Tracking the next megatrend
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This document provides an overview of the robotics and automation industry and trends. Some key points: - Computing and robotics are advancing rapidly, with robots gaining abilities like seeing, moving, and interacting naturally. This will unlock many new applications and empower people. - The robotics industry is growing quickly, with an estimated $1.2 trillion in spending by 2025. China's robotics growth rate was 54% last year alone. - Robots are being used increasingly in industries like manufacturing, healthcare, agriculture, and more. Examples of applications include drones, surgical robots, automated milking, and driverless tractors. - Technology costs are decreasing, while wages are increasing in places like
Tracking the next megatrend
- 1. Tracking the next Megatrend May 2015 Richard Lightbound richard@robostox.com
- 2. Topics for discussion 1. What is Robotics & Automation? 2. Industry Trends – Why Now? 3. ROBO-STOX Index & Methodology Bill Gates April 2014 – Anniversary Letter “Today though, I am thinking much more about Microsoft's future than its past. I believe computing will evolve faster in the next 10 years than it ever has before. We already live in a multi-platform world, and computing will become even more pervasive. We are nearing the point where computers and robots will be able to see, move, and interact naturally, unlocking many new applications and empowering people even more.” 1
- 3. Industry in numbers $1.2 TRILLION 7,000 Businesses will have drone permits within the next three years In robotics-related spending by 2025 54 % Growth rate in China last year alone Per hour to power an industrial robot compared to $20 per employee 75 CENTS 2
- 4. What is Robotics and Automation?
- 5. Focus on Technology & Applications INDUSTRIAL MFG MATERIALS HANDLING HEALTHCARE MILITARY /SECURITY AGRICULTURE ENERGY 3D PRINTING CONSUMER PRODUCTS PRE-PROGRAMMED, REDUNDANT TASKS SENSING, PROCESSING AND ACTING 4
- 6. Robotic Applications Unmanned Aerial Vehicles (Drones): More than 100,000 jobs will be created upon legalized integration • Military • Surveillance • Farming • Search and rescue • Mapping and surveying • Fire fighting • Pollution control Parrot – Assorted range of drones for sales to the consumer market AeroVironment – received first FAA drone license for commercial use Northrop Grumman– delivers unmanned aircraft for defense, homeland security and commercial aviation DJI – Leaders in quadcopters. Developing products for use in filmmaking, conservation and energy infrastructure DEVELOPMENTS COMPANIES TO WATCH 5
- 7. Robotic Applications HEALTHCARE $4 trillion annually in the US alone • Surgical robots • Pharmacy automation • Exoskeletons • Assisted recovery and rehab • Personalized care • Non-invasive diagnosis Intuitive Surgical – DaVinci robotic device is used for minimally invasive operations. Fewer and smaller incisions allow quicker recovery. Accuray Inc. – robotic system for tumor treatment via radiation therapy – extraordinary precision Cyberdyne – Hybrid Assistive Limb suit (HAL) Aethon Inc. – automates internal logistics by delivering supplies and materials via TUG, smart autonomous mobile robot DEVELOPMENTS COMPANIES TO WATCH 6
- 8. Robotic Applications AGRICULTURE: The global agricultural robotics market was worth $817 million in 2013 and is expected to reach $16.3 billion by 2020. • Drones or UAVs; data gathering • Automated milking systems • Agribotics; driverless tractors and robotic harvesting equipment COMPANIES TO WATCH John Deere – worldwide leader in agriculture machinery. Developed unmanned tractors capable of spraying, mowing and harvesting Trimble Navigation – develops farm navigation equipment and crop management systems DEVELOPMENTS 7
- 10. 2014 – Sales go through the roof
- 11. Industrial Robots penetrate many industries Automotives industry still dominates the automation space IFR industrial robots shipped by industry Automotives Plastic and chemical Metal F&B Electrical & electronics Others Units 0 25000 50000 75000 100000 125000 150000 175000 200000 2008 2009 2010 2011 2012 2013 Gavekal Data/Macrobond Industrial Robots have been around for years and automation is not a new concept. Most manufacturing in the last century has been “fixed automation” around the dull, dirty and dangerous tasks. Due to technological limitations, cost and the effort required to structure the environment to suit the tool, traditional industrial robots have penetrated only an estimated 10% of the manufacturing domain. 10
- 12. Robotics is a Global trend • Robots are going global unlike the cheap labour outsourcing era which was pioneered by China and other EMs. • In the developed world USA is doing the best job embracing the robots revolution. • Surprisingly Japan is the worst. 11
- 13. Robot density – look at China 12
- 14. Technology costs are decreasing Faster price declines will drive higher robots adoption Global robotics shipment (rhs) Avg. unit value (lhs) New price goal? (lhs) USD 0 10000 20000 30000 40000 50000 60000 70000 80000 0 25000 50000 75000 100000 125000 150000 175000 200000 2000 2002 2004 2006 2008 2010 2012 2014 Gavekal Data/Macrobond An increasing number of companies are finding robotics a cost-effective solution to their production and service needs. Robots are becoming cheaper, more productive, and more sophisticed while the cost of human labour continues to rise. 13
- 15. Convergence of Robot costs and wages China wages increased 500% since 2000 and are expected to continue at 18% per annum. Robotics and automation can boost the productivity of human labour, reducing unit output costs through scale production as well as cost- effective highly precise and sophisticated production.
