CapitalX is a corporate strategy and advisory firm, with a focus on tech www.capitalxpartners.co
2020 marks one hundred years since the word “robot” was first coined by science fiction playwright, Karel Capek. Forty years later, in 1961, General Motors installed the worlds first industrial robot, paving the way for automated manufacturing and the era of programmable machines.
Today, the global Industrial robot market is worth c.$48bn pa and demand for robotic technology is accelerating rapidly. This is on the back of the Fourth Industrial Revolution and advancements in digital technologies which are democratizing access to robot technology.
In this article we analyze the growth in the global robotics market, identifying key trends driving demand:
Introducing a new generation of “Advanced” Robots
Digital technologies have evolved, allowing robots to marry physical automation with machine vision and intelligence. As a result, a new breed of “Smart” Robots are expanding the use case for robotic automation, driving the technology into new applications and under-penetrated markets.
These “Traditional” Robots were expensive and lacked capabilities, effectively limiting adoption to a handful of heavy industries.
However; the latest generation of “Advanced” Robots incorporates the full technology stack, combining physical automation with digital efficiency. As a result, Advanced robots are able to generate value where Traditional Robots could not.
While global wages have steadily been ticking upward, industrial robot prices have fallen rapidly, reducing at a CAGR rate of 6.8% since 1995.
At the same time, robotic systems have become easier to install, quicker to program and cheaper to operate. As a result, the barriers to wider adoption are driven lower each year.
As robot prices continue to decline, we anticipate two major inflection points:
When industrial robots were first introduced in the 1970’s, the average robot arm utilized a relatively crude 5 axis design, which allowed limited range of motion. Fast-forward to today and most modern robot arms now utilize over 30 axis in their design.
Whilst it is clear that these improvements in hardware design have played a key role in expanding overall robot dexterity, the real advances towards precision movement can be attributed to innovations in machine learning and sensor technology.
This is particularly evident in the advances made in robots specifically designed for picking and sorting. In 2015, sorting robots could pick and place around 25 items per hour, however today these robots are able to pick and place well over 200 items per hour. Further advancements in the next three to five years, should see picking speeds advance past human capabilities, which would signal a significant inflection point for industrial automation
This burgeoning demand for robot technology is reflected in a 28% compound annual growth rate in global robotics sales since 2015 — a steep change from the 9% growth rate over the previous decade.
The largest growth vector has been emergence of Professional Service Robots (PSR), from a non-existent category in 2015 to a market segment that now matches Industrial Robot in unit sales.
Going forward, it is clear that we have only peeled past the first layer of potential, promised by “Advanced” Robotics.
The New Growth Engine
Logistics and warehousing is one of the industries at the forefront of robotics evolution, ever looking for more efficient methods of storing, tracking and retrieving inventories.
In Part Two (Coming soon) , we take a deeper dive into robotic automation in the logistics sector, dissecting the trends driving the market and identifying which companies are positioned to benefit from this growth.
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About CapitalX Partners
CapitalX is a corporate strategy and advisory firm, with a specialized focus on innovation and technology.
We use market research and data science to gain perspective on market opportunities and business challenges. These insights allow our clients to de-risk key decisions and execute strategic initiatives with confidence.
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