PRAGUE — When Zbynek Frolik needed new employees to handle surging orders at his cavernous factories in central Bohemia, he fanned advertisements across the Czech Republic. But in a prosperous economy where nearly everyone had work, there were few takers.
Raising wages didn’t help. Nor did offers to subsidize housing.
So he turned to the robots.
“We can’t find enough humans,” said Mr. Frolik, whose company, Linet, makes state-of-the art hospital beds sold in over 100 countries. “We’re trying to replace people with machines wherever we can.”
Such talk usually conjures visions of a future where employees are no longer needed. In many major economies, companies are experimenting with replacing factory workers, truck drivers and even lawyers with artificial intelligence, raising the specter of a mass displacement of jobs.
But in Eastern Europe, robots are being enlisted as the solution for a shortage of workers. Often they are helping to create new types of jobs as businesses in the Czech Republic, Hungary, Slovakia and Poland try to stay agile and competitive. Growth in these countries, which became low-cost manufacturing hubs for Europe after the fall of Communism, has averaged 5 percent in recent years, buoyed by the global recovery.
Few are riding higher than the Czech Republic, where plants roll out cars for the likes of Toyota and consumer electronics for Dell, while smaller companies produce specialty goods to sell around the world. A roaring economy has slashed the jobless rate to just 2.4 percent, the lowest in the European Union.
The dearth of manpower, however, has limited the ability of Czech companies to expand. Nearly a third of them have started to turn away orders, according to the Czech Confederation of Industry, a trade group.
“It’s becoming a brake on growth,” said Jaroslav Hanak, the organization’s president. “If businesses don’t increase robotization and artificial intelligence, they’ll disappear.”
Eastern Europe’s factories are already well automated. New robot installations in the Czech Republic rose 40 percent between 2010 and 2015, according to the International Federation of Robotics. Today there are around 101 robots for every 10,000 workers. And more machines are coming as companies try to improve productivity, tilting them toward levels in countries like Germany, which averages 309 robots per 10,000 workers, the most in Europe.
At Elko EP, which makes industrial timers for companies like General Electric, 70 percent of production is automated, and the company is aiming to be almost fully robotized in a few years. In a sleek white corner of the factory, robots have taken over routine manufacturing tasks. Jiri Konecny, the company’s chief executive, moved factory floor workers to more complex roles, and focused hundreds of other employees on research and development.
“If we didn’t invest early in automation, we’d be dead by now,” he said.
For the Czech Republic and its neighbors, the calculus is one of survival. A new generation of robots is needed not just to confront the labor squeeze, but also to increase flexibility and output as consumers demand a wider range of products.
On a recent afternoon in Brno, the nation’s second-largest city, hundreds of suppliers showed off articulated robots, robotic sensors and other wares in a hall as big as an airport at Amper, an automation convention. Buyers crowded around “smart” machines that tested car headlights or interacted with humans in shared work spaces.
Many are doing brisk business as companies around Eastern Europe accelerate an automation drive. At Rittal, a maker of switch gears and control cabinets for industrial robots, orders rose 15 percent last year and have jumped 25 percent since January.
“Companies aren’t able to produce more, so their competitiveness is falling,” said Jaromir Zeleny, Rittal’s managing director. “They don’t want to be so dependent on people.”
Cost is another factor. Eastern Europe became a manufacturing powerhouse by luring multinationals with low wages. That advantage is ebbing, though. Average monthly pay in the Czech Republic rose 8 percent last year to about 1,160 euros, or about $1,400. Although one-third the average in Germany, they are expected to keep climbing.
Businesses say letting in more foreign workers would help. But the conservative government has pledged to limit immigration, and recently set strict caps on foreign work visas.
There are longer-term trends at play, as well. Families aren’t having children fast enough to replace people heading into retirement. Automation, one argument goes, could compensate. Skoda, the nation’s biggest automaker, said last month that it would “significantly accelerate” automation to face demographic changes and wage pressures.
“A labor shortage will continue for years,” said Bohdan Dovhanic, a Prague-based business director at Schneider Electric, a French industrial company. “We must be prepared to find more human employees, or find a way to substitute for them.”
Whether robots will help or threaten human livelihood has sparked a fierce debate in a country that coined the term. The word “robot,” derived from the Slavonic term “rabota,” meaning arduous work, first appeared in a 1920 Czech play about machines created to perform repetitive factory tasks. The robots cooperate at first, but eventually take over.
The risk, critics say, is that when future recessions hit, workers will suffer. “You won’t switch off the robots and bring back people,” said Michal Pechoucek, head of the Artificial Intelligence Center at the Czech Technical University in Prague.
Czech unions echo those warnings. “Unless business leaders, politicians and trade unions react well in advance and responsibly to the upcoming industrial revolution,” said Josef Stredula, president of the Czech-Moravian Confederation of Trade Unions, “even more jobs may be under threat.”
For now, companies here insist that robotization will create new work.
At Linet, the hospital bed manufacturer, most welding, cutting, painting and molding functions were automated a decade ago. Thirty industrial robots do the work of up to 200 people. But that doesn’t offset the need for humans, who program machines and perform complex custom work on the assembly line that robots can’t do.
Like other employers, Mr. Frolik was caught off guard when joblessness fell swiftly. Virtually every part of the Czech economy has been affected. In the industrial countryside north of the capital where his factories are, unemployment is below 2 percent. And in Prague, even the trams have run less frequently this year for want of drivers.
Mr. Frolik started Linet after the Czech Republic’s 1989 Velvet Revolution with a $10,000 investment in an old cow barn. Today, Linet is one of the world’s biggest hospital bed makers, with 900 employees making 500 beds a day. Its devices monitor and collect data on patient health, and can cost as much as a BMW. A Linet bed, Mr. Frolik said with a chuckle, even appeared in an episode of the Netflix show “House of Cards” in which Kevin Spacey’s character, President Frank Underwood, was recovering from an assassination attempt.
To keep up with a surge in orders driven by the global recovery, he needs more people. He raised wages 12 percent last year and tried to poach employees from other factories, but it wasn’t enough, and he didn’t have the production capacity to bid on major government contracts.
“We could be growing much more,” Mr. Frolik said.
So he put in an €8 million order last month for superfast robotic lasers and plastic molding machines to replace older models. The new devices will let him move six workers to the custom assembly line. But with other Czech companies also scrambling to upgrade, he’ll have to wait for delivery of the machines.
Mr. Frolik stopped before a hulking industrial laser that would eventually be replaced by a faster, smarter machine. The two employees operating it would be educated for other work at the factory inside the old cow barn, which has been converted into a training center.
“We’ll still need people,” Mr. Frolik said. “But robots are more reliable.”
Hana de Goeij contributed reporting.