Robots By The Number

The industrial robots boom 2019. The number of industrial robots deployed worldwide will increase to around 2.6 million units by 2019. That’s about one million units more than in the record-breaking year of 2015.

In 2017, robot sales increased by 30% to 381,335 units, a new peak for the fifth
year in a row. The main drivers of this exceptional growth in 2017 were the metal
industry (+55%) and electrical/electronics industry (+33%). Robot sales in the automotive industry increased by 22% and remained still the major customer of industrial robots with a share of 33% of the total supply in 2017.

The electrical/electronics industry has been catching up, especially since 2015. In 2017, it reached almost the same share of total supply (32%). The electrical/electronics industry became the most important customer in almost all major Asian markets, e.g. China, Japan, Republic of Korea, already in 2016.

Since 2010, the demand for industrial robots has accelerated considerably due to the ongoing trend toward automation and continued innovative technical improvements in industrial robots. Between 2012 and 2017, the average robot sales increase was at 19% per year (CAGR). The number of robot installations had never increased so strongly before. Between 2005 and 2008, the average annual number of robots sold was about 115,000 units. 2009 however, was not an ordinary year because of the global economic and financial crisis which caused an exceptional plunge in robot sales that year.

In 2010, investments which had been restrained in 2009 were the main driver of the significant increase in robot sales. Between 2011 and 2017, the average annual supply doubled to about 236,000 units compared to the average annual supply between 2005 and 2008. In the past three years (2015-2017) the average annual increase was about 310,000 units.

This is a clear indication of the tremendous, accelerating rise in demand for industrial robots worldwide.

Robot density in the United States manufacturing industry reached 200 robots per 10,000 employees in 2017, according to the International Federation of Robotics. That number is an increase from 189 robots in 2016 and 176 robots in 2015.

Robot density is a measurement that tracks the number of robots per 10,000 workers in an industry. While the US ranks 7th in the world in robot density, it has quite a ways to go to catch up to The Republic of Korea (710) and Singapore (638) that continue to rank first and second worldwide.

Based on the IFR’s initial numbers, there were no changes to the order of the top seven countries with the highest robot density. All seven countries saw the number increase. Here’s how the countries performed in 2016 and 2017.

The IFR points out that the robot density in the US manufacturing industry is more than double that of China, which ranks 21st in the world with a robot density of 97.

The IFR, which will discuss robot density in more detail at Automate 2019 in Chicago, says the trend to automate production in both domestic and global markets is the main driving force of robot installations in the US. The general industry sector, particularly the food and beverage industry (+64%) and the plastic and chemical products industry (+30%), had the highest growth.




Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals



Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals
Robotics Market Map: 80+ Robot Startups Working In Factories, Homes, And Hospitals



How Fast is the Robotics Industry Growing?



Perhaps the most interesting way to peek into the future of industrial robot installations is to look at potential sales in China.

Currently, the world’s most populous nation has a density of robots that is about half of the world average, equal to just 36 robots for every 10,000 manufacturing workers in China.

However, this is changing fast. It’s been the largest market for robots since 2013, and in 2014 the country bought 57,100 robots – the highest quantity ever recorded in a year. By 2018, one in every three robots in operation around the world will be in China.

What will happen if China’s density approaches that of other robot industrial centers?

Highly automated countries such as Germany, Japan, and South Korea all have robot densities that are multiples higher. South Korea, for example, has 478 industrial robots for every 10,000 workers – a ratio that is 13x higher than China’s.

With this kind of potential for growth, it’s clear that this is only the start of the robot story.

Welcome to the Future: Investing in Robots


Robots are going mainstream. Becoming more affordable and easier to program, they are widely present in our everyday life. You name the field, the robots are there: agriculture, tourism, e-commerce, medicine… They even help with household chores. With the accelerating speed of robotics development, it appears a very tempting field for investment. Last month, Credit Suisse’s Global Equity Research team published a report examining its potential.

We have already accepted big robots working in agriculture (e.g. milking systems) or the automotive industry (e.g. car assembly), but with their components devices becoming smaller and more precise, the robots should follow suit. Some of them, such as smartphones or sensors in cars, have already become an integral part of our lives; others, such as robots with tactile sensing, are still on the way. What is more, we can only try to guess what projects are running in the labs.

