This off-your-radar technology will change everything

Fintech… self-driving cars… renewable energyblockchain… these will all make our children’s lives very different from ours.

But there’s another technology that you hear about a lot less often that may have an even bigger impact, on nearly every part of our daily lives… from how we work… to who works… to how we make things… and how we move those things.

And Asia is leading the charge.

But despite its massive potential, it’s still being ignored by most investors.

I’m talking about the robotics, automation and artificial intelligence industry (or “robotics” for short).

Where robotic comes from

A robot is an autonomous or semiautonomous mechanical or virtual artificial agent guided by a computer program.

Robotics is the branch of technology that encompasses the design, construction, operation and application of robots, along with computer systems for their control, sensory feedback and information processing.

The birth of robotics goes back to 1956… with a chance encounter at a cocktail party between two men.

One of those men was Joseph Engelberger, an American engineer and physicist. He became known as the “Father of Robotics”.

The second was an engineer and inventor by the name of George C. Devol.

There’s a third man in this story who wasn’t there that night. He was an American professor of biochemistry at Boston University. Despite being a long-time member of Mensa International, the high IQ society, he was better known for his works of science fiction.

His name was Isaac Asimov.

The Three Laws

You might have heard of the Three Laws of Robotics (also known as Asimov’s Laws). Isaac devised these laws and introduced them in a 1942 short fiction story.

I. A robot may not injure a human being or, through inaction, allow a human being to come to harm.

II. A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.

III. A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.

At the cocktail party that evening in 1956, Joseph Engelberger and George Devol started up a conversation about Asimov’s works and philosophies.

The two later founded a company called Unimation (short for Universal Animation), and in 1959 developed the world’s first industrial robot.

In 1961, the robot, called “Unimate”, was installed on a production line at the GM plant in Trenton, New Jersey.

It was an electronically controlled hydraulic robot for heavy lifting, used to take hot metal pieces out of a metal press and stack them.

Over the next four decades, industrial robots became commonplace in numerous industries across manufacturing and logistics, along with every level of continuous industrial automation.

The numbers are rising

Robots have been around for over half a century. But they’re now getting more and more interesting.

The answer lies in a combination of factors. Some are technical, others structural. But combined the argument is compelling. Take a look at the total annual shipments of industrial robots globally over the past 15 years.

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Global Industrial Robot Sales

The first thing you’ll notice is the absence of growth between 2000 and 2008. During this period, total annual shipments only increased by around 13 percent in total.

That’s less than 2 percent on an annualised basis.

You’ll also notice a big fall in 2009 post-global financial crisis, with a recovery back to the pre-global financial crisis trend in 2010.

But, after that, you see a clear inflection point with annual growth in the mid-teens.

Why robotics should be on your radar now

Why? Because technological limitations are being peeled back at an accelerating rate.

You see, up until recently, the vast majority of robots completely lacked the sophisticated dynamic sensing, decision processing, mobility, control, manipulation and human interaction proficiencies needed to do much more than follow clear cut instructions in a relatively stable environment.

That’s why according to a research report by CLSA Citic, traditional industrial robots have only penetrated around 10 percent of the existing manufacturing sphere.

But with the accelerating development in sensors and intelligent machines, manufacturing is moving away from repeatable “dumb” actions. It’s moving from fixed to flexible manufacturing and mass customization. Today, factories are being built completely differently from a decade ago.

As Frank Tobe, the co-founder of ROBO Global and editor of The Robot Report, an industry trade publication puts it:

“Industrial robots used to be dumb, somewhat inflexible, and mostly blind – but also fast, precise and very efficient. As the cost of components, sensors and vision systems has been dropping, vision-enabled robots are becoming more prevalent and capable, and the industry is dramatically changing.”

Take Apple, for example. One of the company’s new factories may have production lines making multiple series of products, not just a single line. That may not sound like much, but it’s the equivalent of a smart Swiss Army knife versus a plastic fork.

What we’re seeing right now is the advent of next generation industrial robots.

And we’re seeing a rapid expansion of these robots into non-industrial sectors. This is a large part of why I’m so bullish on this sector. These advances are opening up into so many different markets previously untouched. The opportunities are enormous.

Robotics companies are now tackling new areas like agriculture; personal and professional services; medical, surgical and rehabilitation; consumer products for security, entertainment and household chores; and unmanned aerial/land/underwater devices for delivery, surveillance, security and the military.

In addition to this, you have all of the software, AI, engineering, 3D printing, and sensors.

Asia is leading the way

China is by far and away the biggest robotics market.

Bear in mind their average manufacturing wage in China has increased six fold since 2000. The demand for automation is skyrocketing as a result.

The International Federation of Robotics (IFR) estimates that by 2018 China will account for nearly 40 percent of all industrial robots sold.

The market for industrial robots is forecast to grow at roughly 22 percent annually.

And it’s not just China…

Asia is the market for robotics. Three of the four largest robotics markets in the world are in Asia (China, South Korea and Japan).

Excluding Japan, the Asian market is growing at north of 15 percent annually. In 2014, we saw a 40 percent year-on-year jump in industrial robots sold in Asia (60 percent of the global total).

Globally, it’s estimated that by 2020, the robotics market will be worth over US$150 billion annually, split roughly equally between robotics and AI-based analytic systems.

In short, this is a massive opportunity.

In essence, robotics and automation combined with huge leaps in AI, is creating a technological revolution that will fundamentally alter how we live and work.

The field of robotics is no longer a simple industrial application. It is becoming a disruptive force in nearly every major modern industry you can think of.

The potential is for this trend to be as transformational as the arrival of the internet.

So if robotics isn’t on your radar yet, it might be worth taking a look today.

Good investing,

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Source: Stansberry