It is been said that robotics will take part of our daily lives in house automation, and in the workplace with industrial robots, but how close we are to this reality? In this post we make a robotics sector analysis in order to revise its current situation.
According to the IFR (International Federation of Robotics) Press Conference, human-robot collaboration will have a breakthrough between 2016 and 2019. According to the IFR, the demand of service robots for professional use in 2015 increased by 25 percent. The sales value surged to a new record of US$ 4.6 billion. And between 2016 and 2019 estimated sales will rise to an accumulated value of US$ 23 billion.
Automotive and Electrical industries are the main users of this technology due to ease and adaptability of robots. Far from being a threat, the number of employees likewise has increased parallel to the growth of robotic automation.
Robotics sector analysis: who is competing in the robotics market?
In China, the majority of market leaders are foreign firms such as ABB, Comau, Fanuc, Kuka, and Yaskawa. According to the, “Research Report on Industrial Robotics Industry in China 2011-2020,” published by the China Research and Intelligence Co., Ltd, China implemented a guide for promotion and development in 2013, that is still in effect today, with goals for 2020. Under this guide, China will develop between three and five Chinese international firms and about seven robotics related sectors.
In South Korea, the second in market ranking, we can find several firms such as DKSH Korea, ERAP Korea, Goyoung Robotic, Jungsang Lidar, KITECH, and Minirobots. Most of them are firms that were specialised in other sectors in technology but in the last years have become the leaders in the robotic Industry.
Japan has become the third country in the world with more robots per capita, in a quarter of a century, just before South Korea. In the last years, thousands of firms have been born because of the Shinzo Abe Robot Revolution Initiative Policy. In the top ten in Japan we find Yaskawa Electric Corporation, Nachi Fujikoshi Corporation, Epson, Kawasaki Heavy Industries and Fanuc Corporation.
In the Asian robotics market, China takes a clear lead, as evidenced in the chart below, from the International Federation of Robots, especially in recent years. The implementation of the 2013 Robotics Guide, described above, could be a factor in the tremendous growth seen in more recent years. South Korea also shows substantial growth in more recent years, although not as substantial as China. Relatively, Japan’s supply has remained stagnant with limited growth and even a slight decline in 2014.
How are imports and exports affected in robotics?
In this robotics sector analysis we see that the strongest growth figures in Europe are being posted by the Central and Eastern European states. According to the IFR and the European Robotics Association, the rise in exports was about 25% in 2015. Also, in 2016 a similar growth rate is forecasted at 29%. The positive trend is expected to continue. The average growth will remain steady at around 14% per year (2017-2019). The biggest climbers in sales of exports of industrial robots are the Czech Republic and Poland. Between 2010 and 2015 the number of new robot installations climbed in the Czech Republic by 40% Compound Annual Growth Rate (CARG) and in Poland by 26% (CAGR). China has the need for the most global supply. It means that their imports have been increasing over the last few years and it will continue. For instance, growth compared to 2015 has been increasing to 17% and the expectation for 2017 is 30% more.
Generally, Asia has a greater necessity for the global supply in robotics. Korea is a country with significant needs. For instance, between 2014 & 2015, the growth rate recorded was 55%, and the expectation for the next few years is lower but consistent. The same can be said for Japan in 2014 & 2015 with a growth rate of 20%.
What is the demand for robots and who are the major consumers?
As labor costs increase and robotic technology improves, we could conclude in this robotics sector analysis that the demand for robotics increases in areas such as medicine, manufacturing, military, and construction.
Lim Say Leong, Vice President for ABB, says that robots help make businesses more productive and efficient, they can also help companies operate in a more sustainable ways and provide better, safer working conditions for workers.
Apparently the market agrees with Mr. Leong. According to the IFR, demand for robotics is accelerating at a fast pace, with an average of 17% growth per year. The demand has risen from about 15,000 units sold between 2005-2008 to 171,000 units sold between 2010-2014, and with a staggering increase of 15% in 2015 to 253,748 units.
Who are demanding all these robots? By far the biggest consumer of robotics is the automotive industry (about 43% share of the market). The electronics industry takes second place (21% shares) and there are projections for increases in this industry due to increased demand not only for electronic devices but also in order to produce at a lower cost. In lesser amounts, other industries have increased their use of robots as well (21% in 2014). Robotics is clearly the wave of the future that will continue to open up to new markets as they see a need to keep up with their competitor’s lower production costs and ability to streamline through robots.
What are the market barriers? What are the drawbacks?
The so-called Industry 4.0 or Fourth Industrial Revolution will have to face several challenges, such as ethical, legal, and governmental policies, among others. In this robotics sector analysis we identify the following key aspects.
In the coming years, more and more employees will be replaced by AI. A report citing research by Oxford University, said that up to 35% of all workers in the UK, and 47% of those in the US, are at risk of being displaced by technology over the next 20 years. It seems, however, that developed economies are not going to be affected as much as emerging countries. World Bank president Jim Yong Kim said that “data has predicted that the proportion of jobs threatened by automation in India is 69 percent, 77 percent in China and as high as 85 percent in Ethiopia.”*
Legal barriers appear when a new technology starts to become popular and governments need to implement new policies, (i.e. with the invention of the cell phone laws were created to make talking on the phone while driving illegal). This is especially true for an area which will put many people out of work. Nowadays, governments and their economic advisors are contemplating measures in order to protect jobs from the increasing amount of smart machines. On the other hand, Japan’s Ministry of Economy, Trade and Industry (METI) established the Robot Policy Committee in 2004, which states that ‘The METI robots policy guidelines cover many fields of business, technology, innovation and safety, which is essential to the realization of the human-robot co-existence society.’
Lack of knowledge of the robotics market is a factor to take into account, since the tech world is moving so fast and traditional market’s players can’t be updated as easily. Asymmetric information combined with high prices could affect productivity and competitiveness.
What does the future hold of robotics sector?
As far as technological trends are concerned, companies will, in the future be focused on the collaboration of humans and machines, simplified applications, and lightweight robots. The number of industrial robots in the world will grow to about 2.6 million units by 2019, with China leading the market in growth. “Made in China 2025” is a national 10-year plan, aimed at becoming one of the top technological industrial nations. They recognize robots might help the manufacturing sector, improving both quality and efficiency. The increase of total sales between 2016 and 2019 is predicted at 98%.
It is clear that robots will dominate the future and have already begun to do so. In order to stay competitive, companies will need to incorporate robotics into their manufacturing process and technology companies will need to branch into robotics. But there are still many hurdles to cross before robots replace human labor. The future will undoubtedly be shaped by robot and human relationships.