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Are sales of robots overstated and overhyped?

Car Factory Assembly LineResearch finds Robot sales in 2014 may be overstated by approximately 100,000 units 

Abstract – Based on our analysis of legal compliance documents and other sources  – we analysed manufacturing capacity and revenue of Yaskawa, ABB, Fanuc and Kuka Robotics, who together supplied close to 70% of the world robot market in 2014, and others, and concluded that there were approximately 128,000 industrial robots delivered in 2014, significantly less than the approximately 230,000 the industry claims.

We also discovered, by compiling multiple data sets that could be replicated, that there are currently 850,000 installed and operational robot units in service worldwide.

In Robotics, just like in much of life, historical myths have perhaps played nearly as great a role in shaping opinion as historical facts.

Thomas Piketty in his book Capital in the Twenty-First Century bemoans that much of social policy and public knowledge of statistical facts are created on the back of: “reports <that> must often rely on heroic hypotheses and approximations, not all of them convincing.” He goes on to write that: “in the absence of reliable information… it is possible to say anything and everything and to feed fantasies of all kinds.”[1]

Piketty also reminds us in his extensively researched book with comprehensive data that: “economic theory needs to be rooted in historical sources that are as complete as possible.”[2]

As our heads swirl in a number of announcements on record sales of robots which are causing growing productivity claims, but leading to the erosion of jobs and as a consequence greater inequality, Isn’t it time to ask what historical sources can we rely on for sales of industrial robots?

The more reliable the data, the more we can analyze the impact robots are having on jobs. After all, every day, these robots that historically performed dull, dangerous and dirty jobs to produce the cars we drive, the goods we use and the foods we consume are increasingly moving into healthcare and other sectors.

What the industry claims

The latest reported statistics for worldwide sales of industrial robots indicate a ‘record number of 229,261’ were sold during the 12 months to the year-end 2014.[3] Additionally Statista and the IFR had indicated approximately 225,000 sales in 2014[4] Furthermore the IFR claimed that “The total worldwide stock of operational industrial robots at the end of 2014 increased by 11% to about 1.5 million units.”[5] This may lead to a case of what we believe, or what we think we know, about the annual sales of and total number of installed robots is dependent on data that may not mean what we think they mean. Indeed using Piketty’s model this data would not be accepted as truly objective -conclusions drawn from them must be somewhat tenuous.

Yet, the datasets announced by the industry federation have led to government policy discussions and detailed economic studies on robot outcomes such as employment, total factor productivity and wages. With one important study using the IFR data and concluding that robots are: “fairly comparable to the estimated total contribution of steam technology to British annual labor productivity growth” during the industrial revolution.[6]

Objective data

Until there is a truly independent source of robot units in operation then in the meantime to obtain objective and reliable data of robot sales one would reasonably think the most complete and reliable data would come from legally reported publically available formal compliance documents such as annual reports, 20F filings, 10K filings, legally released press releases, statements and associated information from the manufacturers and its executives of industrial robots, especially those manufacturers that are listed on a recognized stock exchange, which is the case for the majority of industrial robot manufacturers, at least those that supply some 80% of world robotics sales.

How many robots are sold each year?

During our research we set out to ascertain two things.

  1. How many industrial robots have been delivered and accounted for in sales revenue from the beginning of 2004 to the end of 2014. And;
  2. Which companies use robots and what is the total number they have in operation.

During this process we went further than our initial targets and analyzed 15 years of legal filings for all robot manufacturers (where available) and their customers, together with associated reports from the manufacturers, detailed discussions with users of robots and in some cases factory visits. This analysis has resulted in an extensive database of installed robots including which robots are in use, what are their functions and at which location.

What we found:

  • There were approximately 128,000 industrial robots delivered worldwide in 2014.
  • The top four robot manufacturers delivered a combined 89,000 robot units, which they claimed represents 80% of all robots delivered. We found that the top four manufacturers total delivered robot units amounted to approximately 70% of the total robot units delivered in 2014.
  • There were between 800,000 and 850,000 robots installed and operational worldwide between 2004 and 2014 – around 650,000 less than the approximately 1,460,000 to 1,500,000 numbers reported on the Statista and IFR charts.
  • The robot manufacturers collectively indicate single digit sales growth in 2014 compared to 2013 on average.

