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January 10, 2022

Robotics in Medical (2021): Macroeconomic trends

By GlobalData Thematic Research

Robotics has a long history, but only recently have conditions aligned to unlock its full potential. Those conditions are technological, economic, and demographic. Medical robotics is a fast-growing field in the medical device industry, with the surgical robotics segment leading the market.

Listed below are the key macroeconomic trends impacting the robotics theme, as identified by GlobalData.

China

China’s global economic and industrial impact is obvious. Despite being the first country hit by Covid-19, it remained the world’s biggest car manufacturer in 2020. More than 33% of the global semiconductor production is consumed by China, as is 38% of the industrial robot market. In addition, it is the world’s largest consumer of key raw materials such as copper, sand for construction, lithium, cobalt, and rare-earth elements.

Under the Made in China 2025 plan, the country aims to be on par with the US, Japan, and South Korea in such strategic industries as semiconductors, robots, batteries, and supplant them in artificial intelligence (AI). On the latter, it has the advantage of the world’s richest and most scalable data sets for its algorithms to work on and state backing for the R&D efforts of its AI national champions, including Baidu, Alibaba, Tencent, and iFlytek.

In robotics, China’s native robot companies are still no match for the likes of FANUC. However, Midea’s acquisition of Germany’s KUKA gave China control of a leading industrial robot company.

Japan

Robots already dominate Japan’s factories where its industrial robot makers – FANUC, Kawasaki, and Yaskawa – are world leaders. Japan has the world’s third-highest industrial robot density, after Singapore and South Korea, according to the International Federation of Robotics (IFR).

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Increasingly, robots are permeating Japan’s services industry, not least in caring for the elderly. The nation showcased its robotics capabilities at the 2020 Tokyo Olympics, postponed to 2021 due to Covid-19. The country aims to highlight its technical prowess and open major export markets in the process.

Japan is also the world’s largest manufacturer of precision mechanical parts for robots, with leading Japanese robotic component manufacturers including Harmonic Drive, Keyence, Nabtesco, Nachi Fujikoshi, Omron, and Nippon Ceramic. The country is also at the forefront of the adoption of social, personal, and therapeutic robotics.

Europe

The European Union (EU) seems to be waking up to the risk of being left behind technologically. Reports emerged in 2021 that the EU Commission is developing a plan to rival China’s Belt and Road Initiative. The plan does not have a name yet but is rumoured to include significant technological investment.

Germany leads the rest of Europe in both the production and adoption of robots. Germany’s factories have the highest robot density in Europe. KUKA, the only European player among the leading industrial robots companies, is headquartered in Bavaria, one of Germany’s richest and most industrialised states. However, as a region, Europe’s robotics companies struggle to compete with those of Japan and the US.

One factor that might trigger a robotics revolution in Europe is demographics. Just like in Japan and South Korea, Europe’s population is ageing, and some of the most promising robotics start-ups are emerging in the care robots segment. One example is Kompaï Robotics, a French company that developed a multifunctional robot in 2021 to assist vulnerable people.

The future of work

Robotics is impacting work by both changing production lines and, in some cases, replacing human workers. Robot technologies such as co-bots and logistics robots are coming together to turn factories into advanced engineering labs where assembly line processes and components are constantly analysed, streamlined, and improved. The leaders in this kind of factory of the future are the industrial robot leaders (FANUC, KUKA, ABB, and Yaskawa), in partnership with technology providers like Cisco, Hitachi, Rockwell Automation, Huawei, and Japanese AI start-up Preferred Networks.

Unions, policymakers, and social scientists are increasingly concerned that automation will lead to increased unemployment. Each industrial robot can replace several human workers, so these worries do not seem unfounded.

In Japan’s care homes, robots reduce the need for night shift nurses, liberating some workers from working unsociable hours and addressing a staffing shortage in this sector. In cases such as this, the impact of robots has been positive. Freeing human workers from doing dangerous, repetitive, or unsociable work is a positive development, particularly if the economy can create higher-value jobs for those workers that robots have replaced. It is not yet clear that that will always be the case.

According to the IFR, South Korea has the second-highest density of robot workers globally. South Korea also had the world’s lowest fertility rate in 2020, with Japan and Germany not far behind. Thus, if automation presents risks to labour, robotics can also help address future shortages in the workforce.

Industry diversification

Robotics remains disproportionally reliant on the automotive industry. According to IFR data published in 2020, 60% of all industrial robots in 2019 were deployed in automotive factories. However, other industries increasingly use robots as well. For example, robotics orders from electronics, machinery, plastic, chemical products, and food processing companies have increased.

The widening of the robotics market will favour all stakeholders, including car manufacturers, as it is likely to lead to more innovation. Diversification also makes all players involved in the robotics value chain more resilient, as they become less dependent on a single industry.

This is an edited extract from the Robotics in Medical Devices, 2021 Update – Thematic Research report produced by GlobalData Thematic Research.

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