The Importance of Making vs Selling Stuff - sidebar on Goldman Sachs

Much discussion is being focused in Congress, recent books, articles, and in the media, on the financial crisis and the contributing factors to that crisis.  Omitting until the end the role of Goldman Sachs, one important factor about the crisis must not be overlooked said James Kwak of The Baseline Scenario:

Remember that financial services are an intermediate product -- that is, we don't eat them, or live in them, or put them on in the morning.  They are supposed to enable a more efficient allocation of capital, so that the non-financial economy is more productive. But what we saw since the 1980s was the unmooring of the financial sector from the rest of the economy.  

Financial services are supposed to serve our economy; not be the economy.  Yet the trend is otherwise... over 40% of the profits of the entire US corporate sector went to the financial industry.  As a reference, in 1970 it was 4%!

Paul Krugman wrote:

A growing body of analysis suggests that an oversized financial industry is hurting the broader economy.  Shrinking the oversized industry won't make Wall Street happy, but what's bad for Wall Street would be good for America.

Martin Wolf, of the Financial Times, wrote:

...the financial sector seems to be a machine to transfer income and wealth from outsiders to insiders, while increasing the fragility of the economy as a whole."

Even the ethic has changed.  Doing things with ones hands - the pride in the skill and craft of so doing - used to be our ethic; now it's who can earn the most money.

The real issue is that America has changed from a hands-on country to one that sells the products of others. As more and more production and service jobs go off-shore, only financial services are staying behind.  And as Andrew Sorkin said on the Charlie Rose show last week:

...so many of these instruments on Wall Street, it's really just a casino, there is no underlying assets, they don't actually own these devices; people aren't getting mortgages because of this... What is the social utility of that?

All of this can be seen in the difference between the growth of the robotics industries in America and everywhere else.  America used to develop, design and manufacture their robots.  Then they only developed and designed them - the products were built off-shore.  Now much of the non-defense design is being done elsewhere and manufactured off shore without America having a piece of the pie.  Most of the iRobot products sold to the DoD are manufactured offshore!

Sidebar about Goldman Sachs

From a blog entry in The Huffington Post by Senator Carl Levin:

Most investors make the assumption that people selling them securities want those securities to succeed. That's how our markets ought to work, but they don't always. The Senators who in the 1930s investigated the causes of the Great Depression stated the principle clearly:

[Investors] must believe that their investment banker would not offer them the bonds unless the banker believed them to be safe. This throws a heavy responsibility upon the banker. He may and does make mistakes. There is no way that he can avoid making mistakes because he is human and because in this world, things are only relatively secure. There is no such thing as absolute security. But while the banker may make mistakes, he must never make the mistake of offering investments to his clients which he does not believe to be good.

Goldman documents make clear that in 2007 it was betting heavily against the housing market while it was selling investments in that market to its clients. It sold those clients high-risk mortgage-backed securities and CDOs that it wanted to get off its books in transactions that created a conflict of interest between Goldman's bottom line and its clients' interests.

These findings are deeply troubling. They show a Wall Street culture that, while it may once have focused on serving clients and promoting commerce, is now all too often simply self-serving. The ultimate harm here is not just to clients poorly served by their investment bank. It's to all of us. The toxic mortgages and related instruments that these firms injected into our financial system have done incalculable harm to people who had never heard of a mortgage-backed security or a CDO, and who have no defenses against the harm such exotic Wall Street creations can cause.

Levin went on to say that: 

Running through our findings and these hearings is a thread that connects the reckless actions of mortgage brokers at WaMu with market-driven credit rating agencies and the Wall Street executives designing the next synthetic. That thread is unbridled greed, and the absence of a cop on the beat to control it.

I couldn't agree more.  I'm pained to see this happening during my lifetime.  

