We're all familiar with images of lurching robots performing rote tasks on the factory production lines. But the capabilities of robots have evolved well beyond the banality of those grainy industrial films. Today's industrial robots have incredible dexterity to match their brute strength, and can actually learn on the job. And then there’s an entirely new breed of robots—some in humanoid form, and others that take highly practical forms all their own—that can walk, talk, save lives, and perform critical jobs in extreme environments, or simply take care of mundane tasks at home while we’re out enjoying our lives.
From healthcare and homecare, to military use and emergency response, robots are fast becoming a fixture in our lives. A number of T. Rowe Price’s analysts are closely following their every move, and one of them spoke recently about the latest innovations and opportunities in robotics, as well as where we might see them making an impact next.
For years now, robots have worked tirelessly in the shadows to increase or enhance the productivity of humans. Until recently, however, the futuristic, sci-fi-inspired vision of robotic technology has largely remained disconnected from the glamourless utilitarian role it’s played in manufacturing. But robotic technology has now advanced to the point where we’re truly starting to see it move into many new areas of the economy.
THE TWO PHASES OF ROBOTICS
The evolution of robotics can be divided roughly into two phases. In the first phase, we saw electric machines that were programmed to perform specific tasks but otherwise didn’t really interact with the real world, such as those we’ve seen in automotive manufacturing for years. Japanese companies were early to market with the industrial robots used in many areas today, including auto manufacturing, distribution centers, foundries, pharmaceutical packaging, and many others.
There's a publicly traded Japanese company called FANUC that actually has a fairly robust portfolio of industrial automation robots. Their blade profiling systems, for instance, are used to finely sharpen and finish critical metal parts for gas turbines used by aerospace and energy manufacturers. Some of their other systems are used on a production line to hold, move, and precisely place extremely heavy objects with the same delicate care and relative ease that a person might use to put a carton of eggs into the refrigerator.
Industrial robots have progressively become more and more sophisticated. But the potential for much broader industrial and consumer acceptance is tied to the development and advances occurring in the second phase of the robotics evolution, which we’re in the early days of right now. These robots aren’t simply programmed to perform repetitive tasks—they can absorb data, recognize objects, and respond to information and objects in their environment with greater accuracy.
The Japanese were leaders and early adopters when it came to industrial robotics, but now we're seeing more activity and innovation coming from companies in the U.S. and Europe as well. And we expect robotics to eventually touch every industry and evolve into a truly global opportunity with a worldwide landscape of players over time.