The next 15-20 years will witness the massive introduction of robots – both as consumer robots (including companion robots) and industrial robots as result of the advances in robotics, artificial intelligence and automation. Economists expect this with mixed feelings. While some extort the benefits artificial intelligence and robotics will bring to societies, others predict a darker scenario. The massive introduction of robots and the transition of the economic system to robonomics (robot-based economy) will cause many people to lose their jobs, new jobs would be created, production facilities will scale down and change their geographic location, and the sources of employees’, companies’ and countries’ competitive advantages will change drastically. This will have profound implications on the nature of work, level and sources of incomes, leisure time, politics, international trade and relations, ownership rights, etc., hence leading to major social, economic and political challenges and tension. Societies will be forced to find unconventional solutions to these challenges – birth right patents, universal basic income, constant and fluid free life-long education of population, robot-based tax system, redefinition of human rights, etc. This paper elaborates on the economic principles of robonomics, pinpoints its benefits and challenges, and sketches some of the solutions to its challenges.

1. Robonomics: principles,
benefits, challenges and
solutions
Stanislav Ivanov
Email: stanislav.ivanov@vumk.eu
Web: http://stanislavivanov.com

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Dr. Stanislav Ivanov
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• Professor and Vice Rector (Research),
Varna University of Management,
Bulgaria (http://www.vum.bg)
• Editor-in-chief of the European Journal of
Tourism Research (http://ejtr.vumk.eu)
• CEO of Zangador Ltd.
(http://www.zangador.eu)

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Robots have arrived …
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Source: http://vignette4.wikia.nocookie.net/starwars/images/c/c8/Counterparts.jpg https://en.wikipedia.org/wiki/BB-8

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Source: http://vignette2.wikia.nocookie.net/avp/images/4/49/Terminator.jpg

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Source: http://www.kurzweilai.net/images/robot-thinking-one.png

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Application of robots, AI and
automation technologies:
• Manufacturing
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http://www.businesskorea.co.kr/sites/default/files/field/image/Industrial-Robots-Hyundai-Heavy.jpg

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Application of robots, AI and
automation technologies:
• Warehousing, supply and logistics
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http://spectrum.ieee.org/automaton/robotics/industrial-robots/german-warehouse-robots-tackle-picking-tasks

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Application of robots, AI and
automation technologies:
• Agriculture
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http://sparc-robotics.eu/wp-content/uploads/2014/05/polni-robot-amazone-bonirob-44e031.jpg

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Application of robots, AI and
automation technologies:
• Transportation / Self-driving cars
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http://www.google.com/selfdrivingcar/images/home-where.jpg

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Application of robots, AI and
automation technologies:
• Medicine
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http://vignette3.wikia.nocookie.net/robotics/images/2/21/Medical_robot.jpg/revision/latest?cb=20140602041221

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Application of robots, AI and
automation technologies:
• Warfare
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http://spectrum.ieee.org/automaton/robotics/military-robots/why-should-we-ban-autonomous-weapons-to-survive

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Application of robots, AI and
automation technologies:
• Legal services
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http://www.kurzweilai.net/will-ai-replace-judges-and-lawyers

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Application of robots, AI and
automation technologies
• Hotels
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http://www.mirror.co.uk/news/uk-news/futuristic-hotel-thats-like-robotic-6449905
http://www.h-n-h.jp/en/concept/

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Application of robots, AI and
automation technologies
• Restaurants
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Photo credit: Katerina Berezina

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Application of robots, AI and
automation technologies
• Meetings and events
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https://www.bizbash.com/mobile-telepresence-new-systems-allow-users-participate-meetings-events-afar/gallery/123291

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Application of robots, AI and
automation technologies
• Theme and amusement parks
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Photo credit: Stanislav Ivanov

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Application of robots, AI and
automation technologies
• Airports and other transport stations
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Photo credit: Nicolaus Korab

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Application of robots, AI and
automation technologies
• Travel agencies and Tourist information centres
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Application of robots, AI and
automation technologies
• Museums and art galleries
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https://www.nytimes.com/2017/03/14/arts/design/museums-experiment-with-robots-as-guides.html?_r=0

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Application of robots, AI and
automation technologies:
• Households
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http://www.roboticstrends.com/images/photos/xiaomi-mi-robot-vacuum.jpg

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Application of robots, AI and
automation technologies:
• Search engines
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Application of robots, AI and
automation technologies:
• Social media chatbots
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http://chatbotsmagazine.com

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Application of robots, AI and
automation technologies:
• Finance
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http://static3.businessinsider.com/image/581cd80d46e27a2e008b4cf3-1920/fintech-ecosystem-diagram.png

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Application of robots, AI and
automation technologies:
• E-commerce
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Application of robots, AI and
automation technologies:
• Sex services
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https://www.minds.com/blog/view/638819052533329937