Rethinking Singularity

I have concerns about Ray Kurzweil's Singularity.  The following three stories will show you where I'm coming from and give some background to what I want to say:

(1) In the '80s, Tom Axworthy, then Principal Secretary to Prime Minister Pierre Trudeau (and now with the Center for the Study of Democracy at Queens U in Kingston, Canada and the Gordon Foundation), spoke before my group, the American Association of Political Consultants, and told why Canadians and other countries distinguished themselves from Americans and American political campaign technology.  He said that Americans pursue life, liberty and the pursuit of happiness as a national credo whereas most other societies have as their goals peace, order, liberty and fraternity.  Fraternity being the sharing in the well-being of all of society.  Big difference between the individual pursuit of happiness to the altruistic sharing of the well-being of everyone.  And that difference translates into political orientation, campaign practices and social ethic.  In America elected officials have star status whereas most members of parliaments worldwide are part of the party and not well known.  They are often elected as the x-party member for the y area.  Hence there's less personality and more issue orientation.  Not Barney Frank versus Earl Sholley but instead Liberal versus Tory.  Axworthy's talk has stuck with me to this day because I strongly believe in his version of Fraternity and what it means for society and the future.  Also it was one of the many reasons I chose to sell off and quit my activities in politics.

(2) Ray Kurzweil's projections of logarithmic (exponentially accelerating) technological progress - particularly in the fields of robotics, biotechnology and nanotechnology - leading to a "singularity" or merging of these super-intelligent sciences sometime between 2040 and 2045, a merging where differentiating between a human with consciousness and a robot-like device acting as if it had consciousness, has been fascinating to me because I'm a technology enthusiast, particularly in the areas of computers, AI and robotics. I see it happening just as he says. In robots, genetics, longevity, artificial intelligence, aging, stem cells, and many more sciences, my vision of the future is similar to Kurtzweil's. And this is disturbing because his projections are leading to a conclusion that I don't want for society.

(3) While driving to and from Lake Tahoe last weekend, some friends and I listened to an audiobook entitled Death Match. Although it was a mystery, it was really about artificial intelligence. It involved a computer dating service that went beyond simple questionnaires and instead merged psychological, medical and financial data along with social data such as travel, movie and book preferences, phone call records, traffic tickets, etc. into a massive database which was then sliced and diced to provide information about the candidates well-beyond what they entered on their initial survey forms. Armed with all that data, the computer did it's match and was quite successful. A discussion occurred about individual boundaries, and computer capabilities. Coincidentally, I had recently listened to a podcast of an AI expert discussing how things were presently done (constructivist) and how they will be done shortly (software developing software). This shed light on what was fictional in the story. The discussion continued to include the fact that the story's software and manipulation of massive databases was available today but that it wasn't going to get too much better until more capable and extensive software could be developed and that was precluded because the present state of the art was constructivist (done by human programmers and limited by their time and capacity). Although software is used to create new computer chips, humans are still cranking out AI software. When AI software becomes self-generating, that's when robotics and other embedded sciences will grow - and the dangers I foresee begin.

This brings me to a long and old (2000) Wired Magazine article written by Bill Joy, co-founder and network computer scientist of Sun Microsystems, a VC at Kleiner Perkins Greentech and FOO (Friend of Obama).  In the article, Joy worked his way through his own history of thoughts about technology to an evening when he spent some time with Ray Kurzweil and learned, first-hand, what Kurzweil foresaw.

Ray was saying that the rate of improvement of technology was going to accelerate and that we were going to become robots or fuse with robots or something like that and John [Searle, also at the meeting] countering that this couldn't happen because the robots couldn't be conscious.

I had always felt sentient robots were in the realm of science fiction.  But now, from someone I respected, I was hearing a strong argument that they were a near-term possibility.  I was taken aback, especially given Ray's proven ability to imagine and create the future.  I already knew that new technologies like genetic engineering and nanotechnology were giving us the power to remake the world, but a realistic and imminent scenario for intelligent robots surprised me.

Joy wrote pages of his history in thought from then until he met scholar and author Jacques Attali who described his interpretation of Fraternity.

Jacques helped me understand... Fraternity, whose foundation is altruism. Fraternity alone associates individual happiness with the happiness of others, affording the promise of self-sustainment.

This crystallized for me my problem with Kurzweil's dream. A technological approach to Eternity - near immortality through robotics - may not be the most desirable utopia, and its pursuit brings clear dangers. Maybe we should rethink our utopian choices.

I believe we must find alternative outlets for our creative forces, beyond the culture of perpetual economic growth; this growth has largely been a blessing for several hundred years, but it has not brought us unalloyed happiness, and we must now choose between the pursuit of unrestricted and undirected growth through science and technology and the clear accompanying dangers.

