Robots and artificial intelligence are so powerful

Robotics and artificial intelligence are the engines behind the coming fourth industrial revolution

As with previous revolutions, the integration of new technologies can define Industry 4.0, key among them robotics and the Internet of Things. Together, these technologies are expected to create interconnected manufacturing systems that communicate, analyze and use data to create positive feedback loops, adapt to changing demand and increase productivity.

The pinnacle of effective robotics and network integration is the smart factory—a fully automated production facility that uses data from connected devices to learn and adapt. With this predictive flexibility, smart factories can reduce downtime by automatically scheduling repairs and maintenance when input levels are low or finished product levels are high.

This next generation of production comes at a time when trade wars, supply shocks and the pandemic have reminded the global economy of the fragility and interconnectedness of manufacturing networks. Globalization peaked around 2008, after which countries began to reconsider their dependence on international trade, resulting in a decline in the value of global exports relative to GDP. COVID-19 will only accelerate the deglobalization trend. In Thomas Industrial's 2020 survey of 746 manufacturing and industrial companies, 69% of respondents said they wanted to bring production back to the United States, and 55% said they might invest in automation.

Robotics is becoming more cost-effective

As manufacturers look to domestic production, the significant cost difference between human and robot labor is growing. Higher wages for humans make automated labor more attractive as companies look for ways to stay price competitive. In September 2021, the average annual wage in the U.S. manufacturing industry was nearly $50,400, up from $46,600 at the beginning of 2020. So, for example, even though the upfront cost of a complex industrial robot arm is estimated at $250,000, a company might break even in less than 20 years.

As robotics improves in functionality and affordability, these economics may become more attractive. In the past 30 years, the average price of robots has actually dropped by more than 50%, while labor costs have increased by more than 100%. 5 These cheaper robots are significantly more advanced than older versions. In addition to greater dexterity, advanced 3D vision capabilities and replaceable end-of-arm tooling create more dynamic robots that are capable of performing a variety of functions and can be improved through software updates.

Robotics can increase human productivity

Collaborative robots, also known as collaborative robots, work alongside humans on repetitive tasks that are a major cause of boredom and injuries. This combined approach takes advantage of both sources of labor as it reduces error rates while increasing productivity.

Given the world's rapidly aging workforce, increasing automation may be required in the future. The World Health Organization (WHO) predicts that between 2015 and 2030, the proportion of the global population over 60 years old will nearly double, from 12% to 22%. 7 Domestically, as of the 2020 census, the proportion of the population in the age group over 65 years old is higher, reaching 16.3%, and is expected to grow to more than 20% by 2030, exceeding the age group under 18 years old.

This trend is generally positive as it shows that people are living longer and healthier lives due to advances in healthcare. However, as we age, metabolic and cellular decline can impair physical and mental abilities, and the workplace can expose this. Lower individual worker productivity translates into lower national GDP growth. For every 10% increase in the proportion of the population over 60 years old, per capita GDP growth rate will decrease by 5.5%. The adoption of robotics can help offset these declines. A 1-unit increase in robot density (i.e., the number of robots per 10,000 manufacturing workers) increases labor productivity by 0.04%, potentially freeing up labor for use elsewhere in the economy.

Visualize market opportunities

Internet of Things and Cloud Computing

Robots fit perfectly with the topics of Artificial Intelligence, Internet of Things, and Cloud Computing. The IoT topic represents perhaps the greatest integration opportunity, as IoT sensors are at the heart of Industry 4.0 and smart factory trends. As sensor costs continue to decrease, the accuracy and usability of data captured from robotic systems will likely increase. These developments should create a positive feedback loop that spurs robot purchases, as newer sensor packages improve the efficiency of new and old machines.

As the subject of cloud computing matures further, processing power becomes cheaper, allowing AI tools to make faster and more accurate judgments based on sensor data. We expect these insights to drive efficiency gains, while improvements in factory performance can fuel expansion through further robotics spending.

cyber security

The downside to all this connectivity is that manufacturers are often targets of digital intrusions. Due to the increasing cost of malicious activity and the continued integration of technology in production, we expect their response to this growing threat to improve significantly. To this end, increased spending on robotics will require increased spending on cybersecurity programs. Co-location with cybersecurity topics may help reduce cybersecurity risks in robotics manufacturing.