5 areas in Robotics that will transform society and their economic impact

If you have been hearing about Thomas Piketty’s ‘must read’ book, Capital in the Twenty-First Century, you might have heard one of his central tenets is that economic growth is driven by deep structural factors related to demographics and technology rather than policy changes.

It is feasible that between 2017 and 2025 we will see much of this economic growth Piketty has documented brought about by advances in robotics, and yes there will also be inequality that he has referenced, but there are at least 5 areas in robotics that can have a positive impact on society, economically and functionally.

Robotics is at an inflection point — a bend in the curve where many technologies that used to be found only in science fiction are becoming everyday reality.

I have documented 5 areas in robotics that will lead to structural change below. I’m deliberately omitting Industrial Robots from this list, although I do believe that more flexible robots such as those from Universal Robots, Unbounded Robotics and Baxter from Rethink Robotics will have a major impact on the workplace. Estimating the global manufacturing labor costs at $6 trillion annually, McKinsey forecast that advanced robotics could have an economic impact on the manufacturing sector of between $720 billion to $1.45 trillion annually.

Likewise I am omitting ‘service robots for personal and domestic use’ such as robots that will help the elderly or take over household chores. Whilst there are some advances in this area, and many agree it could be a trillion dollar market, the early growth of what is likely to be a multi-billion dollar business will come from automation in our homes with the Internet of Things, Roomba and companion robots for elderly care (More than 1,000 Paro therapeutic robots are being used in Japanese hospitals and nursing homes and the same number is claimed to be used in Denmark). Many trials have shown that robots can have a very positive impact on elderly care and I do believe this segment will grow considerably in the coming decades, despite the misgivings from a recent Pew study which indicated some 65% of American respondents to their survey consider robot caregivers would be ‘worse’ for society.

Technologies like 3D printers will begin to unleash breakthroughs in manufacturing, enabling smaller batches of highly customized products at declining price points. Whilst I believe that 3D printing will be a huge market – it does not fit the mould of pure robotics, although the two can complement each other.

I have also omitted military uses of robotics from this list, a market that is already significant and set to ‘explode economically’ over the coming years.

The 5 areas in Robotics, which are already here, that I believe will have a major economic impact and help to transform society over the next decade or so are:

  1. Drones
  2. Medical Procedures, Operations and Health
  3. Prosthetics and Exoskeletons
  4. Artificial Assistants
  5. Driverless Cars

To quote William Gibson: “the future is already here – it’s just not evenly distributed.”

  1. Drones

BI DronesUnmanned Aircraft Systems (UAS), or drones, are currently principally used by the military, but there is a growing demand for non-military usage in the civil environment for a number of governmental functions, like policing, border control, search and rescue, fire fighting, ground traffic surveillance, and pollution control. There is also a strong recognition that lightweight low altitude drones can be a valuable solution in commercial ventures such as farming, logistics, mapping, real-estate sales and inspection, oil and gas pipeline monitoring cinematic filming and security monitoring.

The list of potential uses is vast. Whilst regulations are being discussed in the US and Europe, drones have already being deployed for prescription drug delivery in Germany, crop spraying and inspection in farming, wildlife protection in Africa, drug monitoring and border control and policing in various States and energy companies use drones to check the undersides of oil platforms for corrosion and repairs.

The issue is not whether these products will be adopted once the airspace is integrated, but at what rate.

Earlier this year Business Insider forecast that 12% of an estimated $98 billion (equivalent to $11.76 billion) in cumulative global spending on aerial drones over the next decade will be for commercial purposes.

In a comprehensive report the Association for Unmanned Vehicle Systems International (AUVSI) predicted that drones could have a cumulative $82 billion economic impact on the US alone between 2015 and 2025.

On average analysts indicate the commercial and civil small and lightweight drone market could deliver some $10 to $15 billion in global sales by 2020.

The US Federal Aviation Authority estimates as many as 7,500 small commercial drones will be in use, in the US alone, within five years once the necessary regulations are in place.

The next 5 years for drones is very promising. Expect to see drones becoming part of society’s information infrastructure as News agencies, TV companies, photographers, real estate agents, moviemakers, industrial giants, pizza deliveries, logistic companies, local governments, agriculture and others embrace drone technology.

  1. Medical Procedures and Operations

The US Roadmap for Robotics indicates that several major societal drivers for improved healthcare access, affordability, quality, and personalization can be addressed by robotics technology. The Report states: “It is essential to continue to develop and deploy robot systems for improvement in medical procedures and to reduce the overall cost of care.”

I split Medical Robots into three areas: Diagnostic systems, Robot-assisted surgery and therapy and Rehabilitation systems.