We are getting a belated start on seriously addressing the issues around 21st-century technologies - the prevention of knowledge-enabled mass destruction - and further delay seems unacceptable. 

It seems to me that Joy's seriousness and concern is well-deserved and appropriate.  I share his concerns fully.  What do you think?

Just One Sentence for Robotics in the Presidents Stimulus Message

In a recent Washington Post op-ed piece, Google's Eric Schmidt described why America has an innovation deficit and suggested ways that stimulus might change that situation.

We see it reflected in our search trends at Google: Too many people are out of work, and the fear of unemployment is changing the behavior of millions more. 

We have been world leaders in innovation for generations. It has driven our economy, employment growth and our rising prosperity. 

But much of the cutting-edge research and development in key and critical areas now takes place outside the United States. 

We can no longer rely on the top-down approach of the 20th century, when big investments in the military and NASA spun off to the wider economy.

Schmidt is saying is what I have found to be true in robotics funding.  Other than DARPA, DOD and NASA, funding for robotics is not directed or strategic.  In other countries, however, strategic funding is reaping benefits that are placing America farther behind in robotics development, deployment and manufacturing. Here is Schmidt's five-point prescription to invigorate American technology innovation:

1. Start-ups and smaller businesses must be able to compete on equal terms with their larger rivals. They don't need favors, just a level playing field. Congress should ensure that every bill it passes promotes competition over protecting the interests of incumbents.
2. Encouraging risk-taking means tolerating failure -- provided we learn from it. If we want to be a leader in new industries such as green energy [and robotics], we have to accept that some of our investments won't pan out.
3. We need to invest more in our knowledge base. The decision by Congress to double science funding last year was a big step in the right direction. Now we need to extend the R&D tax credit so businesses can confidently invest in their future.
4. Information must become even more open and accessible. Government-funded research should be made public through "a Wikipedia of ideas," so entrepreneurs can harness ideas commercially. Broadband is a major driver of new jobs and businesses, yet America ranks only 15th in the world for access. More government support for broadband remains critical.
5. We need to hang on to talented people. The best and brightest from around the world come to study at U.S. universities. After graduation, they are forced to leave because they can't get visas. It's ridiculous to export such talent to our competition.

Yes, all these points are fine. But there are more important issues going on. There is a perception that robotics takes away jobs which is not being factually countered. National Robotics Week - an awareness program initiated by a few companies and America's major tech universities - is a good first step. However, the government's consistent omission of robotics in their stimulus proposals is, to me, a sad surrender to the cry from unions and others that robots take away jobs. Instead of arguing that retraining and innovation and strategic funding create jobs, we are steadily giving in to these ill-founded claims and eroding our possibilities to lead again in technological innovation.

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 2009 - A Review

Singularity Hub, a website reporting advances in nanotechnology, genetics, biology, AI, aging and robotics, presented their 2009 Best Robots pictorial, a graphic review of some of the most interesting robots in the news in 2009.  A few of the entries were frivolous or  prototypes with no prospect of near-term commercialization, and there were some major omissions, but overall it gives a favorable impression of the progress made during 2009 - and prospects for the future - in robotics. It made me think that it might be time to review my own progress through 2009.

In June, 2008, I began to research the robotics industry - and the future of robotics - with an eye toward selectively investing in publicly-traded or privately held robotics businesses. I set up The Robot Report as an adjunct of my research - to share the data I've collected and to provide a visual method to track the business of robotics.  I've also been compiling a database of robotic companies and facilities worldwide and developed an industry chart (RoboStox™) of publicly-traded service and industrial robotic companies from which to compare their change to that of the NASDAQ and the DJIA indexes. RoboStox™is updated and recapped monthly on The Robot Report.

My research was necessary because my stock brokers didn't have a list of companies involved in robotics. They had a few stock tips but nothing comprehensive about the industry. Nor was there a fund or index for the industry.  Not even a knowledgeable specialist or quant. I realized that I had to do the legwork myself. It's been an intensive project that has taken me to Korea, Germany, Japan, and all over the Internet. My eyesight has suffered but not my mind. I love what I'm doing and discovering.