The Changing Perception

Thanks to advances in technology, robots are being used in fields traditionally occupied by humans. These days, machines not only move heavy pallets, but also pick tomatoes, pass credit cards and serve lattes. Unmanned aerial vehicles (UAVs), aka drones, instead of a postman, take care of same-day parcel deliveries. A driver’s licence may no longer be necessary to travel by car. Artificial Intelligence (AI) allows companies such as Volvo, GM, Audi, Nissan and BMW to work on fully autonomous cars. They are expected to go into production within five years and Google is set to release its autonomous hybrid Toyota Prius in 2018.

Not only robots have been changing. Our perception of them has been changing as well. Some things which would have never been accepted a decade ago are now taken for granted. And the trend is certain to continue. “This is a sensitive area,” says Peter Hensman, global strategist at Newton, “How would people feel if their healthcare assistant was a robot? Perhaps not terribly comfortable. However, attitudes can change. People would once have been very uncomfortable with voice recognition systems but these applications are now commonly used by many without a second thought. A lot depends on perception and comfort with these new concepts.” The statistics prove that the shift in our perception is happening already: the number of surgical procedures performed with the help of robots to provide greater precision increased 16 percent in Q1 2016 compared to Q1 2015



Why Robots?

Robots are present not only where strength or precision is needed. With shrinking farmland, growing populations and the need to increase food supplies, agriculture is another field likely to benefit from robot use, such as driverless tractors, drones, or swarm robots for the harvest season. They could cut costs and be suitable even for indoor farming. According to the “Agricultural Robots” report by Tractica, by 2024 annual shipments of these robots are likely to reach 992,000 from 33,000 in 2015.

Personal household robots help us with the “dirty work.” At the Starwood Hotel in Palo Alto, California, robots exchange towels, and robot vacuum cleaners are sold widely both in Europe and the US. There is also Jibo, a “family robot” designed by the Massachusetts Institute of Technology which recognizes different family members and reads stories to children.

In the mainstream consciousness, robots are R2-D2 creatures, but one cannot forget that they are much more. Leaving the hardware part aside, every robot needs an operating system which enables it to perform its actions. For example “driverless cars need a software to control them,” says Uwe Neumann, Credit Suisse Equity Research Analyst, “The fact the car is produced by Mercedes doesn’t mean Mercedes produces the software. It is produced by companies which specialize in it.”

Investors Goldmine?

Although probably still some way from its full investment potential, the robot sector seems promising for further development. “We can observe positive trends in this market. For now it is more of an evolution, but it is accelerating,” says Neumann.

Tractica estimates that the next five years will revolutionize the way we think about robots. Non-industrial robot revenues are likely to grow 10-fold within this period, and with the development of AI, Big Data Analytics and the Internet of Things we will start to perceive robots not only in hardware, but also in software terms. For investors it is an important hint.

Governments Want to Invest

The potential of robotics has been already recognized by some governments. Japanese prime minister Shinzo Abe proposed including it in the country’s growth plan. Launched in 2014, the plan assumed 20-fold growth in the use of robots in agriculture and two-fold in manufacturing by 2020. With Japan’s population declining, robots should help boost productivity. Although people are afraid of job losses, robots could take on the dangerous and dirty jobs which humans should not or do not want to perform.

Where to Invest?

“Around the world, new players and markets are emerging to assume an important role in the ongoing development of the robotics industry,” says Tractica research director Aditya Kaul. “Technologies like AI, machine vision, voice and speech recognition, tactile sensors, and gesture control will drive robotic capabilities far beyond what is possible today, especially in terms of autonomy.”

With advancing technology, robotics opens a new investment world with plenty of options. One can invest in hardware or software, both on the rise. “Given the variety of potential capabilities, investing in different application segments of the robotic market makes most sense,” claims Neumann. Both big players on the market and startups which offer tempting high-yield investments and a group of future-oriented investors in robotics are growing.

The future is here. It seems that robots will stay with us for good and that they will become more and more advanced. The robotics evolution definitely provides some food for thought for every investor.