2010 Robotics Predications; Reality Check for 2009

Trick math question: If you have $100 and lose 50% and then gain back 50% of that, how much do you have?

1. $100
2. $50
3. $75
4. None of the above.

Stock markets around the world rose dramatically in 2009. Robotic stocks did as well or better than the major tracking indexes, particularly service robotic stocks. But the real story isn't the gains of 2009 but the lack of recovery from 2007.

An example: U.S. publicly-traded industrial robotic companies saw their stocks rise 40% in 2009. But those same stocks lost 53% in 2008. Thus their year-to-date rise in 2009 of 40% really only recovered 16 points of the 53 lost the year before. U.S. industrial robotic stocks are still down 37% from their close at the end of 2007 as are almost all robotic stocks worldwide. That is what these Robo-Stox™ charts - one for industrial robotic companies and another for service companies - attempt to show. Click to enlarge.

Most countries' robotics stocks didn't fare as well as the American NASDAQ Index with the exception of Canada, India, Israel, Taiwan and a very few individual stocks. Thus although 2009 was a significant up year for stocks, and robotic stocks in particular, robotic stocks have yet to recover their highs of 2007 and have a long way to go to do so.

The seriousness of the recent worldwide stock market and economy crash - of the drop in market value of the companies - of the loss of jobs and orders, and revenue and profits - is a long way from recovery. Although jobs in the robotics sector are available for qualified takers, particularly in the service sector, unemployment in general is dramatically high and most economists are predicting that it will be well into 2012 before any real gains occur.

That is not to say that all is pessimistic, particularly for robotic businesses. 2010 looks to be a good year with definite "drivers" effecting selected marketplaces.

Worldwide military, police and security agencies are continuing to purchase and invest in R&D for all types of unmanned, remote-operated aerial, underwater and ground robotic devices. More jobs - with the likelihood of continued growth over the next few years.

Medical robotics (included in the services sector) are poised for many years of rapid growth propelled by:

1. Growing patient demand for non-invasive surgery,
2. The current effort to reduce hospital costs by increasing productivity through a variety of robotic activities (non-invasive surgery, pill dispensing, materials transfer, lab assistance, etc.),
3. Hospitals, which have held back capital purchases (such as Intuitive Surgical's million dollar da Vinci devices) for the past two years, are beginning to reinvest in these types of equipment.

With the return of small amounts of discretionary income back into the economy, consumers are once again interested in robotic toys and kits as can be seen by 2009's Christmas rush to buy millions of robotic hamsters (Zhu Zhu) and thousands robotic penguins.  And the hit of CES was an indoor-flying iPhone controlled quad copter by Parrot that will sell for $129.

For industrial robot manufacturers, orders will stay down for quite a while. For those vendors that have switched or are making inroads into the services sector, the horrendous spate of bankruptcies and buy-outs has stopped and the future is looking brighter especially in new markets including the SME market.

Small and Medium-sized Enterprises (SMEs) are now being offered affordable robotic products that haven't been available to them before, first in Europe and Asia, and later in the U.S. Lightweight and easily trainable, these flexible robots are enabling these smaller manufacturers to increase productivity and not have to go off-shore to produce their products.

Robotics stocks in Korea, Japan and the EU are outperforming US stocks. Why?

Robo-Stox™, a compilation of worldwide publicly traded stocks in the robotics industry and exclusively presented on The Robot Report, clearly show that America is losing the race in robotics except in two areas: medical/surgical and defense/security. Click chart to enlarge.

PPIP’s. Public, Private Investment Partnerships focused on robotic growth where it will do the most good are, in my opinion, the reason why Korea, Japan and the EU are surpassing America in robotics development.

• Korea is two years into an aggressive plan to invest $1 billion in order to be #1 in the worldwide robotics industry by 2018 and they’re spending $100 million each year in that pursuit.


• Japan has many PPIPs focused on enabling the elderly to remain independent as long as possible thereby reducing healthcare cost and providing a better life for its citizens with robotics.


• Europe has many PPIPs. One, which just concluded, focused on the robotic needs of small and medium-sized manufacturers.

When American educators from the major US tech universities presented their roadmap for our robotics industry before Congress last month, their suggestions for manufacturing had already been researched and reflected in the EU’s SME Robot Initiative. We are that far behind!

Worse, to date there’s been just one story about the presentation before Congress, and not a single published quote on the subject from any of the members of the Robotics Caucus. It's an interesting and illuminating read and I invite you download the PDF file and read it.

Led by Japan, Korea, and the European Union, the rest of the world has recognized the irrefutable need to advance robotics technology and have made research investment commitments totaling over $1 billion; the U.S. investment in robotics technology, outside unmanned systems for defense purposes, remains practically non-existing. [from A Roadmap for US Robotics]

Robotics, in all its interdisciplinary forms, will be everywhere very soon. In our homes, cars and appliances. At the hospital and in the workplace. Protecting us from near and afar. It's happening fast but not like in the movies. In America and Europe, it'll be in advanced embedded interactive systems like adaptive cruise control that now includes lane boundary awareness and will soon handle trucks and busses un-manned in controlled lanes; or in Kiva-style warehouses (no fixed shelving; few pick and pack people; heavy computer control, autonomous robots interacting with one another); or in smaller and smaller interactive medical and sensing devices.

In Japan and Korea, more humanoid-looking robots will be used for personal and factory assistants and we'll all be using exoskeletons of one type or another such as the ones being used for Japan's seniors to help them garden or Honda's factory workers who need to squat, climb and lift to do their jobs.

It's truly amazing and just beginning to get into stride. Worldwide defense spending is paying for the R&D and smart guys like Rodney Brooks are commercializing that R&D into household products.

Part of why America's robotics industry is lagging is that it is quite fragmented with all the R&D being at the behest of DARPA, NASA and the DoD and none in the commercial sector. Other than in medical robotics (which were originated by NASA), our robotic companies are integrators, engineers, software developers and resellers; not manufacturers. Even Ugobe's adorable Pleo dinosaur robot was contract-manufactured in Hong Kong!

Robotics technology – at it’s present level of technological progress - offers a rare opportunity to strategically invest to create new jobs, increase productivity, and increase worker safety in the short run, and to address long term fundamental issues associated with economic growth in an era of significant aging of the general population and securing services for such a population. Public/private investment partnerships take actions that, to date, at least here in America, have not yet begun to happen.

But that’s where we are today, not where we can be tomorrow unless we start making some decisions today!

Let’s take stock of what we do have. First, we have an established, albeit fragmented, robotics industry comprised of some of the most innovative people in the field, if not the most accomplished at this moment. Second, we have already invested in a Robotics culture at the secondary school level with Robotics Clubs proliferating and a lot of groundwork already having been done by both our competitors and the pop culture. Third, and most important, we have a history of leadership in the development and domination of new technologies once we get going in earnest; computers, microchips, pharmaceuticals, medical devices… the list is long.

It's unacceptable that, with all the stimulus money and new technology rhetoric floating around, we are not strategically investing in an industry that has the likelihood of becoming "the next big thing."