September 2008 was right about the time that the economic crisis really hit. Stocks took their second and biggest dive. People were on the edge of panic. Things hidden behind years of obfuscation became painfully visible in the media.

Robotic stocks tumbled that September. Fell like bricks. But I was still optimistic. I thought that by the time I really grasped the business of robotics, I'd be able to select the good from the chaff, and ride the wave back up, should it ever happen.

Thus far I've identified more than 600 companies (worldwide) that produce robotic products, 150 of which are publicly traded. Of the 600, many are conglomerates or companies where robotics aren't their primary business - ABB is an example. Less than 1/3 of ABB revenue is from robotics, yet ABB is one of the major robotics providers in the world.  Many of the companies aren't listed on American exchanges. My database has another 650 companies, some of which are public, that are ancillary to the industry providing everything from engineering, integration, software, vision systems and other necessary components to purely educational and research facilities. I have another 200 UAV providers on hold because many are unlikely to become commercially viable due to restrictions in airspace and the probability that countless years will pass before those limitations are lifted.

Observations from 2009:

• Strategic funding toward a robotics industry via a roadmap is non-existant in the U.S. but not in Korea, Japan and the EU. Their "roadmaps" have been designed, plotted out, funded, the public-private groups selected, and the tasks and research are underway.  Korea's $1.25 billion Frontier Program has an overall goal of a robot in every household and for Korea to become the primary worldwide provider of industrial robots by 2018. Japan's $100 million transition to service robotics is reflected in a variety of prototype elder and home care robots and smaller multi-functional assistance robots. The EU has funded (at least $600 million) for a variety of public-private consortiums in the area of cognitive systems, human-robot and robot-robot interaction.
• In America, we are many years behind.  Our "roadmap" was presented to a congressional caucus in February but has yet to be approved or funded.  If it does get approved and then funded, it is unlikely to get into the budget until FY 2013 or 2014.  As an American, I find this to be quite disturbing.
• Pragmatic funding for robotics does happen in the U.S. particularly for defense through DARPA, space, and from a select few individual entrepreneurs.
• Although there is and will be stimulus for high tech from the 2009 Economic Stimulus Bill, there is NONE for robotics; rather, there's money for healthcare digitization, enhancing the national broadband system and for energy efficiency (mostly in the form of grants and tax credits) and the ARPA-E grants for the development of enhanced battery technologies, carbon capture and other non-robotic research.
• Industrial robot producers have been diversifying and consolidating into the service sector and improving their products by making them lighter, more capable, less requiring of a safety cage, and easily trained.
• Like other companies suffering the economic crisis, orders have been down and employee cuts were necessary.  But that trend appears to be reversing in the services sector.
• Proof of this last point came from job offer information from LinkedIn and the Robotics-Worldwide mailing list - sources for monitoring such offerings.  One can see particular progress in the areas of bionics, motion vision, human-robot and robot-robot communication, motion flexibility, and artificial intelligence.  
  
• Worldwide robotics stocks - in anticipation of a return to economic normalcy - have recouped much of their losses from lows reached early this year.  Nevertheless, almost all are still lower than they were in 2008.
• Other researchers are getting on the robotics bandwagon in addition to The Robot Report.  Three new players offered pay-for material about the industry in 2009. The Robot Report, of course, is free.
  

Thus 2009 was a year of retrenchment for industrial robotic suppliers - product improvements and movement toward new products in the service robotics sector.  Industrial orders may have been down, but companies making the move to the service sector are hiring and marketing.  One exception to this has been in defense, space and surveillance where orders and sales are up.  Although news reports make it appear to be an American thing, it really is a worldwide phenomenon.  Countries from Israel to South Africa, from Brazil to China, are all developing security and defense bots of one type or another.

For me, 2009 was a year of research, database development and learning.  As the year progressed I began to focus on areas of particular appeal: rehabilitative robotics, agricultural robots, and medium-priced robotic toys to name a few.  People and companies began to discuss their financial needs with me and my collection of NDA's is growing.  Hopefully 2010 will be the year where everything robotic gels and we all have an exiting and prosperous robotics New Year.  One can only hope!

PS: 'Christmas Fun with Electronic Robots' was the cover story on the now-defunct Popular Electronics magazine back in December, 1958 - 51 years ago.  The issue sold for 35 cents!  I scanned and Photoshopped the cover into the graphic shown above.

