Industrial robots are getting cheaper and more attractive for manucaturers than human workers

Manufacturers to replace people with robots study predicts

As robotic systems are getting cheaper and the price of human labour keeps rising, more manufacturers will look at replacing humans with machines, Boston Consulting Group predicts.

In a study published today, the firm estimates that once the cost of owning and operating a robotic system comes at a 15 per cent discount to employing humans, companies will increasingly opt to use machines.

As a result, the firm said, companies will be employing less people but those will have to be more educated and better paid, as they will be responsible for running the machines.

Robots now perform roughly 10 per cent of manufacturing tasks that can be done by machines, the study estimates. This number is going to increase to about 25 per cent in the next ten years, the Boston Consulting Group predicts.

The development will result in an overall drop of labour costs by 16 per cent.

For example, the US automotive industry, which is predicted to be one of the early adopters of the technology, will save $17 per hour of work as a spot-welding machine would cost only $8 an hour top operate compared to $25 an hour for a worker.

The price of robots capable of performing repetitive robots has decreased by 90 per cent over the past ten years, the firm said, and is expected to fall by further 22 per cent by 2025.

Three-fourths of robot installations over the next decade are expected to be concentrated in four areas: transportation equipment, including the automotive sector; computer and electronic products; electrical equipment and machinery.

Adoption is forecast to be slower in industries in which tasks are more difficult to automate or labour costs are low, such as food products or fabricated metal.

Certain countries also are expected to be more brisk adopters. China, the United States, Japan, Germany and South Korea now account for about 80 per cent of robot purchases and are expected to maintain that share over the next decade.

Labor costs have climbed in countries such as China that have been popular for outsourcing production, while technological advances for robots allow them to be more flexible and perform more tasks, said Jim Lawton, chief marketing officer at robotics company Rethink Robotics.

"People have come to believe this is going to be an important part of how manufacturing gets done," he said.

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