Experts predict rise of the robots

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Published: Tuesday 10th February 2015 by The News Editor

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Cheaper and better robots will replace humans in the world’s factories at a faster pace over the next decade, driving down labour costs by 16%, a report has said.

The Boston Consulting Group predicts that investment in industrial robots will grow 10% a year in the world’s 25-biggest export nations up to 2025, up from 2% to 3% a year now. The investment will pay off in lower costs and increased efficiency.

Robots will cut labour costs by 33% in South Korea, 25% in Japan, 24% in Canada and 22% in the United States and Taiwan. Only 10% of jobs that can be automated have already been taken by robots. By 2025, the machines will have more than 23%, Boston Consulting forecasts.

Robots are getting cheaper, the report says, with the cost of owning and operating a robotic spot welder, for instance, tumbling from 182,000 dollars (£120,000) in 2005 to 133,000 (£87,500) last year, and will drop to 103,000 (£67,700) by 2025.

And the new machines can do more things. Old robots could operate only in predictable environments, but the newer ones use improved sensors to react to the unexpected.

In a separate report, RBC Global Asset Management notes that robots can be reprogrammed far faster and more efficiently than humans can be retrained when products are updated or replaced – a crucial advantage at a time when smartphones and other products quickly fade into obsolescence.

“As labour costs rise around the world, it is becoming increasingly critical that manufacturers rapidly take steps to improve their output per worker to stay competitive,” said Harold Sirkin, a senior partner at Boston Consulting and co-author of the report.

“Companies are finding that advances in robotics and other manufacturing technologies offer some of the best opportunities to sharply improve productivity.”

Boston Consulting studied 21 industries in 25 countries last year, interviewing experts and clients and consulting government and industry reports.

The rise of robots will not be limited to developed countries with their ageing, high-cost workforces. Even low-wage China will use robots to slash labour costs by 18%, Boston Consulting predicts.

Increasing automation is likely to change the way companies evaluate where to open and expand factories. The report expects that manufacturers will “no longer simply chase cheap labour”.

Factories will employ fewer people, and those that remain are more likely to be highly skilled. That could lure more manufacturers back from lower-wage emerging market countries, the report says.

Published: Tuesday 10th February 2015 by The News Editor

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