Revelations from Tokyo

iREX2009 (International Robot Exposition 2009) held at the Tokyo Big Sight Convention Center in iREX2009 (International Robot Exposition 2009) held at the Tokyo Big Sight Convention Center in Tokyo November 25-28, was, to many, somewhat of a disappointment. The effects of the worldwide economic crisis appeared to have taken their toll on participation and attendance.

But from my point of view, things were quite different.  There was the fun of traveling to an exotic city, seeing all the different sights, experiencing the subways and noodle cafes and all the wonderful tastes and smells. There was the pleasure of meeting new people, talking about robotics and seeing the robots do their stuff.  And it was a terrific learning experience.  On the other hand, except for hobbyists and young peoples' contests, the excitement that you normally see in the crowds as they gather around the most interesting exhibit(s) at trade shows appeared to be missing.

There were few exhibitors that I hadn't already reported upon and included in The Robot Report's database of stories and links.  Nevertheless there were many noteworthy displays, some of which are discussed below.



Here is a slideshow of my photos to give you a feel for the show, it's colors and crowds.  Slide #1, of the Statue of Liberty - Tokyo version - was taken near the convention center and had a spectacular view back across Rainbow Bridge to central Tokyo and Tokyo Tower.

Robot --> robot interaction:  Robot-robot interaction (where multiple robots work together to achieve a common goal) was featured by most of the major industrial robot manufacturers. From the programmable dancing robots to the larger arms and hands that pass things to other robots, many companies presented where they were and what they were planning to offer.  Yaskawa and Kawada's robots (shown in the slideshow) worked, danced, moved in sync and were very stylish and colorful.

Robot --> human interaction:  (The enabling interfaces so that humans and robots can communicate.)  In the area of robot-human interaction, haptics and speech processing were shown in many different booths. Nevertheless, preprogrammed routines still control most robot activities although many manufacturers presented their prototype and edutainment robots which displayed every form of communication methodology.

Arms, grippers and hands:  There were many new thinner, smaller and very flexible arms including some very capable lab robots and very stylish tabletops. Incremental improvements in arms and grippers were displayed - like the flex-pickers from ABB and Fanuc and a wide array of hand-like grippers and the very capable grippers from Kawasaki and Panasonic.  KUKA invited people to their Tokyo headquarters to see their new sleekly designed arm unit (rightmost, above).

Sensors and vision systems were everywhere. Many 3D vision units were displayed. However, real-time sensing and perception -- the conversion to and interpretation of the digital results of the sensors and vision systems -- as has been coming out of research labs around the world, was lacking at the show.

Some achievements are now almost taken for granted and omitted or minimized from the show: navigation, mobility platforms and safety systems in particular. An infrared GPS navigation system from Toyo was one of the few exceptions.

Software normalization may be necessary, but there were so many competing software systems (SRI's Karto and Willow Garage's ROS to cite two that stood out) that standardization seems a long way off.

Many companies were offering virtualization software [a very necessary step in the acceptance and use of robotic surgery devices] for manufacturing, navigation and surgeries.

Service robots of all types were displayed: fire-fighting robots, surveillance scouts, security patrol bots, pipe cleaners, receptionists, edutainers and guides, etc.  One stand-out, ripe for commercial deployment, was Sumitomo's new line of autonomous industrial cleaning robots (right).

In one of the classes, KUKA and EUROP's Rainer Bischoff said, "Technology, economics and customer demand are re-shaping the future of robotics into one of service and human interaction." These sentiments were reflected in the actions of most of the major industrial manufacturers who were showing prototypes of their future service robot products as were a few Japanese technical universities (like the University of Tokyo KobaLab's pretty android receptionist Saya).

Another interesting prototype is Mitsubishi's Wakamaru robot.  Although not available for sale to individuals, it is available for universities, research projects and companies and is promoted as the first human-size robot that can provide companionship, or function as a care-taker or house sitter.  It's capabilities are similar to the other prototypes: recharges itself, call or e-mail if it notices a problem, continuous access to the Internet, voice and face recognition, and a dictionary able to recognize 10,000 words.

