Technical reports

Citation

(1999), "Technical reports", Kybernetes, Vol. 28 No. 8. https://doi.org/10.1108/k.1999.06728hab.004

Technical reports

Technical reports

UN/ECE Publication - Report on World Robotics

Keywords Cybernetics, Robotics, Market trends

Summary of UN/ECE Published Statistics and Forecasts published by the United Nations Economic Commision for Europe (UN/ECE) in cooperation with the International Federation of Robotics (IFR), the World Robotics 1998 Statistics Market Analysis, Forecasts, Case Studies and Profitability of Robot Investment contains a wealth of information, and is a useful guide for cybernetics and systems researchers. A few of its revealing conclusions are that there has been:

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  a record investment in industrial robots in 1997;

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  a robust growth in industrial robot investment is forecast for North America and Europe until 2002 - for Japan and other Asian countries previous forecasts are revised downwards.

And that:

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  the number of robots per employee in industry continues to rise sharply;

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  in the next 10-15 years, dedicated service robots will be used extensively in a wide range of professional applications as well as in homes. A new substantial business area will be created.

The publication World Robotics 1998 - Statistics, Market Analysis, Forecasts, Case Studies and Profitability of Robot Investment is available, quoting Sales No. GV.E.98.0.25, through the usual United Nations sales agents in various countries or from the United Nations Office at Geneva: Sales and Marketing Section, United Nations, Palais des Nations, CH-1211 Geneva 10, Switzerland. Tel: (+41 22) 917 26 06/26 12/26 13; Fax: (+41 22) 917 00 27; E-mail: unpubli@unog.ch

Record investment in industrial robots in 1997

In 1997, a record number of 85,000 industrial robots were installed worldwide, surpassing for the first time the previous record of 1990 (see Table I and Figure 1). In the same period, Japan's share of new robot installations fell from 74 per cent of the world total to 50 per cent, marking a clear trend towards deceleration of the automation drive in that country. Although the 1997 robot investment in Japan was 43 per cent higher than in the trough year of 1994, it was still only 70 per cent of the record 1990 level. For the USA and the major western Europe countries, on the other hand, robot investment was booming and in both 1996 and 1997 all-time records were set. The 1997 robot investment in the USA, for instance, was almost three times as large as in 1990. In the UK it was 2.5 times larger and about 50 per cent larger in Germany and Italy but only 16 per cent larger in France.

Table I.Number of robots installed in 1997, estimated stock of robots in operation at end of 1997 and forecast for year 2001

Figure 1.Installations of industrial robots 1985-1997 and forecast to 2001 and inclusive

One consequence of the slowdown in robot investments in Japan, compared to the booming 1980s and early 1990s, is that a large share of new robot installations is made up of replacement investment. While almost 43,000 new robots were installed in 1997, the stock of operational robots only increased by an estimated 13,000 units. In other words, more than two thirds of all the new robots replaced older robots.

.... but the value of the world robot market is slightly falling

In 1997, the market for industrial robots, in terms of units, increased by 6 per cent. Total market value, however, fell by about 4 per cent over 1996 to $4.8 billion. This drop in the world market, in dollar value, is mainly explained by the fact that the dollar appreciated against most other currencies. In this context it should be noted, however, that the value of robot shipments only accounts for 30 per cent on average of the total system cost. The market in the USA increased from $485 million in 1990 to almost $1,100 million in 1997. After the record year of 1996, it was expected that the market in Germany would fall back in 1997. The fall was, however, only 13 per cent, in terms of DM, and the market amounted to about 1 billion DM. The market in the Republic of Korea, on the other hand, plummeted by almost 50 per cent over 1996 to $143 million. While the UK market surged by 32 per cent to £66 million, France recorded zero growth and a market of FF 585 million. The Italian market grew by 5 per cent to 410 billion lire.

Forecast to 2001 and inclusive - Europe and North America is catching up

Worldwide investment in industrial robots is forecast to be about 40 per cent higher in 2001 than in 1997. In the six major economies, almost the same growth is projected (see Table I). Taking into account the fact that a raising share of robot investment is directed towards replacement investment, in particular in Japan, the stock of robots in operation is forecast to increase from about 710,000 units in 1997 to about 870,000 units in 2001, an increase of 23 per cent. This forecast is significantly lower than was forecast in previous years, which is exclusively the result of significant revisions downwards of the forecasts for Japan and other Asian countries. While the stock of robots is projected to grow by only 5 per cent in Japan between 1997 and 2001, it is projected to increase between 20 per cent (France) and 50 per cent (USA) in the other major economies (see Table I and Figure 1). Western Europe, excluding the four major economies, is also projected to have a robot stock in 2001 which will be 50 per cent higher than in 1997. One can, therefore, conclude that although Japan continues to be the country with the highest penetration of industrial automation, the balance of automation is swinging back towards Europe and North America.