Medical robotics is considered one of the success-stories of service robotics and has great potential to revolutionize clinical practice by:

  • Facilitating medical processes by precisely guiding instruments, diagnostic equipment and tools for diagnosis and therapy.
  • Improving safety and overall quality of the medical surgery
  • Enhancing the cost-effectiveness of patient care
  • Improving the training and education of medical personnel through the use of simulators
  • Promoting the use of information in diagnosis and therapy.

Surgical robots improve the accuracy of procedures and thus reduce the complication rates in surgeries. Apart from being accurate, robotic procedures also offer significant cost savings in terms of pre- and post-operation care costs and length of stay at hospitals.  There are large numbers of academic papers attesting to the superior outcomes delivered by medical robotics and much analysis on the cost benefits.

IBM’s Watson may become the best diagnostician in the world and be greatly in demand contributing billions to IBM’s sales whilst potentially saving millions of lives.

The global medical robotic systems market was worth $5.48 billion in 2011 and is expected to reach $13.6 billion in 2018, growing at a compounded annual growth rate of 12.6% from 2012. Surgical robots are expected to enjoy the largest revenue share.

The costs and the benefits of medical robots are significant and I believe this sector will continue to grow enormously.

  1. Robotic Prosthetics and Exoskeletons

Every day, at least 500 people in the United States undergo an operation to amputate one or more of their limbs. More than 80 percent of those surgeries are vascular-related, caused by conditions such as diabetes or heart disease. According to the Amputee Coalition two million American live with the loss of a limb, the number is expected to double in the coming decades as people live longer.

Prosthetics and exoskeletons offer major improvements in the life of people that may have lost a limb, or have another movement disability. Many modern prosthetics now contain microprocessors, sensors and actuators to improve their functionality.

The field of prosthetics is now evolving into making exoskeletons; these wearable, ‘bionic devices’ enable wheelchair users to walk again. Professor Illah Nourbakhsh says prosthetics does far more than just allow someone to walk. “We are headed to where people will have robotic legs instead of a wheelchair,” he says. “It changes the relationship we have by being able to physically see eye to eye with someone, how a whole conversation goes.

The economic market is currently quite small, somewhere around $100 to $150 million, however with the recent advances of prosthetics and exoskeletons it is expected to grow considerably to over $1.5 billion in the next 3 to 5 years and higher still thereafter.

  1. Artificial Assistants

This domain has the largest possible early impact on the largest number of people. Artificial Intelligence pioneers such as Google Director of Engineering Ray Kurzweill have indicated anyone with a smartphone or tablet will be using ‘cognitive assistants’ by 2017.

The European Union have provided estimations of the 2013 AI market at €700 million (or $959 million), and expect it to grow exponentially over the coming years, exceeding €27 billion (or $35 billion) by 2015. Much of this will be in cognitive artificial assistants.

Google, Microsoft, Apple, Intel and IBM are spending hundreds of millions of dollars in research and development costs to advance the capabilities of these cognitive assistants and capture market share.

Google CEO Larry Page further acknowledged his company’s efforts to pursue AI for the sake of increased productivity through ‘Google Now’ at the TED 2014 conference. Whilst explaining the rationale for Google’s acquisition of DeepMind he said: “Imagine if this kind of intelligence was thrown at your schedule.” This is also something that has been echoed by Google Executive Chairman Eric Schmidt and many others in the industry.

As I wrote in my Harvard Business Review article: The more I use this technology the more it recognizes how I break down tasks and the times of day I am most productive, ensuring that I am most efficient on high priority tasks. The ability of today’s cognitive assistants is really quite remarkable, but it is just the beginning.

Thanks to continued progress by A.I. researchers, the long-imagined potential of cognitive assistants is finally arriving. As robots become increasingly intelligent, so too will we.

  1. Driverless Cars

Morgan Stanley DCarsAutonomous vehicles, including the iconic Google self-driving cars, will be on the road commercially before 2018. The long-term impact on society of self-driving cars and other autonomous vehicles will be a radical change in how we commute. There will also likely be a sharp reduction in traffic accidents, the majority of which are caused by human error.

Gary Silburg and Richard Wallace of KPMG have written: Driverless cars “technology could provide solutions to some of our most intractable social problems — the high cost of traffic crashes and transportation infrastructure, the millions of hours wasted in traffic jams, and the wasted urban space given over to parking lots, just to name a few.”

Quantifying the economic impact over the next decade is likely to be in the tens of billions of dollars.

Driverless cars have the potential to fundamentally alter transportation systems by averting deadly crashes, providing critical mobility to the elderly and disabled, increasing road capacity, saving fuel, and lowering emissions. By 2035 to 2050 Morgan Stanley predicts annual $1.3 trillion in savings in the United States (with over $5.6 trillions globally) from driverless cars.