Healthcare, eldercare and medical robotics: Just as Intuitive Surgical was getting Japan's FDA approval to begin selling their da Vinci systems in Japan, Japan was preparing their own entry for trials and approvals in the EU and US (see below and in the slideshow).

The show had many healthcare robots from university labs and companies at varying stages of development. Yurina's Care Robot is a fascinating device for moving disabled people from and to beds and chairs. KobaLabs displayed robotic walking assistants. There were various exoskeletons shown: one from Tokyo's Institute of Technology enabled a person to lift and carry extraordinary amounts of heavy packages.  Cyberdyne was there with their new line of rental exoskeletons. Paro and Beatbot rehabilitation robots got lots of attention.

Concluding remarks: Two stories caught my attention during the show: one reported upon a GA Tech survey which found that older adults are more amenable than younger ones -- 77% to 67% -- to having a robot "perform critical monitoring tasks that would require little interaction between the robot and the human." The findings represent a significant heads up for the eldercare robotics industry and appeared to be reflected at iREX2009.

The second story, from the Atlantic, suggested that robotic takeover of repetitive, dull, dirty and dangerous jobs is having a serious impact on America's unskilled labor force and, combined with a continuing focus on cost-cutting and productivity increases, is going to have a large and continuing destabilizing effect on America's economy.

The fear of job losses, coupled with America's lack of investment in STEM education and research (Science, Technology, Engineering and Math), is propelling the robotics industry to countries that already have funded robotics roadmaps designed and being implemented. In America, the roadmap was presented last February and is still being discussed. It's a long way from being funded.  President Obama has been making the rounds talking about strategic investments to help with STEM -- and many companies are getting onboard (iRobot just started a new program for the advancement of robotics knowledge) -- but will it be enough to tip the scales from the destabilizing effects suggested in the Atlantic story?  It was this pessimistic spin that was on the lips of the English speaking people I talked with. Additionally, America's lack of direction in robotics appeared to be reflected in the few American companies displaying their products at the show.

I left iREX with a bag full of robotics literature and a good feeling toward all the people I met and talked with.  I learned and saw things from the perspective of the biggest players in the field and I am grateful for the overall experience. And I'm anxious to return... I was so busy that I didn't have time to see the cult movie "RoboGeisha" (which has English sub-titles)!

Optimism: A Conversation With Henrik Christensen

I met Henrik Christensen (Director Robotics and Intelligent Machines, Georgia Institute of Technology) earlier this year at International Experts Days at the Schunk factory in Hausen, Germany. His presentations and comments were business-like and focused on the numbers that make emerging products successful (large enough marketplace, serious need(s) satisfied by the new product, price comparable or less (with savings) with present methods and costs, etc.).

A few days ago we had a conversation that covered many of the current issues in robotics. Throughout the conversation, Henrik remained positive and upbeat, heralding the next few years as the tipping point for this emerging industry, particularly here in America. Of course, that's part of his current job: making robotics a key economic enabler in America. He is a significant player in the Roadmap for US Robotics presented to the Congressional Robotics Caucus earlier this year and continues to make presentations about robotics at various levels of government, encouraging cooperation and strategic funding to make things happen.

One area frequently in the news is robotic surgery. Intuitive Surgical is hot on the American stock parade. But almost 50% of the di Vinci surgical machines are not working at their capacity because many doctors don't have the skills to make them work for them. For example, one proctologist used to take 2-3 hours for a procedure that he now does using the di Vinci in 30-40 minutes. But many more proctologists take 3-6 hours (and after 4 or 5 hours it becomes somewhat dangerous to the patient). After giving it a few tries, they go back to their normal way. For them it's a matter of income - they can do more procedures in the old way and time. [There are new devices being reviewed by the FDA from Japan, Korea and the EU which, unless something is done, will also become underutilized.]

There's an industry term for this occurrence: stalled site - which usually occurs when the primary proponent moves on without a trained replacement.

Henrik says there's a major case for simulation training and two of the companies that do airline simulation are working on moving into that area as are major programs at the University of Michigan, SimuLab and Immersion. Right now Intuitive Surgical only gives a four-hour training course on their machine. Airline pilots have to invest hundreds of hours in training and retraining. The Captain and officers of the new cruise ship Oasis of the Seas spent 500+ hours of simulation time before ever stepping aboard the ship! Henrik sees not only a growing need for such simulation training but the economics that can make such an industry work and be profitable.

