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Robots Uncaged How a New Generation of Sophisticated Robots Is Changing Business Signals for Strategists Robots uncaged How a new generation of sophisticated robots is changing business By David Schatsky and Amanpreet Arora NDUSTRY has used robots for decades. They were Signals once confined to safety cages in manufacturing facili- Ities, programmed to perform one task perfectly, over • Next-generation robots, including collaborative and and over again. Their purpose was to make high volumes service robots, are projected to account for two- of goods more quickly and cheaply. thirds of unit robot sales by 2025, up from 22 percent But advances in a number of technologies are spring- in 2015.1 ing robots from their cages, liberating them to work • Venture capital investment in robotics technologies in new roles, in new industries, and with new benefits. has accelerated since 2013, exceeding $3.5 billion Robots are changing far more than manufacturing—in since 2012.2 industries ranging from retail to financial services, they • Toyota is investing $1 billion over the next five years are clambering onto the agendas of strategy, marketing, to establish a new R&D arm focused on artificial in- customer experience, and product leaders. telligence and robotics.3 1 Robots uncaged How a new generation of sophisticated robots is changing business • Major companies are already using robots to prepare generation of robots may ultimately eclipse traditional meals,4 support manufacturing workers,5 assist re- industrial robots.12 tail shoppers,6 deliver room service,7 and engage Business has long seen robots as tools to improve customers in banks.8 efficiency and productivity. But now, they are being put • Kuka, a maker of industrial robots, is planning to to use in pursuit of other business benefits as well: Or- enter new markets, offering robot assistants able to ganizations are using them to enhance customer service, help with tasks such as looking after the elderly.9 increase operational flexibility, and improve product • Members of the European Parliament are seeking to quality. This means that robots are now of interest well create a European agency for robotics and artificial beyond managing manufacturing operations; business intelligence, to supply public authorities with techni- strategists, marketing and customer service leaders, and cal, ethical, and regulatory expertise.10 IT heads should all take note. Freed from their cages Technological advances power the new generation of robots Rapid technological advancements are giving rise to a new generation of smarter, more flexible, and more Why are robots emerging from their cages and step- mobile robots. Some can perform diverse tasks in un- ping into new roles? Because technological advances are structured environments and work with and alongside endowing them with powerful capabilities and making people. Some can fly; others can navigate terrestrial them easier to use. Progress in both software, including routes. These next-generation robots are changing cognitive technologies, and hardware, particularly sen- manufacturing operations and workforce plans, gaining sors, actuators, and batteries, plays a role. greater adoption in health care, and beginning to pen- This next generation of robots is an embodiment of etrate nontraditional sectors such as food and beverage, the powerful trend in which the physical and the digital hospitality, banking, and retail. They are increasingly worlds increasingly interact with and affect each other. showing up in homes as well. Robots act upon data they receive from their environ- Market analysts segment the robotics industry in var- ment and, in response, aim to alter their environment. ious ways. A typical scheme categorizes robots according In this way, robots exemplify the last stage of what De- to their primary use: industrial, commercial, domestic, loitte has characterized as a physical-to-digital-to-phys- military, or social and entertainment. In contemplating ical loop: the leap from the digital environment back to the sweeping changes that a new generation of robots action in the physical world. In the context of manufac- promises to bring to organizations, this article focuses turing, this powerful dynamic is at the heart of what is on two emerging robot categories: a type of industrial known as Industry 4.0.13 But as we are arguing here, robot known as a collaborative robot, or cobot, that can next-generation robots are making a growing impact work alongside people, augmenting their abilities rather outside of manufacturing as well. than replacing them; and commercial, or service, robots, Robots are becoming easier to configure and use than able to perform a growing array of tasks outside of man- their traditional industrial forebears. Embedded vision ufacturing environments. Service robots may include au- systems, sophisticated behavior software, and robotic tonomous guided vehicles, drones, medical robots, field/ positioning systems enable workers to train them by agricultural robots, or others.11 example. For instance, some robots can be trained sim- To be sure, traditional industrial robots are the big- ply by moving them around to teach them where they gest segment of the robotics market. Last year, robot are expected to go or to perform different tasks such as manufacturers sold about 300,000 industrial robots, metal fabrication or molding.14 Fanuc’s cloud-connected worth about $12 billion; only around 9,000 of them industrial robots use a form of machine learning called were cobots. Service robots, the other new category, also reinforcement learning to teach themselves tasks.15 comprise a relatively small share of the market. Manu- Some new-generation robots possess remarkable facturers sold about 130,000 of them, worth about $5 dexterity. Computer vision and machine learning help billion, in 2016. But sales of next-generation robots are them identify objects and learn how to grasp them; growing rapidly. One venture capital firm projects a 61 grippers featuring suction, electro-adhesion, or articu- percent compound annual growth rate (CAGR) for co- lated fingers and force sensors help them grasp and bots and a 34 percent CAGR for service robots. The next manipulate objects with precision. Increased dexterity 2 Robots uncaged How a new generation of sophisticated robots is changing business FACTORS DRIVING DEMAND FOR is expanding applications in surgery, food preparation, NEXT-GENERATION ROBOTS and warehousing and distribution. Kindred is a robotics start-up whose first product combines computer vision, Basic laws of economics are driving growing demand machine learning, and human supervision to help ware- for robots: As price falls, demand rises. The average sell- house staff sort items for shipment more quickly and ac- ing price of traditional industrial robots is declining by curately.16 over 4 percent per year, and analysts expect prices of co- Improved learning and dexterity mean that robots bots to decline by about 3 percent annually.23 The cost are becoming more versatile. Unlike conventional in- of most types of service robots is projected to decline by dustrial robots of yore built to perform a single task such between 2 and 9 percent each year as well.24 as welding or painting a part, some newer robots can Not all of the new robots are being deployed to sup- switch between different tasks with minimal reprogram- port humans, of course. Rising labor costs in some re- ming. For instance, a global logistics company is using gions are making robots an attractive alternative to the same collaborative robots to perform tasks such as workers: One analysis found that the payback period for assembly, fabrication, and packaging at its warehouses.17 an investment in a welding robot in the Chinese automo- A marine robot can patrol oceans to detect illegal vessel tive industry, for instance, was 5.3 years in 2010 but on activity while simultaneously monitoring environmental track to fall to just 1.3 years in 2017.25 variables such as ocean currents and temperatures.18 Labor shortages are also driving adoption of robots. Many robots are now capable of autonomous mo- For a mix of demographic and policy reasons, factories tion; they are able to navigate and work in unstructured in China,26 restaurants and hospitals in Singapore,27 and environments alongside people rather than remain- farms in the United States28 are facing labor shortages. ing bolted to a fixed location within caged workspaces. For these businesses, robots offer an increasingly viable These robots have multiple sensors, mapping and loca- substitute for human workers. Other businesses, partic- tion software, and computer vision capabilities to help ularly in the automotive industry, are employing collab- them recognize people, objects, and locations; they can orative robots to take over physically demanding tasks, navigate ordinary work or home environments, avoiding allowing aging workers to focus on less taxing work.29 obstacles. For instance, OTTO’s self-driving vehicles use laser-based perception and memory-based visual refer- ence points to learn and self-adjust their paths.19 Savio- Robots bringing new ke’s robots can autonomously navigate indoor environ- business benefits ments such as workshop floors, hotels, and apartment As robots’ capabilities improve, the benefits they of- buildings. Other robots designed for collaborative use by fer go beyond better/faster/cheaper. Companies are in- workers are stationary but have sophisticated and versa- creasingly looking to robots as a way of boosting inno- tile arms and grippers. A diverse array
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