The Robotics Industry:  Leading the Charge to a Productive 21st Century
By Donald A. Vincent, Executive Vice President, Robotic Industries Association

The Beginning:  1950s - 70s
Decades ago, Joe Engelberger, George Devol and other industry pioneers envisioned a day when robots would perform the dangerous and dull jobs that freed people for more creative work.  The vision developed slowly, as robot technology had to be improved, workers had to be convinced that robots weren't a threat to their jobs, and company managers had to be shown that robots could help their companies become more productive and profitable.

In 1974, when our trade association was formed, American companies remained unconvinced about the benefits of robotics.  Despite the fact that the technology was developed in the United States, it was Japan that became the first nation to embrace robotics.  Japanese companies applied robots faster and more efficiently than their American counterparts.  The quality of their products improved along with their productivity.  Japan emerged as a global manufacturing power and the dominant manufacturer of industrial robots.

The Boom:  1980 - 1985
Japan's manufacturing prowess forced American manufacturing companies to react, and robotics was to be the solution.  By the early 1980s, robotics was hailed as the 'next industrial revolution.'  Wall Street analysts helped fuel the hype of a multi-billion dollar U.S. robotics market by 1990. Thousands attended robotics conferences, robotics trade shows attracted so many people that the Fire Marshall had to temporarily close the 1982 show in Detroit, and the personal robot industry was born. Not only were robots expected to solve all of our manufacturing problems, but they would cook our food, clean our homes, and take care of the elderly and disabled. 

In 1985, U.S. based robotics companies posted record new orders of more than 6,200 robots. Companies rushed in to buy robots, often without taking the time to fully understand what would be required to implement them.  And, yes, some robot manufacturers oversold the benefits and the ease of implementing robots, especially when robotics technology still needed further improvements.

The Bust:  1985-1987
The 'boom' of the early 1980s turned to a 'bust' in the mid-80s, with many robotics companies exiting the field as the huge market failed to materialize.  Big corporate names like GE, IBM, Westinghouse, and Bendix shut down robot operations, while dozens of smaller companies either went out of business or merged.  The press, which had been quick to hail the robotics revolution, was just as quick to write the robotics industry's obituary.  In companies across America, robots that had been purchased were taken out of service, or worse, never put in service in the first place.

The robot manufacturers were dependent upon the automotive industry for more than 70 percent of its orders.  When auto companies cut back on capital equipment expenditures, robotics companies felt the pain more than most auto suppliers.  And even though robotics companies weren't being singled out for cutbacks, auto industry manufacturing executives made it clear that they felt robots weren't reliable enough.

As for the personal robot industry, it disappeared.  The products were considered high-priced toys with little useful application. 

The Rebirth:  1987-1992
It was up to the industry survivors to pick up the pieces, to rebuild an industry that had been left for dead.  With robot orders declining from a peak of more than 6,200 in 1985 to just 3,700 in 1987, the future looked gloomy.  Instead of a multi-billion dollar market, the industry would hit just half a billion by 1990.  Few people outside of the industry believed that the situation could be turned around.

From 1987-1992, new robot orders for North American based robotics companies rose about 40 percent, but still failed to surpass 1985 numbers.  During this period, robot manufacturers worked hard to improve the reliability and performance of their products and to lessen their dependence on the automotive industry.  They also began focusing on specific 'niche' markets, rather than trying to provide everything for every possible customer.  In addition to concentrating on applications such as spot welding, painting, and dispensing, the robotics industry developed products that could handle assembly, material handling, and material removal. And, some non-manufacturing applications started to become viable in areas such as security, health care, environmental clean-up, and space & undersea exploration.

The electronics, food & beverage, pharmaceutical, appliance and aerospace industries started receiving more attention from robotics companies who were eager to find new markets.  To better understand these markets, robot manufacturers worked more closely with system integrators.

Advances in robot control technology, simulation and off-line programming made robots easier to program, maintain and use, and allowed users to discover potential problems during the simulation process before the robots were actually installed.