As we can see in the analysis below the numbers were obtained from the robot manufacturers legal compliance documents, self-reported total cumulative sales of robots, and the production capabilities of those robot manufacturers (how many robots each manufacturer can produce).

To double-check our numbers we have created two complimentary and indispensable datasets. Although in some case the information received may not be perfect as to some extent it is reliant upon the manufacturers marketing claims, albeit in legal compliance documents. Nevertheless we have analyzed the sources and methods in minute detail and found comparison data from other sources in an effort to lead to clear, transparent and reproducible datasets.

In addition to the annual sales of robots reported by robot manufacturers in their legal filings we have also compiled a detailed database of robots installed. This database ranges from the 780 active robots at the Nissan plant in Sunderland, in the north east of England, to the 387 active robots at that the Porsche Macan factory in Leipzig, Germany. This total database reflects the current base of installed robots to be between 750,000 and 800,000.

Essentially we have used multiple sources and data points to compare and contrast installed robots worldwide.

See the footnote below for the definition of industrial robots.[7]

How many robots were delivered in 2014?

For the purpose of this article let’s take a look at the numbers for 2014 as legally reported in compliance documents and compare the legally reported sales of robots with the claim of approximately 229,000 delivered robots in 2014 as reported elsewhere and referenced above.

The top 4 industrial robot manufacturers

Yaskawa bill themselves as the leading Japanese robot manufacturer who: “introduced the first commercially available robot to the industry in 1977” and had delivered “cumulative shipments <since 1977> surpassing 290,000”[8] by the end of March 2014 and ‘more’ than 300,000 by the end of 2014.[9]

Yaskawa generated 136 billion Japanese yen (or about 1.13 billion U.S. dollars) in net sales revenue from its robotics segment for the year ended March 2015 according to its legally filed annual report. Which represents a nominal increase of approximately 9% on the financial year commencing from 1st April 2013 through to the end of March 2014. The various statements made by the company and financial income recorded by Yaskawa would indicate that they delivered between 19,000 and 21,000 industrial robots in the year to March 2015.[10]

The company has been very transparent on its production capacity and expects to add considerably to its production capabilities since it opened a new factory in China in 2013:[11]

In the robotics business, the production of robots at the plant in Changzhou, China, which was launched in May 2013, will be ramped up as annual production of approximately 4,000 units and annual production of approximately 6,000 units are planned for FY2014 and FY2015, respectively.

By which time (end of 2015) Yaskawa will have a total robot production capability of 2,500 industrial robots per month, or 30,000 per year:[12]

The breakdown of our production plan as of 2015 has changed from domestic production (Kitakyushu, Japan) of 1600 units per month and Chinese production of 900 units per month to domestic production of 2000 units per month and Chinese production of 500 units per month by shifting part of the Chinese production plan to domestic production.

Which represents a leap in production capabilities compared to the revenue recorded of approximately 21,000 robot sales for the year under review.

Before the addition of the China plant, Yaskawa had an annual production capacity of 19,200 robots in Japan (“Previously, we have produced robot bodies only in Kitakyushu Japan.”)[13]

The company has also expressed its hopes that this extra production capacity together with production in a new plant in Japan (Nakama City, Fukuoka Prefecture) which will begin in August 2015, will help it to increase its share of the global industrial robot market from 20% to 30%:[14]

At present, in the industrial robot global market, each of the top four companies including Yaskawa holds a share of around 20%. Although we boast of the highest cumulative shipping performance among our competitors, we have a desire to be an overriding leader by realizing a 30% share of the global market.

Based on the company records and production capabilities for 2014 we can safely estimate that they delivered 21,000 industrial robots from 1st January 2014 to 31st December 2014.

If 20% of the robot sales equals 21,000 what are we to think?

