As one of the key components of the fourth industrial revolution, robotics is set to disrupt many industries across the world.
According to a Statista report, the worldwide robotics market is projected to reach US$210 billion in revenue in 2025, up from US$39.3 billion in 2017 and US$100 billion in 2020.
Here the Investing News Network provides a comprehensive look at robotics with an overview of the subject and where it is headed in the future.
What is robotics? Defining an industry
In simple terms, robotics is defined as the branch of technology that deals with the design, construction, operation and application of robots.
However, the field involves several subsets like automation and artificial intelligence (AI). Both automation and robotics have been used interchangeably, but these terms have certain differences.
Automation is the process of using technology to carry out specific tasks, and not all robots are designed for automation. That said, most robots are, especially those with industrial uses.
As Junji Tsuda, president of the International Federation of Robotics (IFR) has put it, “Robots evolve with many cutting edge technologies.” He added, “Industrial robots are a crucial part of the progress of manufacturing industry.”
The automotive industry is the largest sector to use industrial robots, as the manufacturing of cars has become more complex in recent years. IFR notes that various manufacturers have embraced automated solutions and are using robots to finish “substantial portions” of manufacturing.
The electronics and metals industries are the other largest users of these autonomous robots.
Industrial robotics represents one dimension of this vertical, but the space as a whole includes a number of other branches, including: unmanned aerial vehicles, autonomous cars (or self-driving cars), surgical robots and nanorobotics.
Unmanned aerial vehicles — or drones more commonly — is a field covering aerial robotics. While initial uses were related to the military, commercial applications have become increasingly popular.
Autonomous cars, or self-driving cars, are capable of detecting their surroundings with little or no human input. The potential benefits of autonomous vehicles include increased mobility and reduced costs, but they have problems related to legal framework and safety.
As compared to other branches of the industry, robotic surgery is more mature, and technology has been developed for many types of surgery, including cardiac, spinal and endoluminal procedures. Despite being an emerging field, nanorobotics or nanobots — robots at nanoscale sizes — are increasingly becoming popular in the medical field.
Additionally, there are humanoid robots that are capable of performing complex tasks while providing companionship and entertainment.
Sophia, an AI robot developed by Hanson Robotics, is a prime example of machine learning and robotics coming together to form a human-like robot. Sophia was granted Saudi Arabian citizenship and has made numerous public appearances across the globe.
What is robotics? Future outlook
The 2019 World Economic Forum (WEF), held in Davos, Switzerland, with over 100 government and business leaders in attendance, had an overall focus on “Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.”
Klaus Schwab, executive chairman of the WEF, said at the opening ceremony that Globalization 4.0 has to be more human centred.
“We are now in some ways in a battle between robots and humankind,” Schwab said. “We don’t want to become slaves of the new technologies.”
While the theme of automation resonated throughout the event, the New York Times reported that several corporate executives at the event have bet big on machines to replace humans.
In its Future of Jobs report, released in 2018, the WEF states that half of all companies think that automation will reduce their workforce by 2022, with 75 million jobs set to be displaced. At the same time, more than 133 million jobs are expected to be created as a result of automation, but they will have be shared between humans, machines and even algorithms.
There have been several reports on the potential for job losses as the deployment of robotic technology increases. In fact, Dimitar Raykov and Mubashar Iqbal have created a site that predicts the likelihood of robots replacing a number of varying job positions.
According to Fior Markets, the global robotics market is expected to grow at a compound annual growth rate of 19.11 percent between 2018 and 2025 to reach revenues of US$158.21 billion. This growth will be tied to the rising adoption of the technology across a wide range of industries, including defense and security, manufacturing, electronics, automotive and healthcare.
What is robotics? Ways to invest
With such growth predicted across the robotics industry, and with companies betting on automation, there are plenty of ways to invest in the sector, including:
For those that are new to the space, exchange-traded funds (ETFs) are a popular choice as they allow exposure to an entire industry rather than one single company.
There are five options, including: the Robo Global Robotics & Automation ETF (ARCA:ROBO), the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ), the First Trust NASDAQ Artificial Intelligence and Robotics ETF (NASDAQ:ROBT), the Direxion Robotics, Artificial Intelligence & Automation Index Bull 3X Shares (ARCA:UBOT) and the iShares Robotics and Artificial Intelligence (ARCA:IRBO).
For those looking to invest in a specific company, examples in this sector are as follows: Cognex (NASDAQ:CGNX), iRobot (NASDAQ:IRBT), ABB (NYSE:ABB), Rewalk Robotics (NASDAQ:RWLK) and Rockwell Automation (NYSE:ROK).
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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