There are still many obstacles before driverless cars are available commercially but advances are being made and they could be with us sooner than we think.

It’s a very exciting time in robotics, representing huge opportunities; which will have a very positive affect on society. As these technologies become integral to our daily life we will see the benefits even more.

Chinese city aims to have 80% of production done by Robots by 2020

South China’s economic powerhouse of Guangzhou has set a goal of having 80 percent of the city’s manufacturing production done by robots instead of human labor by 2020.

According to an industrial development guideline issued by the municipal government on Tuesday, the use of industrial robots will be encouraged in mechanical and automobile manufacturing, food processing and the manufacturing of pharmaceutical, electronic and dangerous products.

The document says that there will be subsidies of up to 30,000 yuan (4,800 US dollars) for those who purchase or rent a robot, and a maximum one-off subsidy of 500,000 yuan for companies that introduce a complete set of automation equipment in Guangzhou, capital of Guangdong Province.

The Guangzhou municipal government believes the rising human resource costs and increased demand for sophisticated manufacturing have provided an opportunity for accelerated roll-out of robots. Fostering a robot-making industry with estimated output value of over 100 billion yuan (US$16 billion) by 2020 Source Global Times China. (HT Iza Kaminska)

5 Reads in Robotics, Artificial Intelligence and Technology

Emotional AI: The Human Side of Machine Learning (O’Reilly Media)

Tech Leaps, Job Losses and Rising Inequality (The New York Times)

Every Drone Mission the FBI admits to Flying (Motherboard)

The effects of trade and technology on employment (David Autor at The Royal Economic Society)

The global market for AI is set to grow from €700 million ($959 million) in 2013 to €27 billion ($35 billion) in 2015, according to a report from the European Union (Mark Vickers).

Study indicates Robots could replace 80% of Jobs

PerezIn a few decades, twenty or thirty years — or sooner – robots and their associated technology will be as ubiquitous as mobile phones are today, at least that is the prediction of Bill Gates; and we would be hard-pressed to find a roboticist, automation expert or economist who could present a strong case against this. The Robotics Revolution promises a host of benefits that are compelling (especially in health care) and imaginative, but it may also come at a significant price.

The Pareto Principle of Prediction

We find ourselves faced with an intractable paradox: On the one hand technology advances increase productivity and wellbeing, and on the other hand it often reinforces inequalities.

A new study due to be published in the forthcoming Oxford Handbook of Skills and Training by Stuart Elliot visiting analyst at the Organisation for Economic Co-operation and Development (OECD), who incidentally is on leave from the Board on Testing and Assessment of the National Research Council, indicates that technology could replace ‘workers for 80 percent of current jobs.’

In his study Elliot relies on advances in speech, reasoning capabilities and movement capabilities to illustrate how robots and technology can replace jobs. I am in agreement with the general thoughts of the study, although I believe speech recognition is now far more advanced than Elliot states. This element alone will lead to a reduction in many jobs, such as translation over the next five years.

Elliot is not the first to claim that robotics and technology will have such a profound impact on employment or inequality. Michael Hammer, a former MIT professor and prime mover in the restructuring of the workplace in the 1990’s estimated that up to 80 percent of those engaged in middle management tasks were susceptible to elimination due to automation.

In the book Average is Over Professor Tyler Cowen also predicts a hollowed-out labor market, devoid of middle-skill, middle-wage jobs, where 80% or more of our citizens will be unable to prosper. They will become a permanent underclass, unable to improve their lot.

This ‘underclass’ may be happening sooner than Cowen predicted. While there are ‘short term’ adjustments in the employment numbers, the majority are in the low-paying sectors, 73% of ‘new’ jobs are in the bottom of the wage pyramid and temporary employment positions rather than permanent.

The US Bureau of Labor Statistics estimates that among the most rapidly growing occupational categories over the next ten years will be “healthcare support occupations” (nursing aides, orderlies, and attendants) and “food preparation and serving workers” – overwhelmingly low-wage jobs.

Projected job marketAs recent as last month the FT reported that: “New technologies are transforming the structure of the US economy but creating only modest numbers of jobs, according to the biggest official survey of businesses, conducted only once every five years.”

In the book Race Against The Machine the authors state: “Digital technologies change rapidly, but organizations and skills aren’t keeping pace. As a result, millions of people are being left behind. Their incomes and jobs are being destroyed, leaving them worse off.”

Speaking at the World Economic Forum in Davos earlier this year, Google’s Eric Schmidt warned that the problem of new technologies substantially changing and replacing jobs will be “the defining one” for the next two or three decades.