If we are to believe that Yaskawa deliver 20% of industrial robots per annum we could stop our analysis assuming that the top 4 companies have approximately 80% of the market and annual sales of circa 18,000 to 22,000 on average each, and thus the total market had global annual sales and production capability of approximately 110,000 at the end of 2014. In other words based on Yaskawa’s claim of producing 20% of the global robot sales and 3 others produce an additional 60% — this 110,000 is considerably lower than the 225,000 robots delivered as otherwise reported. However, we can’t take one companies word for it and proceed with our analysis of what other manufacturers in the sector state.

Assessing the other leading robots makers legal submissions

In it’s legally filed compliance document “ABB Annual Report 2014”, the company states:[15]

ABB is a leading supplier of industrial robots and modular manufacturing systems, and has installed more than 250,000 robots worldwide.

Which interestingly is a similar number declared in the legal compliance document “ABB Annual Report 2013” for the financial year ended 31st December 2013:[16] “Since 1974, ABB has delivered 250,000 robots for a wide variety of industries.” The difference between the two statements is ABB’s use of the phrase “more than” in its 2014 filing. The number of 250,000 is however 60,000 more than the: “190,000 installed worldwide,” reported on it’s legally compliant corporate website on 7th July 2011 and elsewhere.[17]

Let’s keep in mind the ‘more’ than 250,000 of total delivered robot units since they began production of robots in 1974 up to the end of 2014

Now let’s take a look at several other factors; a) ABB’s stated reorganization in the robotics division during the 3 and half year period from mid 2011, b) the long lead times from receipt of orders to delivering the final products, c) ABB’s annual manufacturing capabilities for robots, and d) numbers from ABB’s reported revenue indicators from their annual reports and SEC filings from 2004 through 2014. In 2013 and 2014 these data points indicate ABB had annual revenue applicable to sales of a maximum of 22,000 robots each year (2013 and 2014).

As a side note — it is also worth noting that ABB indicates in its 2014 annual report that sales for the division responsible for robotics grew by 2% from 2013 to end of 2014 (it is possible robotics grew more within this division and other automation products performed lower comparatively). See for example ABB’s statement in its SEC 20F filing for the year ended 2014:

Supported by growth in the second half of the year, orders in the Discrete Automation and Motion division grew 2 percent (2 percent in local currencies), as higher orders in the Robotics business and the positive impact of acquiring Power-One.[18]

What we can decipher from the numbers reported is that delivered robots, those actually sold and counted in revenues appear to have grown in the single digits versus 2013. This is similar to the single digit growth numbers reflected at Yaskawa of 9%.

Additionally ABB is very diligent at formally announcing robot sales orders received and providing many case studies of companies using its robots. Through these legal press releases, whilst for multiple reasons not all sales orders of robots are announced, we can further build our understanding of the activity related to orders received and clients usage of ABB’s robots – and therefore ascertain extra data when arriving at the number of total robot sales.

Building the numbers

Now we know that ABB and Yaskawa, arguably among the largest providers of industrial robots, and both of whom delivered and recorded sales revenue of 22,000 robots and 21,000 robots respectively in 2014 or 43,000 collectively, and thus (theoretically) 40% of total robots delivered, how did the other robot manufacturers perform and what are the real total annual sales of industrial robots?

Like Yaskawa, Fanuc headquartered in Japan commenced commercial production and shipment of Robots in 1977. For the fiscal year ended 2015 Fanuc recorded sales of Japanese Yen 181,988 millions or USD 1,516,567.[19]

This represents sales of approximately 24,000 to 26,000 robots in the year reviewed, based on competitive sales analysis and recorded knowledge of individual robot costs.

Fanuc, who uses many of its own robots producing robots states, that it’s “Robot Factory has a capacity to produce 5,000 robots a month.”[20] Which would give it the largest production capacity of all current robot manufacturers. However as it’s sales revenue for the robot division shows over the last 10 years, it has not reached this level of production capability, currently producing less than 2,000 robots per month. Which is a significant increase on the 200 to 250 per month the company was capable of producing in 1984.[21]

To help with our analysis of global sales of industrial robots Fanuc claims it has “250,000 robots installed worldwide,” since it began deliveries in 1977.[22] From the companies reported revenues between 2004 and 2014 we can see that 180,000 of these units were delivered over this 10 years period or an average of 18,000 per year (an average which is skewed as it reported sharp declines in robots sales between 2008 and 2011).[23]

For our 2014 compilation, allowing for annual growth and based on the review of Fanuc’s legal annual report we will consider that they delivered 26,000 industrial robots in 2014.