The robot density continues to rise - more robots per employee

When comparing the rate of diffusion of industrial robots in various countries, the robot stock, expressed in the total number of units, can sometimes be a misleading measure. In order to take into account the differences in the size of the manufacturing industry in various countries, it is preferable to use a measure of robot density. One such measure of robot density is the number of robots per 10,000 persons employed in the manufacturing industry. Employment in the manufacturing industry fell in many countries in the period 1991-1993, owing to the recession. Although the economy recovered in 1994-1996, employment continued to fall in some countries while it stabilized in others. As at the same time robot stocks continued to increase, in particular as from 1995, there was a significant increase in the robot density in 1993-1996 in most countries. In 1997, the employment situation improved in many countries but as the increase in the robot stock outpaced the employment gains, the robot density continued to increase. Japan has by far the highest density of robots. In 1997, it amounted to 277 units per 10,000 persons engaged in manufacturing industries. Germany had the second highest with 90 units, followed by Sweden and Italy with just over 60 (see Figure 2 ). (The Republic of Korea and Singapore would have had the second and third highest density but as these countries have a very high proportion of very simple robots they are for reason of comparability excluded from this ranking.) In the other countries in western Europe, Australia and the USA, the density ranged between about 20 and 40 units.

Figure 2.Number of industrial robots per 10,000 persons employed in the manufacturing industry, end 1997

Figure 3.Number of robots per 100 employees in the motor vehicle industry, end 1996

Figure 3 shows the 1996 robot densities (expressed as the number of robots per 100 people employed) in the motor vehicle industry. In this industry there were nine robots for every 100 persons employed in Japan, four in Italy, between three and four in the USA, Germany and Sweden and about two in France and the UK. These figures would have been twice as large if the density had been measured as number of robots per 100 production workers. As one robot generally performs the tasks of at least two persons it could be said that robots in the Japanese motor vehicle industry correspond to some 20 per cent of the total labour force.

Relative prices of robots continue to fall

The unit value of robots for USA, Germany, Italy, France and the UK peaked at just under $110,000 in 1991. Since 1990, there has been a continuous fall in the unit price of industrial robots. In terms of national currencies, the unit price fell by 21 per cent in the USA between 1990 and 1997. In the same period, it fell by 25 per cent in Germany, 19 per cent in the UK and a record 41 per cent in France. In Italy, on the other hand, it fell by only 5 per cent. The relative price of robots, i.e. the price of robots for a given set of performance indicators, in relation to labour costs has been falling rapidly. Since 1989. prices of robots relative to employee compensation in the business sector have fallen by between 30 and 50 per cent in the USA, Germany and France, although there was a slight reversal of this trend in 1996 in the first two countries. It should be noted, however, that these calculations of relative prices do not take into account the improvements made in the quality and efficiency of robots, factors which would, if included, have made relative prices fall even more. Data on different types of robots being installed strongly indicate that for many countries there has been a gradual shift towards a higher share of more sophisticated robots. The calculations of relative prices above thus underestimate the true relative prices. With rising labour costs and falling price/performance ratio for robots, manual operations will successively be replaced with robotic solutions.

Figure 4.Index of labour compensation in the business sector and unit price of robots in the USA

Figure 4 compares the index of labour compensation in the business sector in the USA with the index of the average unit price of robots being installed, illustrating the widening gap between the two indices, the so-called "crocodile gap".

Motives for investing in robots

Readers of Kybernetes will also be intrigued at the report's views on what constitutes the motives for investing in robots. Apparently, the reduction of labour costs is not the only objective.

The reduction of labour costs is of course a major motive for investing in industrial robots. With falling prices of robots relative to labour costs, robots are increasingly becoming a cost-effective alternative to labour. There are, however, several other motives for investing in industrial robots. The following ones can be mentioned:

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  Reduction in material costs. In spray painting applications, e.g. of cars, there are examples where the targeted return on investment was almost exclusively achieved through a very significant reduction of paint consumption.

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  Higher quality. Subcontractors to the automotive industry and the electronics industry, for instance, in order to stay in business, must be able to certify that they can deliver components with zero faults and within given limits of tolerance. In many cases the only way to achieve these objectives is through robots and automation.

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  Flexibility in the production volume. Very often the targeted return on robot investments is based on the requirement that the robot operates in two shifts. If demand increases robot cells can easily be operated in three shifts without extra personnel. This also implies a higher degree of utilization in other pieces of equipment in the production system.

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  Improvement of the working environment. Robots are often used in work processes involving heavy lifts, e.g. servicing machine tools with heavy work pieces, repetitive work, e.g. assembly or servicing machines with very short process cycles, handling of dangerous chemicals, human presence in an environment with heat and smoke (foundries, furnaces) or as mentioned above in secluded spray painting boxes. In all these work processes robots eliminate bad working conditions. As is illustrated in Case Study 4 of the present publication, the main reason for a small company in Sweden to invest in a robot cell was that it had difficulties in recruiting machine operators because of bad working conditions and a general shortage of labour in the region where it was located. Some of these motives are illustrated in four case studies (from the USA, Germany and Sweden) which are included in the present publication. Generally, robot investment has a pay-off time of about two years.

Robotic applications

The publication World Robotics 1998 also considers the impact and application of robots in a number of areas. These include sections on:

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  the food and agricultural industries; and

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  major application areas for service robots.

In the former, it is reported that the robotization drive has not yet taken off as previously projected and in the latter section it says that service robots is an area which is expected to take off in the next 10-15 years,

More information about the publication World Robotics 1998 from Mr Jan Karlsson, Statistical Division, United Nations Economic Commission for Europe (UN/ECE) Palais des Nations, CH-1211 Geneva 10, Switzerland. Tel: (+41 22) 917 32 85; Fax: (+41 22) 917 00 40; E-mail: jan.karlsson@unece.org or International Federation of Robotics (IFR), Box 5506, S-114 85 Stockholm, Sweden. Tel: (+ 46 8) 782 08 43; Fax: (+ 46 8) 660 33 78.