December 18, 2018
Factory automation has been around since the advent of the mechanized spinning wheel in the late 18th century Britain, which began the Industrial Revolution. The first robots were introduced by the auto industry in the 1960s, and since then, auto manufacturers and their suppliers have been the largest commercial users of robots. In the last decade, however, advances in technology have enabled robots to address more needs across a greater number of industries.
Historically, their biggest issues have been high cost and lack of flexibility. Over the last 10 years, three technological changes in robotics have increased their flexibility, lowered their cost and expanded their addressable market.
First, suites of sensors originally developed for smartphones and video gaming have been adapted to robotics. The scale of these industries enabled them to invest in rapid advances and achieve lowered costs through mass production that the smaller robotics industry could never have achieved on its own.
Second, improved software is lowering the cost of integration (programming and outfitting the robot to perform its task). Whereas before it may have taken an engineer or computer scientist a month to program a robot, with the newest software a company can use less skilled labor to program the robot in one to two days.
Third, improved and lower-cost grippers are increasing the number of applications that can be addressed with robots. Combined with sensors that provide feedback on the force required to manipulate an object properly, a new generation of grippers have a higher level of dexterity than their predecessors and can perform a larger range of tasks.
Taken together, these three developments lower costs of deployment and expand the addressable market for robots away from just the manufacture of high-volume products with little product variability. They are enabling new categories of robots that serve a wider set of end markets.
Robots today are going through a period of rapid advancement. These improvements are allowing robots to expand beyond their historic market in the auto industry into industries like consumer electronics, logistics and even services. In the coming years, the number of tasks that will be automatable with robotics will likely only increase. We will stay abreast of these changes to determine the longer-term impact of robotics on the investment opportunity set.