As one of the key components of the fourth industrial revolution, robotics is set to disrupt...
As one of the key components of the fourth industrial revolution, robotics is set to disrupt many industries across the world.
According to a report from Allied Markets Research, the global robotics market is projected to reach US$189.36 billion in revenue in 2027, up from US$62.75 billion in 2019.
“Robotics technology is the intersection of technology, engineering, and science for producing machines called robots, which are used to replicate human actions,” the report states. The technology is finding its way into a broad range of industry verticals, including healthcare, agriculture and manufacturing.
Here the Investing News Network provides a comprehensive look at what robotics is, 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. The field has 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, “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. The 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.
In August 2021, Tesla’s (NASDAQ:TSLA) Elon Musk unveiled plans for a humanoid robot called the Tesla Bot; it will be designed to take on “dangerous, repetitive, and boring” tasks. The technology will be based on the same microchips and sensors that enable the self-driving features in Tesla’s cars.
What is robotics? Future outlook
The analysts at Allied Market Research expect the economic impact of the COVID-19 pandemic to increase demand for robotics technology in the coming years, especially in key industries such as supply chain management, manufacturing and healthcare. In their opinion, the biggest drivers of this increase demand will be the “need for automation and safety in organizations and availability of affordable, energy-efficient robots,” as well as “increasing labor and energy costs.”
The firm anticipates a marked uptake in robotics tech in emerging economies, especially in the Asia Pacific, which is seen exhibiting a compound annual growth rate of 17.1 percent from 2020 to 2027.
While the hardware segment is expected to garner significant market share, the service segment is projected to witness the highest growth rate due “to high adoption of consulting and training services in the manufacturing sector.” In turn, the manufacturing industry is projected as one of the most lucrative segments of the global robotics market.
However, rises in demand are also expected from the healthcare sector, both for surgery and for the care of elderly and disabled people, as well as in the defense and security sectors, which are expected to further implement robotics for bomb diffusion, mine detection and monitoring.
In fact, the ability of robotics technology to be used for a growing number of different applications across a wide variety of industries is expected to have a huge impact on the growth of this emerging market.
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, some examples in this sector are: Cognex (NASDAQ:CGNX), AeroVironment (NASDAQ:AVAV), ABB (NYSE:ABB), Teradyne (NASDAQ:TER) and Rockwell Automation (NYSE:ROK).
This is an updated version of an article first published by the Investing News Network in 2019.
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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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