with this superb collection of engaging and effective teaching & learning resources and approaches. Not to be missed!

Learn more ›

Teaching & learning products

AQA Economics Year 1 (AS) Practice Exam Papers

This resource comprises two practice exam papers (with supporting mark schemes) for each of the two Year 1 (AS) papers. The format of each practice exam paper follows precisely the format of the specimen assessment materials issued by the board that have been accredited by Ofqual.

£75.00

AS Macroeconomics Revision Guide

This 44-page, full-colour printed revision guide is designed to support students preparing for their AS Economics exams on macroeconomics. tutor2u's Geoff Riley provides comprehensive coverage of all the core macroeconomic topics for AS Economics

£4.00