Demand For Collaborative Robots Continues To Grow

collaborative robots, cobots, robots, manufacturing, industry, automation
Krisztian Bocsi/Bloomberg

The trade war between China and the U.S. has hit hard at robot sales and orders, at least for the moment. The Robot division of the Fanuc Group showed revenues down 11.5% for the six months ending September 2019, compared to the previous year. At ABB, orders at the Robotics & Discrete Automation division were down 18% in the third quarter, while revenues were down 6% in revenues. At the Yaskawa Group, robotics sales were down 9% for the six months ending August 2019.

One exception to this negative trend was Teradyne, which makes collaborative robots (cobots)–that is, robots designed to perform tasks alongside human workers, rather than being fenced off. Teradyne’s third quarter results showed industrial automation revenues up 4% over the previous year, driven by strong growth of collaborative autonomous mobile robots. On October 21, Teradyne further announced plans to acquire a maker of high-payload autonomous mobile tuggers and forklifts, suitable for larger operations.  

Teradyne’s results reflect bigger trends, since installations of collaborative robots, while still relatively small, are growing at a much faster pace than traditional industrial robots. According to just-released data from the International Federation of Robotics, the number of cobots installed in 2018 was 23% higher compared to 2017. By comparison, traditional industrial robot installations only rose by 5% in 2018.


Why the continued growth in demand for collaborative robots? “These products are incremental automation alternatives for smaller companies,” said Mark E Jagiela, CEO and president of Teradyne in a July 2019 phone interview. “We are democratizing automation.”

Building a whole automated factory is a huge task. By comparison, cobots represent a smaller investment that can be used to address specific problems like a lack of labor or the need to maintain quality in repetitive tasks. “The ripest opportunities to automate are the very mundane repetitive tasks that require zero thinking,” said Jagiela. “Moving a kit of parts from warehouse to assembly line is something you could almost do comatose.”

Targeted use of collaborative robots can free up workers for higher-value, better-paid tasks, without the need to completely reconstruct the whole production process. To put it another way, collaborative robots are complements to mid-skilled workers, rather than substitutes. Collaborative robots lower the cost and price of the final product, raising demand and creating the potential for increased employment of mid-skilled workers.

The best example we have so far of the job-creating potential of collaborative robots comes not in manufacturing but in ecommerce. Amazon’s use of collaborative warehouse robots has enabled the ecommerce leader to dramatically reduce the cost of rapid fulfillment and free returns. These features, in return, have attracted millions of consumers to ecommerce and created hundreds of thousands of jobs–more than enough to make up for the lost jobs in brick-and-mortar retail. Overall the consumer distribution sector, including retail and e-commerce, has added 195K jobs over past year, making it a major contributor to job growth (chart).

The results suggest that collaborative robots may benefit labor wages and job growth, just as assembly lines did in an earlier age. “Automation is the enabler, not the enemy,” said Jagiela.

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The trade war between China and the U.S. has hit hard at robot sales and orders, at least for the moment. The Robot division of the Fanuc Group showed revenues down 11.5% for the six months ending September 2019, compared to the previous year. At ABB, orders at the Robotics & Discrete Automation division were down 18% in the third quarter, while revenues were down 6% in revenues. At the Yaskawa Group, robotics sales were down 9% for the six months ending August 2019.

One exception to this negative trend was Teradyne, which makes collaborative robots (cobots)–that is, robots designed to perform tasks alongside human workers, rather than being fenced off. Teradyne’s third quarter results showed industrial automation revenues up 4% over the previous year, driven by strong growth of collaborative autonomous mobile robots. On October 21, Teradyne further announced plans to acquire a maker of high-payload autonomous mobile tuggers and forklifts, suitable for larger operations.  

Teradyne’s results reflect bigger trends, since installations of collaborative robots, while still relatively small, are growing at a much faster pace than traditional industrial robots. According to just-released data from the International Federation of Robotics, the number of cobots installed in 2018 was 23% higher compared to 2017. By comparison, traditional industrial robot installations only rose by 5% in 2018.


Why the continued growth in demand for collaborative robots? “These products are incremental automation alternatives for smaller companies,” said Mark E Jagiela, CEO and president of Teradyne in a July 2019 phone interview. “We are democratizing automation.”

Building a whole automated factory is a huge task. By comparison, cobots represent a smaller investment that can be used to address specific problems like a lack of labor or the need to maintain quality in repetitive tasks. “The ripest opportunities to automate are the very mundane repetitive tasks that require zero thinking,” said Jagiela. “Moving a kit of parts from warehouse to assembly line is something you could almost do comatose.”

Targeted use of collaborative robots can free up workers for higher-value, better-paid tasks, without the need to completely reconstruct the whole production process. To put it another way, collaborative robots are complements to mid-skilled workers, rather than substitutes. Collaborative robots lower the cost and price of the final product, raising demand and creating the potential for increased employment of mid-skilled workers.

The best example we have so far of the job-creating potential of collaborative robots comes not in manufacturing but in ecommerce. Amazon’s use of collaborative warehouse robots has enabled the ecommerce leader to dramatically reduce the cost of rapid fulfillment and free returns. These features, in return, have attracted millions of consumers to ecommerce and created hundreds of thousands of jobs–more than enough to make up for the lost jobs in brick-and-mortar retail. Overall the consumer distribution sector, including retail and e-commerce, has added 195K jobs over past year, making it a major contributor to job growth (chart).

The results suggest that collaborative robots may benefit labor wages and job growth, just as assembly lines did in an earlier age. “Automation is the enabler, not the enemy,” said Jagiela.

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I am the chief economic strategist at the Progressive Policy Institute, senior fellow at the Mack Institute for Innovation Management at Wharton and the former chief eco...