As the famous computer scientist Alan Kay said, “the best way to predict the future is to invent it”, and the armies of clever robots imagined by sci-fi writers of the past are now marching into our workplace and homes. This eclectic bunch include automated arms, machine-vision eyes and humanoids. Artificial intelligence, another big sub-sector of the advanced tech universe, has also become integral to many business sectors, including customer service and big-data analytics.
WHAT’S DRIVING DEMAND?
Rising quality and safety standards, as well as the need for productivity and efficiencies are being met with increasingly sophisticated robotics and artificial intelligence. Similarly, changing demographics, such as an ageing population, are increasing the need for robots as carers. The cost of robots has fallen by 27% over the past 10 years and is projected to drop by another 22% over the next decade, while a standard Baxter cobot (a robot designed to work alongside humans) now costs approximately $24,000, compared with a traditional industrial robot at between $100,000 and $150,000.
Although cobots account for just a fraction of global industrial robot sales, less than 5% in 2015, the low cost could revolutionise production and manufacturing.
There were 1,631,600 robot units shipped in 2015, this is forecast to increase to 2,589,000 units by the end of 2019 by the International Federation of Robots (IFR).
Leaders in robot density are currently Germany, Japan and South Korea, and this is driven by the automotive industry. China has the biggest market with a share of 27% of the total supply in 2015.
“The cost of robots has fallen by 27% over the past 10 years and is projected to drop by another 22% over the next decade”
Cost of a standard
Market research firm Tractica projects the industrial robot market may grow to more than $150bn in revenues by 2020, with revenue from non-industrial robots projected to increase from $20bn to $130bn between 2015 and 2020.
Sales growth is forecast to be higher in China than any other country, with sales to Asia and Australia predicted by the IFR to grow from 190,200 shipments last year to 285,700 shipments in 2019 (see chart below). The growth is driven by falling prices of components and advances in processors.
Estimated yearly shipments of multi-purpose industrial robots (100s)
These changes mean the investment universe for robotics has outstripped the broader equity market. The Robotics Investment Universe delivered superior returns of 271% between 1999 and 2016 compared with the MSCI World at 66% according to Credit Suisse.
Changing workplace legislation, demands and demographics will all increase the need for robots, AI and automation.