ECONOMIC REPORT OF THE PRESIDENT

technologies—from clean energy technology to biotechnology to 3-D
printing technology—is broad. This section focuses on two new opportunities
that have the potential for broad spillovers into different parts of the
economy. One area is the rapidly growing field of robotics. The other area
involves Internet communications technology. While these areas offer much
promise, there are also a variety of challenges that result from their deployment
and increasing role in American life. For example, it is important that
the resultant gains from productivity growth from these technologies are
shared widely.
More specifically, in the area of robotics, this section explores concerns
that increased automation in the workplace threatens to displace elements
of the conventional labor force. It is important to keep in mind that, while
growing quickly, robotics are not poised to affect every area of the economy
or replace human labor. Nonetheless, robotics still have the potential to be
highly consequential for firms and, more broadly, for productivity.
This section also discusses two particular facets of Internet communications
technology, namely the on-demand economy and the digital divide.
The rise of the so-called on-demand economy—enabled by mobile Internet
applications—also has the potential for productivity and welfare gains but
could possibly lead to worker displacement, a prospect that is examined here
as well. This section also emphasizes the need to narrow what is commonly
called the digital divide—the gap between those who can access the Internet
and those who cannot—so that all may share in its benefits, the existence of
which is well-supported by empirical findings in the economics literature.
Robotics
One area of innovation that can help the United States to boost TFP
growth in the future is robotics. The first U.S. robots were introduced into
production by General Motors in 1961, and their prevalence has grown
steadily over time, particularly in manufacturing and the auto industry
(Gordon 2012). Recently, the deployment of robots has accelerated, leading
them to contribute more to productivity, as described below. However, these
changes potentially also create challenges in labor markets as concerns have
arisen about the extent to which robots will displace workers from their jobs.
An economy must carefully assess these developments to encourage innovation
but also to provide adequate training and protections for workers.
The use of industrial robots can be thought of as a specific form of
automation. As a characteristic of innovation for centuries, automation
enhances production processes from flour to textiles to virtually every
product in the market. Automation, including through the use of information
technology, is widely believed to foster increased productivity growth
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