At this stage we can reasonably estimate from the above three companies stated data, albeit some of it marketing material, that they have collectively delivered approximately 800,000 robots since they began deliveries more than 38 to 40 years ago. In the case of Yaskawa circa 300,000 since 1977, ABB claiming 250,000 since 1974 and Fanuc stating 250,000 since 1977. Are we to believe that this 800,000 represents 60% of all robot sales, since robots sales began? The manufactures seem to indicate this to be the case.[24]

Now we turn our attention to Kuka robots of Germany.

Kuka is another company that indicates in its legal annual reports that it delivers 20% of the world’s industrial robots. Kuka also offers us detailed data on its current and target manufacturing capability numbers in its 2014 Annual report.

The goal is to produce more than 20,000 robots per year,” says Andreas Ostermann von Roth, Executive Vice President Operations at KUKA Robotics.[25] And later we read that according to Sebastian Bodenmüller, head of robot production ‘the target number of robots was produced even before 2014 drew to a close.[26]

This would hold up to other statements by Kuka in the same 2014 annual report.

Back in 2013 and during the year under review (2014), annual production capacities in Augsburg were increased from 15,000 robots previously to a current level of up to 22,000 (as at end March 2015).[27]

In addition during 2014 Kuka’s newly opened factory in shanghai China began an annual production of 3,000 Kuka Robots.

Kuka’s order book for 2014 was only slightly ahead of 2013 (by approximately Euro €12 million) as can be understood from this statement in Kuka’s 2014 annual report:[28]

KUKA Robotics exceeded the orders received in 2013 of € 793.5 million with a total of € 805.5 million in 2014. The orders from the automotive industry totaled € 327.9 million in 2014 (previous year: € 318.3 million). Orders received from general industry continued to remain at a high level at € 315.0 million, yet were slightly below the value for the previous year of € 330.9 million.

However Kuka Robotics recorded sales revenues of € 834.6 million (USD $ 941 million) for the year ended 2014, which would indicate delivery of approximately between 18,000 to 20,500 robot units for the year under review.

We will consider the top end and add 20,500 to our list of robot units delivered in 2014.

After the addition of the Shanghai factory and increases in Augsburg Kuka indicate that they will have an annual production capacity of 25,000 robot units.

Total robots delivered over the last 10 years

Crucially, with respect to the ten year period we are assessing, the sales reported in annual reports and associated legal compliance documents for each of these 4 companies indicate that between 2004 and 2014 they have collectively delivered approximately 640,000 robot units over the 10 years analyzed. Representing approximately 80% of total robot sales during the period.

Total robots delivered by top 4 manufacturers in 2014

Now we know that the top 4 manufacturers, who combined supply approximately 80% of the industrial robot sales, delivered robot units as follows in 2014:

Manufacturer   Total delivered
Yaskawa 21,000
ABB 22,000
Fanuc 26,000
Kuka 20,500
Total delivered 89,500

Which effectively would indicate that the total number of industrial robot sales for 2014 was approximately 112,000 units – If as these manufacturers suggest they each have 20% of the market.

How many robots have these companies delivered since they began making robots?

Our analysis has covered all know manufacturers of and their claims of total robots delivered since robots entered the factory floor – as one snapshot we can see that the following manufacturers have delivered approximately 920,000 robots.

Manufacturer Total stated as delivered by manufacturers over approximately 40 years to the end of 2014
Yaskawa 310,000
ABB 260,000
Fanuc 250,000
Kuka 100,000
Total delivered 920,000

Note this 920,000 represents ALL units delivered since these 4 manufacturers began delivering robots, in some cases over a 40 years period.

Robot sales not as high as thought

We analyzed the above companies together with sales and production capabilities of other robot manufacturers such as Kawasaki (claims to have delivered 100,000 units since it began production), Hitachi, Nachi, Stäubli, China’s LXD Robotics, robots’ that are ‘self-built’ by companies such as Foxconn and many others.

