AI and robots in 2025: the robotics revolution we predicted has arrived

In 2019, when we launched our groundbreaking study, How Robots Change the World, we noted that we were standing at a pivotal moment in economic history. The fast-paced technological advances in industrial automation had reshaped manufacturing and were extending their reach to a much broader application that implied vast economic opportunities but also a displacement of significant portions of the workforce. We forecast that 20 million manufacturing jobs could be displaced by 2030 and highlighted the need for targeted policies at national and sub-national levels of government to manage the transition. Five years later, robotic innovation has surpassed our expectations in speed, complexity, and impact—fuelled by advances in Artificial Intelligence (AI), particularly generative models and the social implications are more urgent than ever.

What we underestimated

Five years is a long time in technology, and our 2019 launch pre-dated the generative AI revolution. Our quantitative analysis of the impacts of robotics was focused on hardware and industrial uses. While we recognised the huge potential in service applications, we underestimated how quickly advanced AI systems like GPT and DeepMind would mature, achieve mass adoption, and feed back into robotics.

This is a significant aspect of AI manufacturing today. Breakthroughs in reinforcement learning, a machine learning technique to improve robotic programming, have enabled physical robots to make decisions and to perform intricate physical tasks, from hanging t-shirts on coat hangers to making pizza dough. This fusion of generative AI and robots has radically expanded the potential application in business, challenging the assumptions many analysts have long held about the kinds of jobs at risk from automation. “Safe” jobs in finance, journalism, and healthcare diagnostics, are no longer so.

What we got right about industrial automation

We also accurately anticipated robots spilling over into service sectors, where they have not traditionally been applied—but the extent of this shift has been remarkable. AI-driven robots are increasingly visible, providing concierge services, delivering groceries, and caring for the elderly. Humanoid robots like Tesla’s Optimus and SoftBank’s Pepper are blurring the line between tools and colleagues. This development underscores the point we made—no sector is outside scope of robotic automation, and businesses must adapt to compete.  

Lessons from the Leap of AI to robots

Reflecting on these developments in industrial automation and AI manufacturing, there is one striking takeaway: while we correctly identified the potential impact of technological displacement, we underestimated the pace and breadth of disruption it could cause. The exponential improvement in computing power, coupled with the rapid rollout and democratisation of AI tools, have made this powerful resource accessible to startups and SMEs, not just tech giants. The productivity boost could help to offset stagnation in ageing economies like Japan, China, and parts of Europe. These are the tangible benefits brought by the economics of artificial intelligence and industrial automation, which we referred to as the ‘robotics dividend’ in our original whitepaper.

But the societal challenge we highlighted in 2019 has also intensified. The digital divide, a key concern in our report referring to inequality of access to technology and its rewards, has widened. Advanced economies with capital to invest in AI and robots are poised to reap the benefits, while developing nations reliant on low-cost labour may struggle to compete. Within countries, sophisticated, diverse urban agglomerations may thrive, while small towns and rural communities wither.

Refocusing on the path forward

Our analysis consistently shows the economic benefits of technological transformation and industrial automation. But we recognise that the distribution of the economic benefits matters, and the risks of negative social impacts must be taken seriously. The quality of information exchanged between policymakers, tech leaders, businesses, and educators is critical. This is why many of our clients seek our evidence-based, quantitative research to help them improve the quality of dialogue among their stakeholders regarding the economic impacts of technology, AI and robots.

In our 2019 report, we described a world on the brink of transformation. Today we see a global economy shaped by faster, more intelligent, and more adaptable robots—ahead of schedule. Robots are indeed changing the world, redefining what it means to work, create, and innovate in the decades to come. We look forward to working with our clients and collaborators to understand and explain those trends as they evolve in 2025 and beyond.

Note: Our 2019 report, How Robots Change the World was a multi-team collaboration by Oxford Economics, combining the talents of the subject matter experts in our dedicated technology practice, our economic impact analysts, our macroeconomic forecasters, and our city economy specialists. Richard Holt, one of the report’s co-authors and a renowned expert on city economics, sadly passed away this year. We owe him a debt of gratitude for his contribution to this research and many more during his career at Oxford Economics.

This blog is written by James Lambert, Director Economic Consulting, Asia. The team collaborates closely with international businesses in Asia, helping to leverage economic analysis to help them build trust and enhance credibility with their government stakeholders. To discover how Oxford Economics can assist you in using economics to elevate your dialogue with government stakeholders, click here to get in touch.