This New Trend Makes Robotics an Industry to Watch

When I say “robots” or “robotics”, what’s the first thing that comes to mind? Do you think of Arnold Schwarzenegger coming back from the future or bad movies on the SyFy network? Or does it stir up images of big bulky machines on assembly lines taking on a role that was once filled by unskilled labor? "Robotics" should conjure images of an industry that will grow rapidly over the next five years. It’s not just the advancement of technology that’s driving the industry, but its also in how we have begun to integrate robots into our everyday lives.

This point was validated by a new report published by Allied Market Research entitled, "Global Robotics Technology Market- Size, Industry Analysis, Trends, Opportunities, Growth and Forecast, 2013-2020." The robotics market is expected to be worth $82.7 billion by 2020 with a year-over-year growth rate of 10.11% from 2014 - 2020. The report highlights that the rise of robots is due to increasing labor costs and a lack of skilled labor across many industries. Automation is seen as a more efficient process. On top of that, robots have gone beyond industrial manufacturing. Allied Market Research findings showed that in 2013, the automotive industry was responsible for a little more than 39% of the global robotics market. The electronics industry came in second just above 20%.

Now robots have begun to insert themselves into our homes, offices and hospitals.

Collaborative Robots are Expanding the Market

The problem with robots in the past – outside of major manufacturing industries like the above-mentioned automotive and electronic sectors – has been cost. Conventional robots are expensive. The International Federation of Robotics (IFR) noted in a recent study that in non-automotive industries there were only 200 robots for every 10,000 workers. Currently, industrial robots can cost well in excess of $125,000, making them unaffordable to smaller and mid-size companies. Now enter collaborative robots.

Collaborative robots or "cobots" are the marriage between humans and robotics where a robot is designed to assist humans perform a specific task, while conventional robots are usually programmed to work autonomously. According to those in the industry, cobots are easy to program and control, and they cost considerably less than their conventional counterparts -- in the range of $20,000 - $25,000. A company can expect to recoup its cobot investment in about three to five years.

The report goes on to say that the growth in the market will be spurred by three sectors or factors in the manufacturing world.With their ease to operate, efficiency, price tag, and their attractiveness to large and small businesses alike, cobots have increased the potential market for robots. According to the ABI Research report “Collaborative Robotics: State of the Market / State of the Art,” the global cobot market will grow ten-fold over the next five years from its current value of $100 million to $1 billion by 2020.

First you will see electronics manufacturers and electronics manufacturing services (EMS) companies - companies that test, make, distribute and repair components for the original manufacturers - expanding their use of cobots. Also, expect to see an increase in robotic use by small- to medium-sized manufacturers who will now be able to compete with larger manufacturers due to the lower robotic costs of cobots. Finally, as Dan Kara, Practice Director for robotics at ABI Research, was quoted in the report, growth would be sparked by manufacturers looking for "robotic solutions optimized to support agile production methodologies."

One other note is that the M&A activity that is running rampant through the robotics industry. In the last three to four years a who's who of the tech elite have been scooping up robotics firms. Facebook, Inc. (FB) and Amazon.com, Inc. (AMZN) have both acquired robotics-related companies. Alphabet Inc.,(GOOG) - the artist formerly known as Google - has gone above and beyond in its desire to get a foothold in the industry. Its bought eight firms in the space.

The Bottom Line

Industry insiders and pundits view the current rise in investments into robotics as the possible foundation for a new kind of manufacturing, especially within the sector of collaborative robots. The key for robotic makers and manufacturers is to get the word out that robotics can be “game changers” in conjunction with human workers and not just their replacements five years down the road. If the message continues to be well received, there could be substantial changes to the dynamics of manufacturing across the globe where smaller companies could compete with manufacturing giants.

By Jason C. Jenkins 

Source: http://www.investopedia.com/articles/investing/101015/new-trend-makes-robotics-industry-watch.asp