Adopting robots will cause a business’s profits to decline at first

"It's interesting that a tool meant to increase productivity had the opposite effect, at least at first. We wanted to know whether there is a similar pattern with robotics."

For their work, the scientists analyzed entire sectors, primarily in manufacturing where robots are most commonly used. "Initially, firms are adopting robots to create a competitive advantage by lowering costs," said Velu. "But process innovation is cheap to copy, and competitors will also adopt robots if it helps them make their products more cheaply. This then starts to squeeze margins and reduce profit margin."

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