Industrial robots are engineering wonders that are extremely precise, mechanically intricate and last forever... which is part of their expense. To reduce those costs, manufacturers are making their machines more flexible, safer, human friendly and less exacting. Rodney Brooks' new start-up Heartland Robotics hopes to make machines that are 20%-35% less expensive and more assistive in, as he calls it, the "as yet un-automated manufacturing" sector. This is similar to the EU project SME Robot which focused on small and medium manufacturers and their requirements for flexible and quick shop assistance.

One "as yet un-automated" sector is warehouse fulfillment, an area where Kiva Systems has been so successful that it can't keep up with its orders. Amazon and all the other big mail-order processors are in need of products similar to the Kiva system but unique to their specific methods. It's an area ripe for innovation and one in which Henrik sees many things happening as early as early 2010.

One area where the economics aren't right yet for commercialization appears to be in therapeutic and eldercare assistive robotics. The research and equipment have yet to find their niche, yet the needs exist with autistic children and people with strokes and other disabilities and eldercare needs. The economic model to make saleable products with today's state of the art research and products just doesn't presently exist.

Finally we talked about the need for regional incubators to foster start-up companies -- to help them make the big switch from research engineers to marketing and management executives and to focus on helping customers do their jobs better with robotic equipment.

Henrik wants to tie research grants to real needs which, if he is able to get an agreement from the government to make strategic investments as is done by DARPA and now ARPA-E, will pay off and make robotics a key economic enabler in America.

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."

Conversation with Chris

I had an informative conversation with a recent LinkedIn acquaintance that I'd like to share. It began in answer to his question:

Just curious, your profile says, "Because I believe that robotics is the next big thing..." What do you envision, in terms of "next big thing"?

I responded:

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 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 handles lane boundaries and will soon handle trucks and busses unmanned in controlled lanes; or in Kiva style warehouses (no fixed shelving; few pick & pack people; heavy computer control); or in smaller and smaller interactive medical 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 squat, climb and lift.

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.

My interest is in finding either (or both) a basket of stocks of robotic companies that will rise in price or helping fund a select few companies in need of management, marketing and money to grow.

What do you think?

And then came this wide-ranging informative response that I found particularly illuminating:

When I was younger, I had the good fortune to witness/participate in this same dynamic in the computer industry, WANG Laboratories, Atex, Computervision (located in the same building that iRobot is in, Bedford now) and Sun Microsystems.

While I didn't realize what I was part of and witnessing at the time; it was a technological Darwinism that was unfolding with incremental technical breakthroughs that were being applied, somewhat haphazardly, achieving momentary commercial success and were quickly "leapfrogged" by a new company down the street, often with the same players. Although none of those companies and many others like them are around today, the relatively mature and stable PC we're both using has individual components (soft and hard), developed by those players and their technological derivatives; owing to materials and other advances.

Now I'm older, I realize what I was seeing then but adding a bit of experience and now seeing that in the case of robotics and many other advances; that relatively short period of success that the individual computer players enjoyed will be even shorter for this field. This leapfrog speed is and will be much faster. But, I'm reminded that to this day there are significant numbers of DEC and WANG servers still running vast arrays of applications, many for the government and others for many of the large institutions. The installed user base as it were.

So, what might this mean for robotics? If we look at the practical application of robotics, it will be interdisciplinary as you say and much of it is taking place in all the salient ways you mentioned. While all of those are viable and happening, it's the medical applications that most come to mind as immediate and timely candidates. Rodney Brooks is a great salesman but while his automated floor sweeping and gutter cleaning toys capture the public imagination, its his investment in things like MAKO Surgical that really demonstrate the potential for robotics (hardware-wise).

