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How to Invest in Robotics in Australia
Aug. 28, 2023 01:30PM PST
Australia's robotics sector is growing. How does it stack up to the rest of the world, and is it worth a look from investors?
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The global robotics industry is expected to grow at a CAGR of 17.64 percent through 2028 to reach US$258.36 billion, according to Mordor Intelligence. The robotics sector is also growing in Australia ― but is it a sector worth investing in?
Broadly speaking, robotics is an umbrella term that includes the design, construction and use of robots. This can include core automation and production, industrial software, robot technology and integration of robotics. From drones to self-driving cars to toys, robotics is a growing industry that is beginning to permeate our daily lives. The goal of a robot is to complete a task faster and more efficiently than a human.
The distinction between robotics and AI can be a little confusing, but essentially think of robotics as the body and AI as the brain. Both can exist separately and they are powerful when combined.
How is Australia supporting its robotics sector?
In early 2020, the Robotics Australia Network was formed to accelerate growth of the domestic robotics industry. The network aims to strengthen global competitiveness and cement Australia as a global leader in robotics, and it has released its Robotics Roadmap for Australia 2022 in 2021.
In the document, the network outlined its goals and necessary actions for establishing the country as a leader in supplying robotics and AI products and services by 2030. Some of the key actions in the roadmap include adding artificial intelligence and robotics to the Australian Research Council Science and Research priorities. It also aims to make foreign direct investment easier for the sector, with a goal to see investment in Australian robotics increase to AU$500 million per year by 2024.
The Robotics Australia Network released an update in January of 2023, in which it highlighted its greatest achievement of “seeing the federal government commit to developing a National Robotics Strategy by March this year.” The National Robotics Strategy was opened up to public participation and included workshops throughout April and May of 2023.
According to the January update, the network's 2023 goals are:
- More venture capital investment
- More people working in robotics
- More companies being commercially viable (with a view to scaling to export)
Can Australia's robotics industry compete globally?
According to the International Federation of Robotics, in a 2021 ranking of the average robot density globally, Australia is not even in the top 10. Number one at the time was Korea, followed by Singapore, then Japan. According to the aforementioned report by Robotics Australia Group, Australia’s robot population density — the number of robots per 10,000 workers — was 75, while the world average is 113.
In turn, this means the investment space for pure robotics companies is relatively small, with greater opportunities to invest in broader technology, AI and automation stocks.
How to invest in robotics stocks in Australia?
Robotics stocks in Australia are companies with a strong crossover to other technology sectors like artificial intelligence, cybersecurity and virtual reality. Data for this article was gathered on August 10, 2023, from TradingView.
1. Altium (ASX:ALU)
Market cap: AU$4.89 billion
Altium is an innovative software company focused on 3D-printed circuit board (PCB) design. Altium’s PCB design tool, Altium Design, is used by an array of large robotics companies such as iRobot. They also have two other design tools in their portfolio.
The 2023 fiscal year was strong for Altium, which reported revenue growth of 19.2 percent to US$263.29 million.
2. FBR (ASX:FBR)
Market cap: AU$85.58 million
FBR is a Perth-based robotics company that designs and builds robots for global construction operations. The company's robots are made to work outdoors using FBR's Dynamic Stabilisation Technology.
3. Vection Technologies (ASX:VR1)
Market cap: AU$53.29 million
Vection Technologies is a multinational software company with offices in Western Australia and in Italy. The company uses robotics technology as well as 3D, virtual reality, augmented reality, industrial internet-of-things and CAD solutions for enterprise companies. The business is split into two sections: IT development and outsourced services. The company also collaborates with Autodesk Technology Centers, the Microsoft Mixed Reality Team and Cisco Systems Italy.
How to invest in robotics ETFs in Australia?
Another way to get into the robotics sector is investing in robotics ETFs, a popular choice that offers exposure to the industry of robotics and artificial intelligence rather than a single company. Two major ETFs in the robotics sector are:
This is an updated version of an article first published by the Investing News Network in 2021.
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Securities Disclosure: I, Ryan Sero, hold no direct investment interest in any company mentioned in this article.