At the same time, global competition in all industries was becoming fiercer than ever.  Consumers were demanding higher quality items at lower cost.  Manufacturers began focusing on technologies that could help them make products 'cheaper, faster, and better.'  It was now or never for the robotics industry.

The Payoff:  1992 - Present
From 1992-1997, North American robotics companies posted gains in new orders of 131 percent.  A total of 12,149 robots valued at over $1.1 billion were ordered in 1997, a new record.  Shipments also topped $1 billion for the first time.  While orders grew just 1 percent in 1997, the industry capped a string of great years, having grown 31 percent in 1992, 29 percent in 1993, 19 percent in 1994, 18 percent in 1995,  and 25 percent in 1996.  In 1998, the industry again topped $1 billion, although orders were down 10 percent over 1997.  Due to the Asian crisis and global financial turmoil, many manufacturing companies either cut back on or postponed their robotics investments.  However, in 1999, the industry marked its best year ever.  Robot orders grew 60 percent, totaling 17,591 robots valued at $1.4 billion, fueled by huge orders for spot welding, material handling, assembly and arc welding robots.  Robot shipments in 1999 also broke all previous records.  A total of 15,063 robots valued at $1.2 billion were shipped, an increase of 39 percent in units and 17 percent in revenue over 1998.

In the '90s, robotics companies that had been forced to trim staff in the late '80s were now hiring again and building expanded facilities.  An industry marked by companies exiting the field now saw new start-ups emerging.  And, the big surge in robot use in the United States made it one of the world's hottest markets for robotics, in stark contrast to the slowdown in robot use occurring in Japan.

Spot welding, long the king of the robot applications, was dethroned by material handling, a clear indication that the robotics industry was becoming less dependent on the automotive industry, since material handling cuts across a wide range of industries.  Companies that had given up on robotics long ago were now taking a second look and discovering that the industry now provided the solutions they needed.  And automotive manufacturing executives, who previously assailed the reliability of robots, now gave testimonials about the outstanding performance record of robot technology.

The Future
Predicting the future growth of the robotics industry can make one look foolish -- just ask the prognosticators who were making forecasts in the early 1980s.  However, after posting records in every category in 1999, I think it's safe to say that the industry is on solid footing heading into the 21st Century.

RIA's study, 'A Market Assessment of Current and Expected Robotics Usage', provides ample evidence of why the industry is well-positioned for growth. Even though the robotics industry is less dependent than ever before on the automotive industry, the automotive market still is the largest.  The auto companies and their suppliers are moving away from hard automation in favor of flexible automation, driven by the need for increased manufacturing efficiency.  Realistic robot simulation is expected to make a large impact by integrating vehicle design and engineering into manufacturing.  Greater use of robots for assembly, paint systems, final trim, and parts transfer is forecast.

Use of robots in the electronics industry should grow at an average rate of 35 percent a year for the next several years.  The key factors driving this expected growth are mass customization of electronic goods, specifically communications equipment; the miniaturization of electronics goods and their internal components, particularly in PCB assembly; and the re-standardization of the semiconductor industry, which will completely retool itself over the next five years.

The food & beverage industry is in the midst of a capital equipment spending boom in order to improve operating efficiencies.  Robot installations are expected to grow by 25-30 percent for the next few years for tasks such as packaging, palletizing, and filling.

These industries are likely to represent the largest markets for the next few years, but we also expect to see growth in the aerospace, appliance, and non-manufacturing markets. 

The Conclusion
After a quarter-century of being actively involved in robotics, I've concluded that the industry is here for the long-haul.  New applications will emerge as advancements are made in robots and peripheral products. Non-manufacturing applications, particularly in medicine, space and undersea, should become increasingly viable.  Some years will see double-digit growth, others will see declines, but the long-term trend is up.  The robotics industry, which survived the 'boom and bust' of the 1980s, prospered in the 1990s, will thrive in the 21st Century!