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We develop a model of endogenous growth with automation to study the impact of industrial robots on growth and labour income. We incorporate human capital accumulation into that framework to examine the role of human capital in sustaining growth without displacing low-skilled labour. While automation replaces low-skilled labour with industrial robots in conducting routine tasks, horizontal innovation creates new varieties in which low-skilled labour has an employment advantage. Labour-augmenting technology takes place to improve productivity of low-skilled labour. As such, those latter types of innovation help counterbalance the adverse effect of automation on low-skilled labour. Human capital, the essential production factor that takes part in every economic activity, including conducting non-routine tasks, accumulates over time through education and training. We show that there exists a long-run equilibrium at which either robots or low-skilled workers are employed, together with hum ....

Endogenous Growth , Orizontal Innovation , Human Capital Accumulation ,