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Mr. Sebastian Webel

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Pictures of the Future
The Magazine for Research and Innovation
 

Autonomous Systems

Robots: Building New Business Models

The robotics market is growing rapidly – be it for industrial, commercial, military or consumer applications.

In 2005 spending on robotic systems was US $11 billion. By 2025 it is expected to reach US $67 billion. But beyond this amazing growth story is the game-changing trend that instead of merely perfoming repetitive tasks, robots are heading for incremental autonomy – a trend that is set to transform not only production and logistics, but business models and user behavior.

Approximately four decades ago, industrial robots began transforming manufacturing. With their mechanical, programmable arms, they performed tasks such as welding, painting, and the lifting and placing of objects, all of which were based on monotonous regularity. Today’s robots perform these tasks and much more. They build cars, remove land mines, assist with surgical procedures  and perform cleaning tasks. The Boston Consulting Group estimates that more than $67 billion will be spent worldwide in the robotics sector by 2025, compared to only $11 billion in 2005.

But automation itself is changing, and experts agree that the next big thing will be the gradual introduction of autonomous systems. What this means is that in the not-too-distant future, robots will no longer require tedious programming. Using machine vision, motion sensors, image and voice recognition, and advanced new software, they will be able to handle increasingly intelligent work, including interacting with and continuously learning from their environment, and especially from people.

Plunging Costs

These performance gains will accelerate growth and help to further reduce prices. While an industrial robot cost an average of $150,000 in 2010, the price had dropped to only $25,000 by 2015 – an 83 percent reduction in just five years. And the trend continues. Although costs may not plunge quite as dramatically over the coming years as in the past, they will likely decrease significantly. Experts predict that high-tech components, especially 3D-cameras, will soon be far less expensive, which means they will be installed in more and more robots. This will make it possible to perform many new functions that previously required costly devices. In addition, algorithm developments now in the pipeline at Siemens could eventually cut the cost of setting up new robotic manufacturing cells by 50 percent.

Machines that Anticipate Human Behavior?

At the same time, computers are getting faster and their application programming more intelligent. Experts with The Boston Consulting Group estimate that, as a result, the tasks performed by robots will increase from ten to 25 percent by 2025. One mundane yet illustrative example is meat processing. Butchering animals is a highly demanding task for traditional robots, because the meat must be cut into very different shapes. This problem can be solved with a system that inspects the pieces of meat in 3D, transmits this data to robots, and then optimally adjusts their cutting guides. This is one example of how robots can become more flexible and refined – a small step on the long road to autonomous systems – which further increases the range of their applications in the textile industry, agriculture, transportation, health care , nursing, and more. Researchers are developing new concepts designed to enable robots to work with people in factories and even anticipate human behavior.

Changing Work Environment

Analysts expect the number of unskilled jobs that involve a large proportion of repetitive tasks to decline worldwide. Experts with The Boston Consulting Group therefore anticipate a paradigm shift. Countries that already have the knowledge and infrastructure in place to enable autonomous systems technology will become more attractive to manufacturers than low-wage countries. Additional factors that are expected to accelerate this trend are declining prices for automation solutions and an increase in the cost of labor. Our aging society and a shrinking workforce will further speed up this trend.

The financial world has been quick to respond to the trend toward robotics. Robo-Stox (ROBO Global Robotics and Automation GO UCITS ETF), an index of companies in the robotics and automation industry, has been in existence since mid-2014. It lists the shares of 79 companies that dedicate their activities partially or primarily to robotics.

Analysts expect the number of unskilled jobs that involve a large proportion of repetitive tasks to decline worldwide.

These firms include Rockwell Automation, the world’s largest manufacturer of automation and information solutions for industrial production, iRobot, known for its vacuum- and floor-cleaning robots, and Intuitive Surgical, a manufacturer of medical robots. Robo-Stox also lists five German groups: Jenoptik, Krones, Kuka, Leoni, and Siemens.

The robotics market has also grown dynamically in Germany, from €6.9 billion in 2005 to €12 billion in 2015.

$40 Billion Market on the Horizon

The introduction of autonomous systems could trigger massive changes in corporate models, and this applies not just to industry and its robots. One example is the market for autonomous vehicles. For instance, Uber, Google and Apple are in the process of developing self-driving cars. Traditional automakers will therefore be facing new competition. After all, as mobility trends continue to evolve, IT expertise will be in as much demand as manufacturing and logistics knowledge. However, software development is virgin territory for automakers.

In addition, autonomous driving will change user behavior, while mobility-on-demand will require new business models. According to a recent study by the Roland Berger corporate consulting firm, autonomous driving will generate an additional sales volume of up to $40 billion in the area of hardware components by 2030. New software solutions for driver assistance systems will grow to a global market volume of up to $20 billion by 2030.

Vehicle automation is an impressive demonstration of how business models – along with our everyday lives – could change. In the future, we will call our cars, or request one from a service provider as needed, and have it drive up to the front door. We’ll get in, set a destination, and the car will drive us there safely – in perfect comfort and without getting stuck in traffic. An on-board computer networked with other vehicles and the traffic management infrastructure will handle everything.

Gitta Rohling