What we found

Based on our analysis of legal compliance documents and other sources indicated above – we consider that Yaskawa, ABB, Fanuc and Kuka supply closer to 70% of the world robot market in 2014 (not 80% as claimed) and there were approximately 128,000 industrial robots delivered in 2014.

We also discovered by compiling multiple data sets that could be replicated that there are currently 850,000 installed and operational robot units in service worldwide.

The future – How many robots can be built per year?

The total robot manufacturing capabilities for 2015 of these 4 manufacturers are:

Manufacturer Total manufacturing capability for 2015
Yaskawa 30,000
ABB 25,000
Fanuc 50,000
Kuka 25,000
Total delivery potential 130,000

Despite the current manufacturing capacity for all robot manufacturers being approximately between 180,000 to 200,000 units per annum we believe that this number will increase significantly with the advent of the smaller, more lightweight robots such as YuMi from ABB, Baxter from Rethink Robotics, Inc. Universal Robots and other lightweight models from existing manufacturers, which will greatly increase the number of robots installed worldwide and lead to further job displacement.

Call for National Statistic Offices to assess robot impacts

To overcome the hype cycle of claims and counter claims we need a truly objective database of robots installed and operational. This is something we believe that national governments should be doing as a matter of urgency through their national statistics offices to closely monitor the impact of robots on total factor productivity, employment and wages.

Notes.

This is an abridged discussion of a far more detailed report produced by Robotenomics for our clients.

This specific analysis excludes other robots such as automated guided vehicles (AGV’s) as seen for example in Amazon, Inc. dispatch centers).

[1] Thomas Piketty, Capital in the Twenty-First Century (2014, page 437)

[2] Thomas Piketty, Capital in the Twenty-First Century (2014, page 10)

[3] International Federation of Robotics – 2014: By far the highest volume ever recorded (Last accessed 15th October 2015 – http://www.ifr.org/industrial-robots/statistics/)

[4] “Industrial robot sales increased from about 179,000 in 2013 to around 225,000 in 2014, mainly due to decreased demand in the motor vehicle manufacturing industry.” (http://www.statista.com/statistics/264084/worldwide-sales-of-industrial-robots/) and “Sales go through the roof” – “Based on the preliminary results of the global statistics on industrial robots, the IFR estimates that about 225,000 units were sold in 2014, 27% more than in 2013.” (IFR International Federation of Robotics – http://www.ifr.org/news/ifr-press-release/global-survey-703/ both links accessed on 5th October 2015)

[5] International Federation of Robotics – 2014: By far the highest volume ever recorded (Last accessed 15th October 2015 – http://www.ifr.org/industrial-robots/statistics/)

[6] G. Graetz and G. Michaels , Robots at Work. Centre for Economic Performance
London School of Economics and Political Science (Last accessed 15th October 2014 http://cep.lse.ac.uk/pubs/download/dp1335.pdf)

[7] For the purpose of defining a robot we have used the International Organization for Standardization as defined by ISO 8373 which refers to a manipulating industrial robot as: “An automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes, which may be either fixed in place or mobile for use in industrial automation applications.” And further defined by the International Federation of Robotics as: “An automatically controlled, reprogrammable, multipurpose manipulator programmable in three or more axes, which may be either fixed in place or mobile for use in industrial automation applications. Reprogrammable: whose programmed motions or auxiliary functions may be changed without physical alterations.”

