A major new study from the London School of Economics and Political Science is challenging one of manufacturing’s longest-held fears: that automation destroys jobs. Instead, the evidence suggests the opposite – that investment in technologies such as CNC machines and industrial robots is not only boosting productivity, but actively increasing employment across British factories.
For businesses like Banelec, the Brierley Hill-based electrical control systems and automation specialist, the findings reflect what has long been happening on the ground.
At its core, Banelec’s proposition is simple but increasingly critical: designing and integrating bespoke electrical control and automation systems that help manufacturers become smarter, safer and more productive. In an era where Industry 4.0 is no longer a concept but a commercial necessity, that capability is becoming central to how factories compete and grow.
The report, authored by economists including Aniket Baksy and Daniel Chandler, analysed nearly 27,000 UK manufacturing sites between 2005 and 2023. It found that plants adopting CNC machines saw employment rise by around 6% within four years, while robot adoption drove increases of approximately 8%. Businesses that scaled up their use of automation technologies experienced even stronger gains, with employment rising by close to 9%.
Crucially, the research highlights that automation is not simply replacing workers, but reshaping roles. As repetitive and physically demanding tasks are reduced, demand increases for higher-skilled roles in programming, systems integration, quality control and maintenance.
This shift is one that Banelec sees first-hand through its project work across multiple industrial sectors.
Dean Banner, Managing Director of Banelec, said the findings mirror the reality experienced by forward-thinking manufacturers.
“Automation is about enabling people to do more valuable, skilled and safer work,” he said. “What we’re seeing across industry is that when businesses invest in the right control systems and automation, they become more competitive, they win more work, and ultimately they employ more people.”
The study also points to a broader trend: automation-led growth does not appear to come at the expense of other firms. In many cases, increased adoption creates positive spillovers across supply chains, driving demand and supporting wider employment growth within industries.
For Banelec, this reinforces the importance of taking a systems-level view of automation. Rather than treating technology as a standalone investment, manufacturers must integrate it effectively into their processes – something the company has built its reputation on over more than two decades.
Banner added: “The real gains come when automation is properly integrated. It’s about how everything works together, from control systems through to operator interaction. That’s where businesses unlock productivity and create the capacity to grow.”
The report also highlights the concept of “learning by doing”, with firms seeing the greatest returns as they expand their use of automation over time. This aligns with Banelec’s role as a long-term engineering partner, supporting customers as they evolve their operations and scale their capabilities.
As UK manufacturing continues to navigate global competition, labour challenges and the transition to more sustainable production, the message from both the data and industry practitioners is clear: automation is a catalyst for growth.
And for companies like Banelec, operating behind the scenes to deliver the control systems that power modern industry, that shift represents a defining role in the future of British manufacturing.