Of Automation and Education


According to the Industrial Federation of Robotics (IFR; ifr.org), which knows such things, 2017 marked a new high in shipments of industrial robots: the 381,000 units represent a 30 percent increase over the number shipped in 2016—and it is worth noting that in 2016 shipments were 294,000 robots, up from 254,000 units in 2015. The point is that there is continuous growth. Going back to 2009, the IFR reckons that there is an average 14 percent increase year over year in robot deployment. And release that they’re tracking industrial robots, not Roombas or Aibo dogs.

The IFR explains, “Since 2010, the automotive industry –the most important customer of industrial robots– considerably increased investments in industrial robots worldwide. After two years of single-digit growth rates, robot sales increased in 2017 by 22% to a new peak of almost 125,700 units. This is 33% of the total supply.” Anyone who has been in a car assembly plant knows that robots are evident almost everywhere. The IFR says, in effect, that after the 2008-09 economic downturn there was a capacity reconfiguration within the auto industry, as the automakers reeled in its (over)capacity and worked to increase the flexibility in its operations through automation. And the suppliers to the OEMs followed suit: “the supply of robots to the automotive parts suppliers gained momentum only in 2011.”

The IFR says that the auto industry generally leads the density of robots vis-à-vis the number of workers. For example, including all industries, the Republic of Korea has the greatest density of robots: 710 per 10,000 employees. Yet when they measured the number of robots per 10,000 employees in Korea in automotive, that number is 2,435, more than three times the 710. In the U.S., the number of robots in the auto industry is 1,200 per 10,000 employees, which is higher than in Germany and Japan—1,162 and 1,158 respectively—but less than in Canada, which is at 1,354.

Looked at as regards density, China has a low number for general industry: 97 units per 10,000 employees. But that’s probably a consequence of it having a lot of employees. It should be noted and understood that in 2017 China had the single biggest share of the entire robot market, 36 percent, or some 137,900 robots, which is greater than the combined number of robot sales in Europe and the Americas: 112,400. Of the robots purchased in China 34,7000 were from Chinese robot manufacturers, which is an increase of about 29 percent form the 27,000 China-built robots sold in China in 2016.

One of the oft-heard comments made regarding the on-shoring of manufacturing—that is bringing production that has been done elsewhere to the U.S.—had been that in other parts of the world wages are rising and so it becomes more economical to produce in the U.S. And a reason cited for the U.S. advantage is because of the automation prevalent in the manufacturing facilities.

Now make no mistake: there is a lot of automation existing in and going into factories in the U.S. According to IFR’s 2017 figures, the U.S. is in the top five of countries buying robots, a top five that represents 73 percent of overall global sales. But it isn’t number one. That would be China (137,000). It isn’t number two. That would be Japan (45,566). It isn’t number three, which is Korea (39,732). It is in fourth place, taking 33,192 units. (In case you’re wondering, Germany is in fifth place, with 21,404 units.)

So looking at the numbers, the Chinese absorbed more than 100,000 more robots than the U.S. did in 2017. If automation leads to greater productivity and if greater productivity leads to reduced production costs, then it is likely that there will be an advantage in China given the number of robots it is installing.

The point of all this goes to competitiveness. No, I am not suggesting that it is all a matter of deploying robots in order to achieve it. But what I am saying is that it is acutely important for manufacturers in the U.S. (because that’s where AD&P is headquartered, so there is self-interest involved) to be aware of the fact that manufacturers in other countries are elevating their games at a rate that, at least so far as the IFR numbers go, the U.S. isn’t keeping up with.

And another data point, this from the Organisation for Economic Co-operation and Development (oecd.org). They’ve calculated the percentage of people in various age groups who have completed tertiary, or the highest level, of education. Looking at the age cohort of 25-34 year-olds, the percentage of people in Korea who have completed that level of education is 69.8. Then it’s Canada (60.9), Japan (60.4), Russia (57.6), and rounding out the top five is Lithuania (55.6). The U.S. is in 13th place (47.8).

Innovation is at the heart of competitiveness. And education is at the heart of innovation. And innovation leads to technology, development and deployment. Clearly, there is an increasing need in the U.S. to boost education, training and investment to maintain the economic wealth that we have long had. It won’t be easy. But getting here wasn’t, either.