Take any high skilled operation in medicine, dentistry, exams, etc. study it carefully and you'll find that the operation can be mechanically fixtured and simplified via robotics which will do what they are truly best suited for, namely precision and repeatability. So envision going into a dentist for a root canal and instead of having an overpaid technician pounding in your mouth, using the same primitive tools that I use to file down a piece of aluminum; instead you sit and bite down on a universal, sterilized fixture that is ergonomically designed, and an "operator" is sitting in front of you, precisely directing the root canal "robot" via joystick/camera and or pre-canned software routines to effect all the physical force and position functions. Maybe it's mobile and can go to the patient in some remote areas, "affordable root canals for all." Perhaps this highly paid operator is making $ 60/hour so a root canal costs $600 rather than $ 2000. Further, it's repeatable every time. So the quality, repeatability, low cost, accessibility, etc. all combine as customer needs are met. Other examples exist and they will be found wherever we have a highly skilled operator operating high value equipment or carrying a highly specialized body of knowledge in his head. These are the applications that one might fund, (this paragraph long business plan, may or may not be the best example of it) but a good paradigm is to think of a skilled machinist versus a CNC milling machine. We've got very few skilled machinists today but we machine parts faster, cheaper and with much higher quality and repeatability.

So envision an installed user base of this machine across the country, in some percentage of dental clinics and pretty soon we can quantify the commercial value. That’s not to negate the commercial potential of mundane consumer applications mind you.

I think you're on the right track about the trend, as long as you focus on the substance and not the Hollywood hype, (terminator looking robots or the Kabuki Dancing dolls the Japanese trot out every year or so). The applications are happening all around us and from my perspective, one of the reasons were not moving faster is because some of the guys driving these things are coming out of University laboratories and feel it's important that they re-invent every nut and bolt, lacking practical experience in integration; rather than focusing on that one unique thing that they have developed, (perhaps a faster algorithm, a smaller/cheaper feedback device, wireless power transmission, etc. etc.).

If you visit Heartland Robotics website and go into the manufacturers’ survey link; you’ll see by the questions on that potential end user survey that the graduate student who put that question list together has never been within a mile of a factory, let alone understand what the factory floor may or may not need from a transformational concept like universal robotics. We sort of have solutions looking for problems in that regard.

To be fair to the academics and apologizing for my industrial bias here, there is some significant IP that will/is being developed as fresh eyes accidentally reinvent the “bolt”, material advances, etc. but it is taking the applications much longer to be developed. There's quite a bit of empowering technology already abundantly and cheaply available but it's not being applied, I think. That's not to say this isn't exciting stuff both technically and commercially, but much of it is still at the parlor trick stage as they agonize over things that have long ago been solved in industry.

Sorry for the long reply but this is an area I'm interested and have a bit of experience in and maybe I can help you and your group identify/evaluate some of these opportunities from a technology perspective or add value in other ways.

I'm not sure that I can help with the stock picks approach as I've long ago stopped riding up and down elevators in the Hancock Building listening to shills and I'm confident your grapevine is better than mine but if you're evaluating funding requests, perhaps I can add my two cents worth on the technology/assessment vs. what’s already available or maybe even evaluate the viability of what's proposed from a technical/architectural perspective.

What do you think?

It's Adaptive to be Vulnerable

Jack and Suzie Welch said it best when they wrote "Put Your Rage on the Back Burner" for this week's BusinessWeek Magazine.

"It's crazy to think the most profound economic and cultural upheaval of our times will end well if we let ourselves marinate in rage. Rage begets only rage: it often makes people do stupid, short-sighted things that invariably spawn unintended consequences. Rage isn't healing; it's polarizing.

We all have to fight to keep hope alive replacing our rage with renewed focus on the good that are all around us.

Right now there are thousands of geeky, brilliant engineering wonks sitting in their dorm rooms at MIT and Stanford and campuses around the world, oblivious to the weather as they pour their hearts into cool new ideas. Those kids and their ideas are the future of business if we just hang on tight and adapt.

Psychologist, author and artist Robert W. Firestone says that it's adaptive to be vulnerable - that we are more open to opportunity and willing to challenge ourselves and take risks when we're not hindered by rage and other defenses.

Certainly now is the time to stay focused and not get distracted with transitory issues. Ben Bernanke made the analogy of the current financial crisis to the story of the guy next door who smokes in bed. One day his house catches fire. While the house is on fire, it's not the time to place blame. Instead, it's the time to protect your home by pitching in to help fight the fire. When things are safe again there'll be plenty of time to assess blame and provide punishment where it's due. But right now the flames are challenging and it's time to take action.

The Welch article was uplifting to me. I hope you take the time to read it.