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The tendency to use RAIA in the production
of goods and services will accelerate in the
future until society reaches a point when all
(or an overwhelming share of) goods and
services are produced by RAIA with limited
human involvement. Such an economic
system, based on robots, artificial
intelligence and (service) automation, is
called ‘robonomics’
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Robonomics is an economic
system that uses robots,
artificial intelligence and
(service) automation
technologies as production
factors, instead of human
labour.
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Why robots?
• Robots could work 24/7
• Robots could implement various tasks and expand
their scope with software and hardware upgrades
• Robots could provide constant or improving quality
of their work
• Robots could fulfil their work correctly and in a
timely manner
• Robots could do routine work repeatedly
• Robots do not complain, get ill, go on strikes,
spread rumors, discriminate, quit their job without
notice, show negative emotions, shirk from work
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Why not robots?
• Robots lack creativity
• Robots will not be any time soon completely
independent of human supervision
• Robots lack personal approach
• Robots can orientate in structured situations (at
least for the moment)
• Robots may (will) be perceived as threat by human
employees (e.g. Neo-Luddism movement)
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Principles of Robonomics (1)
• All or most of the products (goods and services) are
produced / provided by robots / artificial
intelligence
• High level of automation
• Fewer but more knowledge-intensive jobs
• Disconnection between employment and incomes -
employment is not the major source of incomes
• Active use of variety of single- and multi-purpose
industrial, service and social robots
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Principles of Robonomics (2)
• High cost-efficiency of production – economically
efficient on-demand single/few unit(s) production
of some goods
• Small and dispersed factories, close to consumers
• High level of standardisation of services – strict
algorithmisation of service provision
• Labour and capital abundance are not competitive
advantages, but knowledge and creativity
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Principles of Robonomics (3)
• Gradual spread of automation / robotisation in
time, industries and countries
• Spill-over effects of automation / robotisation from
developed to developing economies
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Benefits of Robonomics
Improved quality of life in the long term due
to:
• People will be liberated of hard manual labour
• Drastic increase of leisure time
• Time for creative and pleasure activities
• Less (no) work-related stress
• Improved health, increased life expectancy
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Challenges of Robonomics
Short- and mid-term challenges due to:
• Unemployment and relative overpopulation –
fewer human employees and lower salaries:
Frey & Osborne (2013) assess the probability of
computerisation for 702 detailed occupations in the
USA and conclude that 47% of total jobs in the
country are risk of being substituted by AI.
DeCanio (2016) measures the elasticity of
substitution of human labour with robots in the USA
and concludes that it would lead to significant drop in
wages.
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Challenges of Robonomics
• Possible functional illiteracy – humans may forget
how to do things once robots do them
• Division of society between employed and
unemployed
• Changes in social values – is human life valuable?
Do we need other people to satisfy our needs when
we have robots?
• Social unrest and political instability – due to
substitution of human employees with robots
• Migration
• Wars
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Proposed solutions to the challenges
of Robonomics
Prior literature has elaborated on some solutions to
technological unemployment like mandating
employment, government job creation, work sharing,
employment impact statements, tax policies and
financial incentives for job creation, etc. (e.g. Stevens &
Marchant, 2017). These solutions assume that given the
right stimuli the economy will create enough jobs to keep
full employment. However, they may work on the road to
robonomics as tools to mitigate the impacts of
technological unemployment, but not during robonomics
when society reaches full robotisation of economy and
people do not need to work.
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Proposed solutions to the challenges
of Robonomics
• Constant and fluid free life-long education
• Entertainment, tourism, leisure activities,
volunteering
• Universal basic income
• Robot-based taxation
• Birth control / birth right patent
• Redefinition of human rights
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Proposed solutions to the challenges
of Robonomics
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Proposed solutions to the challenges
of Robonomics
Situation Biological right
(reproduction)
Political right
(voting)
Economic right
(basic income)
Outcome
1 Yes Yes Yes Country default
2 Yes Yes No Mass poverty
3 Yes No Yes Country default
4 Yes No No Mass poverty
5 No Yes Yes Demographic crisis
6 No Yes No Demographic crisis
7 No No Yes Demographic crisis
8 No No No Demographic crisis
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• Redefinition of human rights

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Proposed solutions to the challenges
of Robonomics
Only a combination between options [2] and [7]
provides a stable solution
People self-select whether they want the cozy life
without work, but subject to sterilization and without
the right to vote, OR they will not receive any
guaranteed income but will have the right to vote and
reproduce
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Situation Biological right
(reproduction)
Political right
(voting)
Economic right
(basic income)
Outcome
2 Yes Yes No Mass poverty
7 No No Yes Demographic crisis
• Redefinition of human rights

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Proposed solutions to the challenges
of Robonomics
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Forthcoming in 2019 by
Emerald:
Robots, Artificial Intelligence
and Service Automation in
Travel, Tourism and
Hospitality
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Forthcoming in 2019 by Channel
View Publications:
Future Tourism in Robot-based
Economy
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THANK YOU FOR THE
ATTENTION!
QUESTIONS?
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