Thinking machines

Increasingly, machines are providing not only the brawn but the brains, too, and that raises the question of where humans fit into this picture. Earlier this year, Jörg Asmussen State Secretary in the German Ministry of Labor and Social Affairs emphasized this trend when he said:

“Digitization, or the “second machine age” (as in the title of the best seller by Erik Brynjolfsson and Andrew McAffee), has only just begun. It is in the process of relieving and ultimately replacing first our physical and then our intellectual labor. This trend will be a threat to brainworkers such as accountants and stock-market traders. And check-out clerks at supermarkets will also soon be a thing of the past.”

Echoing this, Randall Parker, Professor of Economics at East Carolina University, recently wrote:

“Robots and other automated equipment have increased factory automation so much that factories are a dwindling source of all jobs. The next big target for automation has been and continues to be office work.”

In the US manufacturing sector there was a solid increase in sales of 8 percent between 2007 and 2012 but with significant falling employment, the industry shed 2.1m jobs and its payroll dropped $20 billion.

Approximately one out of 25 workers in Japan is a robot, this is in part due to a growing elderly population and declining birthrates, which mean a shrinking workforce, but it is also a fact that global business seeks to drive productivity, efficiency, and effectiveness to new heights with robotics.

This time is different, or maybe not

In his seminal book, The Enlightened Economy, Joel Mokyr argued that: “in Britain the high quality of workmanship available to support innovation, local and imported, helped create the Industrial Revolution.” Dig a little further and Mokyr refers to: “the top 3 to 5 percent of the labor force in terms of skills: engineers, mechanics, millwrights, chemists, clock and instrument makers, skilled carpenters and metal workers, wheelwrights, and similar workmen.”

It was a small minority of the working population that had the skills to help advance the Industrial Revolution, others had to learn new skills to adapt to the technology changes. This time is no different. Just as each revolution sets a higher potential level of productivity each revolution requires a new set of skills to overcome the resistance of the old paradigm, which is deeply embedded in the minds and the practices.

Despite the job losses in the US manufacturing sector factories are increasingly employing more skilled engineers to tend complex equipment and at higher wages, Annual payroll per employee in the manufacturing sector rose from $45,818 in 2007 to $52,686 in 2012.

It’s time to act

Robotic hardware, Artificial Intelligence, automated software and connected networks are only going to get more powerful and capable in the future, and have even bigger impact on jobs, skills and the economy.

The message for all of us can be summed up in a quote from Abraham Lincoln’s second address to Congress.

“As our case is new, so we must think anew, and act anew.”

In his paper Elliot raises a very good question: “Even if alternative jobs are available, how will the displaced workers acquire the necessary skills for the new tasks?” This should be a wake up call. All of us must give serious consideration to our future and learn the skills that will give us the best chance of working WITH the machines. I’ll repeat Lincoln’s statement, since that’s the big takeaway. “As our case is new, so we must think anew, and ACT anew.” These are exciting and challenging times…

Why Your Employees Should Be Playing With Lego Robots

My latest post on Harvard Business Review is now live:

Using robots in training programs to overcome challenges pushes participants out of their comfort zone. It deepens their awareness of complexity and builds ownership and responsibility.

The array of skills and work techniques that this kind of training offers is more in need today than ever, as technology is rapidly changing the skills demanded in the workplace.

Instead of programming people to act like robots, why not teach them to become programmers, creative thinkers, architects, and engineers? Read more on HBR.org

The next 5 years for Drones

Helen Greiner who co-founded iRobot 14 years ago spoke yesterday at the DEMO conference. Helen is now the co-founder and CEO of CyPhy Works, a startup developing flying robots or drones (not quite Unmanned Ariel Systems) for industrial applications. In her brief DEMO Labs talk (see video below), Helen takes us through the next five years of drones — from hobbyist toys to industrial surveillance and retail delivery. Helen indicates: “The next wave of robots will be flying robots.”

CyPhy Works

As Helen says: “Anywhere it is hard to get eyes to the right places, that is a good job for drones”

5 Friday reads in Robotics, Artificial Intelligence and Driverless Cars

The Future of Artificial Intelligence – In Conversation with Cognitive Psychologist with Gary Marcus (PBS)

DARPA’s New Biotech Division Wants to Create A Transhuman Future (i09.com)

Will a World of Driverless Cars be Heaven or Hell (Atlantic Cities)

Daniel Dewey of The Future of Humanity Institute Oxford, Thinking Carefully About Artificial Intelligence (Podcast and interesting resources)

Robot exoskeleton lets girl lift her arms, reach for the stars (CNN)

Make that 6 reads…

Bringing the Robot Revolution Closer — Making Affordable Robotic Humanoids and Hands (TechnologyReview) (Hat Tip )