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UK: A reluctance to invest in robots?

23 March, 2018

The latest figures for the global adoption of industrial robots show that, while most countries are increasing their use of these machines, the UK has stalled, falling below the global average for the first time. It is the only G7 nation in this position. Contributing editor Tony Sacks examines the numbers.

Every year the International Federation of Robotics (IFR) releases statistics that show how quickly different countries are installing industrial and service robots. The figures are probably the most accurate available for the uptake of robots around the world, because most of the major robot-makers are members of IFR.

The latest figures, just released by the IFR, are for 2016. They measure the penetration of industrial robots in terms of the number of robots installed for every 10,000 people working a country’s manufacturing sector.

“Robot density is an excellent standard for comparison in order to take into account the differences in the automation degree of the manufacturing industry in various countries,” explains IFR president, Junji Tsuda.

Using this yardstick, the global average is 74 robots installed for every 10,000 manufacturing workers (up from 66 in 2015). The figures for different countries vary widely, with South Korea having by far the highest penetration, with 631 robots per 10,000 workers – eight times more than the global average. This phenomenal figure is the result of large numbers of industrial robots continuing to be installed, especially in Korea’s automotive and electrical/electronics industries.

The other members of the global top ten of robot adopters are Singapore (with 488 industrial robots per 10,000 manufacturing workers), Germany (on 309), Japan (303), Sweden (223), Denmark (211), the USA (189), Italy (185), Belgium (184) and Taiwan (177).

You have to go to the 22nd position to find the UK, with just 71 industrial robots per 10,000 workers. This puts it below the global average – the only G7 country in this position, and below countries such as Slovenia (on 137), Slovakia (135) and the Czech Republic (101).

What’s more, while the penetration of industrial robots is increasing in most countries, in the UK there was no change in uptake between 2015 and 2016. So, because the global average robot population density increased from 66 robots per 10,000 in 2015 to 74 in 2016, the UK dropped below the global average for the first time.

It is impossible to tell whether Brexit had an effect on manufacturers’ reluctance to invest in robotics (and other automation technologies) during 2016, with the referendum coming half-way through the year. But a recent analysis by the Bank of England found that UK businesses invested up to £7.7bn less on factories and equipment in the year following the referendum. A BoE survey of 1,200 companies found that corporate investment was about 3–4% lower in the 12 months to June 2017 than it would otherwise have been.

Commenting on the UK’s reluctance to invest in robots, the IFR says that UK industry is “highly in need of necessary investment in order to modernise and increase productivity. The low robot density rate is indicative of this fact.”

Europe still leads the regional league of robot adopters with 99 industrial robots per 10,000 human workers, compared to 84 in the Americas, and 63 in Asia.

In 2016, more than a third of Europe’s robots (36%) were supplied by the continent’s most automated country, Germany, which also had 41% of all of Europe’s operational industrial robots. The IFR predicts that between 2018 and 2020, the annual supply of robots in Germany will continue to grow by at least 5% a year, due to the increasing demand for these machines by both the automotive sector and industry in general.

Germany’s penetration of 309 industrial robots per 10,000 manufacturing workers is more than twice as many as in France, which has 132, placing it 18th in the world rankings, well behind other European nations including Sweden, Denmark, Italy and Spain.

But the IFR detects changes afoot under the Macron presidency. “France is in the process of regaining competitiveness in its manufacturing sectors,” it says. “This may, to a certain extent, promote installations of new robots in the next few years.” The IFR estimates that the number of robot installations in France grew by about 10% last year, and it predicts an average annual growth rate of 5–10% between 2018 and 2020.

Eastern European countries have been keen adopters of industrial robots, driven largely by the automotive plants in the region. Slovenia and Slovakia (ranked 16th and 17th in global terms), both have higher robot densities than Switzerland. The Czech Republic ranks 20th on the global scale.

But it is in Asia that industrial robots are finding their fastest-growing markets. “Between 2010 and 2016, the average annual growth rate of robot density in Asia was 9%, compared to 7% in the Americas and 5% in Europe,” IFR president, Junji Tsuda, reports.

Perhaps not surprisingly China is the world’s most dynamic market for industrial robots. Due to the significant growth of installations, particularly between 2013 and 2016, its penetration density rose from 25 robots per 10,000 in 2013, to 68 in 2016. That year, China’s robot density ranked 23rd worldwide and it has probably overtaken the UK since then.

The Chinese government wants the country to be one of the world’s top 10 most intensively automated nations by 2020. By then, its robot density is expected to rise to at least 150 per 10,000. China is also aiming to sell 100,000 domestically produced industrial robots a year by 2020. This would be almost four times more than in 2016, when foreign robot suppliers sold around 60,000 robots – more than twice as many as domestic manufacturers.

Singapore has the world’s second highest robot penetration, with 488 robots per 10,000 manufacturing employees. Unusually, the automotive sector is not the driving force here – about 90% of Singapore’s robots are installed in the electronics industry.

Japan, once the global frontrunner in robot adoption, is now in fourth place with 303 robots per 10,000 employees. But Japan is still the world´s leading manufacturer of industrial robots, with an output of 153,000 machines in 2016 – the highest level ever recorded. This represents more than half (52%) of the total global supply.

During 2016, the penetration of industrial robots in the US manufacturing sector increased “significantly” to 189 per 10,000 (from 175 in 2015), putting it in seventh position globally. Since 2010, there has been a concerted effort to automate production in the US to make its industries globally competitive, and to keep manufacturing at home – and, in some cases, to bring back manufacturing that had previously been sent overseas.

The automotive industry is still the main customer for industrial robots in the US, accounting for about 52% of total sales in 2016. The IFR predicts that robot sales will continue to expand by an average of at least 15% per year between 2017 and 2020. Whether this will help President Trump to achieve his aim of bringing jobs back to US manufacturing, remains to be seen.

Interestingly, one of Trump’s bete noirs, Mexico, has been relatively slow to adopt industrial robots, despite being a key production hub for car manufacturers and automotive parts suppliers that export to the US and, increasingly, to South America. The country’s automotive industry in by far its biggest user of industrial robots, accounting for 81% of sales in 2016. But despite this, Mexico’s robot density is just 33 per 10,000 human workers, placing it 31st on the global scale.

As part of its Industrial Strategy, the UK Government has committed itself to invest £94m in robotics and artificial intelligence over a four-year period. Whether this will enhance the nation’s standing in the global league of robot users remains to be seen.

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