Automation Incentives: What are They and Why Do They Matter

Seize the future or be left behind - that's the sentiment that seems to be cooking under the push towards automation, but in reality, there’s more than that.

On top of the eternal pursuit of productivity, automation impacts areas that range from economic growth and labor markets to geopolitical agendas and national security. 

What is clear, however, is that 2023 is the year to embrace automation. 

As technology matures and the private and public sectors pour incentives into automation, companies face a unique opportunity to innovate and improve their performance like never before. 

In this article, we’ll dissect the topic of automation incentives, and provide you with definitions, benefits, examples, and other useful information to enable the next generation of businesses.

What are automation incentives?

Automation incentives are anything that drives organizations and individuals to start automating work-related tasks and processes, including financial backing, access to tools, and training programs, among others.

There are many types of automation incentives, including:

• Public incentives: offered by national, regional, and local governments.

• Private incentives: offered by private companies.

• Formal incentives: such as financial help in the framework of a specific program.

• Informal incentives: such as the prospect of increasing productivity. 

• Short-term incentives: such as cost-saving implementations that can be rolled out in days instead of weeks.

• Long-term incentives: such as the possibility of fostering creativity in the workplace. 

This definition encompasses automation incentives that range from purchasing hardware and equipment to enrolling employees in training programs and acquiring dedicated automation software. 

Taking the above into consideration, let’s take a look at real-life examples of automation incentives.

Automation incentives examples

Nowadays, there are plenty of automation incentives to choose from. Some are direct, while others are indirect - usually, belonging to broader incentive packages to support the acquisition of software in general (including automation software). 

Automation incentives from the public sector

National and regional governments from all over the world have been offering incentives to automate for quite some time. 

These incentives are usually explicit but sometimes can be part of broader incentive programs.

For example, the US federal tax code provides no explicit incentive for businesses to automate, but the IRC section 168(k) allows companies to deduct the cost of certain assets (such as software) in the year they’re placed in service. 

State governments in the US are more straightforward when it comes to offering automation incentives. 

For instance, the Automation Training Incentive Program by the Minessota government offers grants of up to $35,000 to train workers in automation technology. 

Similar automation incentive programs are currently being offered by the US states of Iowa, North Dakota, and Delaware, among others.  

The phenomenon is not exclusive to the US public sector. Countries as diverse as Malaysia and Australia have their own automation incentive programs as well!

Automation incentives from the private sector

Private companies are also interested in fostering the adoption of automation technology and offer incentives like free training programs, credits, and free access to tools and platforms. 

The Make Academic Alliance is a good example of such an incentive. 

The program provides higher education institutions, student organizations, and other educational organizations with tools to understand the concepts of no-code, workflow, and process automation through a hands-on experience that includes teaching materials, guest lectures, and access to professional Make plans for free. 

Needless to say, we’re not the only company offering automation incentives out there. 

Microsoft, for instance, has released an incentive program to help startups automate feature implementation, offering free access to ChatGPT, Azure OpenAI service, and DALL·E 2. 

On top of tech companies, EdTech platforms like Udemy also offer a series of free automation courses that anyone can enroll in.

Source: Udemy

Short and long-term automation incentives

The short-term automation incentives are easier to identify than the long-term ones. 

First of all, automation technology in itself provides a lot of these right off the bat: Increased productivity, reduced costs, fewer errors in processes, and so on. 

Second, most government and private incentive programs are designed to have an immediate impact - grants are paid within the fiscal year they’re assigned, and other benefits are usually delivered within weeks of being requested. 

Long-term automation incentives are subject to changing conditions and trends. A good example of this is the sharp decline in birth rates the world has been experiencing for the past decade.

Source: World Bank

The economic impact of such an event is predicted to lead to a reduction in the number of workers, a situation that automation could help remediate.

Why are automation incentives important?

Speaking strictly about business, automation incentives are vital in helping companies transition to more productive, cost-efficient operations by reducing the main barriers of entry: Initial investment and employee training. 

On top of this, making automation more accessible is how many countries try to advance their companies into global markets, where competition is fierce and technological imbalances play an important role.

To conclude, the proliferation of automation incentive programs offers a hint of how important automation has become. The governments and companies are no longer passive observers, but active participants wielding policy, capital, and resources to boost the adoption of automation.

In other words: It's not just about technology - it's about shaping the very fabric of modern society.