[8] Yaskawa Report 2014, page 15 (Last accessed 6th October 2014 at http://www.yaskawa.co.jp/wp-content/uploads/2014/12/ar2014e1.pdf

[9] Yaskawa Motoman corporate profile (Last accessed 6th October 2015 http://www.motoman.com/about/corporateprofile.pdf)

[10] Yaskawa Report 2015 (Last accessed 5th October at http://www.yaskawa.co.jp/en/wp-content/uploads/2015/01/ar2015_E.pdf)

[11] Yaskawa Report 2014 (Last accessed 6th October 2014 at http://www.yaskawa.co.jp/wp-content/uploads/2014/12/ar2014e1.pdf

[12] Ibid

[13] Ibid

[14] Ibid

[15] ABB Annual Report 2014 | Customer segments (page 19) – Last accessed online 5th October 2015 at http://new.abb.com/docs/default-source/investor-center-docs/annual-report/abb-group-annual-report-2014-english.pdf

[16] What ABB does | ABB Annual Report 2013 (Page 12) – Last accessed online 5th October 2015 at http://www02.abb.com/global/seitp/seitp255.nsf/0/74b9eafca5502c14c1257c850037b8f8/$file/ABB+Group+Annual+Report+2013_English.pdf

[17] “ABB has installed more than 190,000 robots worldwide.” (Archived 3rd July http://web.archive.org/web/20110707074107/http://www.abb.com/product/us/9AAC910011.aspx – on 7th July 2011 and accessed 5th October 2015).

[18] ABB -SEC Filings 20F report 2014 – http://new.abb.com/docs/default-source/investor-center-docs/sec-filings/abb-ltd-2014-form-20f.pdf last accessed 6th October).

[19] Fanuc Annual Report to 31st March 2015, page 29 (Last accessed 6th October 2015 – http://www.fanuc.co.jp/en/ir/annualreport/pdf/annualreport2015_e.pdf)

[20] Fanuc corporate website (Last accessed 6th October 2015 http://www.fanuc.co.jp/en/profile/production/factory1.html)

[21] The International Robot Industry Report. By John Mortimer, Brian Rook

[22] Fanuc EU corporate website, About Us, History (Last accessed 6th October 2015 http://www.fanuc.eu/uk/en/who-we-are/fanuc-history)

[23] See for example Fanuc corporation annual report for 2013 (Last accessed 6th October 2015 http://www.fanuc.co.jp/en/ir/annualreport/pdf/annualreport2013_e.pdf)

[24] Note also that most manufacturers indicate the current life span of an industrial robot is 10 to 12 years.

[25] Kuka Annual Report 2014, Page 15 (last accessed 6th October 2015 – http://www.kuka-ag.de/res/AG/financial_reports/2015/kuka_gb14_e_s.pdf )

[26] Ibid. Page 16

[27] Ibid. Page 23

[28] Ibid. Page 25

Photo credit – Tobias Mikkelsen (Car Factory Assembly Line) Creative Commons on Flickr

5 insightful articles about A.I., Robotics and the jobs debate

How Artificial Intelligence Will Revolutionize Our Lives
On one hand, it may help cure cancer and let robots rather than humans fight wars; on the other, doctors and lawyers may be out of a job. (National Geographic)

Interview with LinkedIn founder touches on A.I. and basic income
“We cannot ignore this problem. Right now, everybody’s punting. We know the share of income that goes to wages is a declining portion, compared with capital expenditures. What does that mean for jobs? Entrepreneurship is part of the answer. Mass-scale entrepreneurship. Before you even get to A.I.” (The New Yorker)

Are We Approaching an Economic Singularity?
Information Technology and the Future of Economic Growth — The idea here is that rapid growth in computation and artificial intelligence will cross some boundary or Singularity, after which economic growth will accelerate sharply as an ever-increasing pace of improvements cascade through the economy. (William D. Nordhaus NBER Working Paper)

The Future of Work: The Three Dimensions of Artificial Intelligence
What worries you most — and/or excites you most — about the future of work and workers? Put another way: What will be the most consequential changes in the world of work and workers, and what anxieties and possibilities will they produce?

“In periods of technology diffusion including the current period, the future of work and workers depends as much on how we deal with the technology as on the technology itself. It is time we corrected AI’s third dimension so we can return to the job of building the future of work.” (Pacific Standard)

Rodney Brooks warns that technologists must consider how advances in robotics and AI will eradicate jobs.
Brooks admitted he was sometimes guilty of focusing on technological innovation rather than its social implications himself. But he added that it was increasingly clear that this needs to be part of the debate. “Technological innovations can have severe impacts on society,” he said. (MIT Technology Review)