- 16. A labour substitute is mandatory The world is aging causing the traditional working age population to shrink. That process has already started in Japan and EU China could see its working age population contract as early as 2020. Even India is expected to experience this trend by 2045. These 5 regions produce approximately 70% of the world’s output.
- 17. Automation Tour - Nov’14 Japan & China • 35 interviews with a broad sample of companies: – 3 largest robot makers: Fanuc, ABB & Yaskawa • CN - Siasun Robot & Automation, GSK, Estun Automation and Effort Intelligent Equipment • TW - Hiwin and Delta – Machinery Builders: Fuji Machine, Toshiba Machine, JTEKT, Mitsubishi – Industrial Automation: Rockwell – Component suppliers to robot makers: • Servo Motor: Yaskawa and Delta Electronics • Industrial Lasers: Rofin-Sinar – Major suppliers to automotive sector: Fauerica and CSSC – System integrators – Feel from the research perspective: • Professor Sugano – human robotic interaction • Professor Ishikawa – active control and high speed imaging 16
- 18. Automation Tour - Insights Key Market Findings and Technology Trends: 1. Automotive and Smartphone capex strong for 2015 and beyond 2. Internet of Things - Software costs coming down due to common standards, open source coding, machine learning and self teaching 3. Ultra high speed vision – Focus on location & navigation technology driving advances in machine vision and less expensive: sensors, gyros, accelerometers etc…plus the algorithms that fuse it all together getting better and cheaper 4. New industry applications – not just automotive and electronics 5. China – Buyer and Maker of Robots1,000 Robot Companies • “US$154 billion rise of the robots planned for Pearl River Delta manufacturing” – SCMP April 7th 2015 6. Big players going “COBOT” 17
- 19. COBOTS - inexpensive table-top robots will disrupt light manufacturing BAXTER SAWYER YUMI UR3 LBR iiwa 18
- 20. What does ROBO-STOX do…?
- 21. Part 1 – Industry Analyst Team Professor Henrik Christensen - Dept. Chair of Robotics at GA Tech University Professor Raffaello D’Andrea – ETH Zurich, Dynamic Systems & Control. Co- founder of Kiva Systems Professor Wyatt Newman - Humanoid Robotics & AI RESEARCH Mr. Morten Paulsen - CLSA, Head of Research for Robotics and Machinery Industry Mr. Louis Gave - Gavekal, CEO Money Management and Global Research Mr. Scott Davis - Barclays Capital, Head of Global Industrials Equity Research ACADEMICS 20
- 22. Part 2 – Global Database w/3,000+ companies 21
- 23. Part 3 – ROBO-STOX Industry Classification 22
- 24. Part 4 – ROBO-STOX UCITS Compliant Index • This index is global, deliberately broad across the industry and built for the long term which reflects the early stages of the robotics and automation industry • Including all players in a proportionate and equally weighted fashion ensures that we capture the overall growth trend while minimizing company-specific risk. 23
- 25. Equal weighing approach across two tiers Bellwether Non-Bellwether Index made up of “bellwether” stocks (40%) and “non-bellwether” stocks (60%) Bellwether companies are well established leading companies, whose core business is directly related to robotics and automation. Non-bellwether companies have a distinct portion of their business and revenue in robotics and automation and have the potential to grow through innovation and/or market adoption of their products and/or services. This approach ensure the index provides exposure to companies in the early stages of new innovation and technologies as well as the more established players. The 40/60 weighting results in each bellwether having roughly twice the weight of each non- bellwether The index then weights each of its constituents on an equally weighted basis, avoiding the large capitalisation and “buy high, sell low” biases of market capitalisation indices
- 26. Index Components – bellwether companies
- 27. Geography and market capitalization
- 28. Part 5 – ETF Securities 27
- 29. Thank You
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