Re-shoring – MSNBC Reports, “Surging China costs forces some U.S. manufacturing companies back home”

June 29, 2011

Examples of re-shoring are growing in the popular press and getting debated more and more in social media. MSNBC recently examined the case of Master Lock returning to Milwaukee, Wisconsin, after losing the low-wage advantages offered by offshoring to China.

Per usual, the main issue is cheap labor. However, reader comments on this article quickly broach concerns about effects of offshoring on national security. Before you know it comments turn to war and conflict. But most of the concern is about the negative pressure of low-wage countries on the U.S. standard of living.

There will always be another country to fill the void when China loses its advantage in labor cost. Robots and automation can balance the playing field and bring jobs back to the U.S. (CBS Report Finds Job Opportunities at Dow Linked to Robotics.)

Without manufacturing, we will lose our competitive strengths and President Obama has responded by committing $500 million to for an Advanced Manufacturing Partnership featuring $70 million for a National Robotics Initiative.

Some people will be spooked by the idea of robots, but China uses them, too. We are talking about a machine that uses the latest technology (such as machine vision) to improve quality and productivity. Robots don’t solve or cause social issues . . . we’d still be having this conversation even if robots did not exist because it all comes back to cheap labor.

Low wage countries treat their workers pretty much like robots (to put it kindly), but in America, we fought for a higher standard of living and better treatment of workers. President Obama is right in his belief we have to “out-innovate, out-educate and out-build” our rivals. And we need technology to do that (as well as a generation of workers with the knowledge and skill set to use it).

Nothing is easy in matters of national self-interest. Don’t get distracted by romantic notions of robots. See them for what they are – advanced automation. Those who embrace robotics will have a future selling, maintaining, operating and building them. There is nothing magical or mythic about them, although many people feel that way. (See “Robots Then and Now – From Magic to Legend and Beyond.”)

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Economic Conditions and Opportunities Bode Well for Robotics Market

June 10, 2011

By Brian Huse, Director, Marketing & PR, Robotic Industries Association

What is the outlook for robots and automation now that we are almost half-way through the calendar year? Excellent, if you ask Paul Kellett, Director – Market Analysis for Automated Technologies Council. He’ll also tell you why the situation looks so good for robotics; how the world economy works and more. He makes no guarantees, but conditions look especially good for the robotics market this year.

A glance at the big picture for robotics reveals the world market has returned to growth after steep declines in 2009. Worldwide robot sales are not quite back to levels seen in the heydays of 2008, but according to the International Federation of Robotics the gap is closing and they predict around a 10% growth rate in 2011 (but they expect a more modest 5% growth rate over the next three years combined).

According to RIA’s most recent statistics, more than 4,000 robots were ordered in North America for a 31% increase in units and 27% increase in dollars through the first quarter of 2011. Unit growth jumped 64% in the automotive sector where pent-up demand was years in the making.

“Manufacturing is leading the recovery, and that sort of creates schizophrenia in a market that usually leads with consumer demand,” says Kellett. “Now we have the ‘opposite’ where the smaller part of the equation (the business sector) is driving most of the growth. Until consumer demand returns to ‘normal’ levels the recovery won’t be typical.”

In the U.S., consumer spending accounts for nearly two-thirds of GDP with the remainder consisting of business expenditures. With much of the turmoil behind us, a stronger recovery led by consumer spending would have normally occurred by now, explains Kellett. Of the two main components of GDP, manufacturing is the smaller one and even at full throttle it cannot contribute as much to overall economic growth as the consumer sector.

Kellett adds another observation: “Consumers have reduced their spending behavior. They are making fewer purchases because of low confidence about the economy as a consequence of high unemployment, job uncertainty and historically low home values.  People are spending less and saving more instead of charging up a storm on their credit cards, which had the economy roaring in 2008.”

By contrast, the business sector, and in particular manufacturing, has increased spending.  Flush with cash on their balance sheets, larger manufacturers have been spending money on capital equipment, especially the kind that increases productivity and quality. Since productivity and product value enhancements require automation technology, robotics companies have been major beneficiaries.  A resurgent automobile industry has especially been a boon to these companies.

Risk still casts long shadows on the economy as Kellett will tell you. Rising costs for oil and commodities is a concern; however, at this point not enough to forestall the current recovery. Uncertainty in the Middle East is a major part of the problem, but he says as long as a barrel of oil stays in the low $100’s the market should be able to cope.  A depressed housing market might also eventually take its toll within the U.S.

Economies are recovering at different rates, notes Kellett, and some have large obstacles to overcome.

“Japan just fell back into recession,” says Kellett. “Because of the terrible earthquake, tsunami, and nuclear reactor crisis, Japan is experiencing its most challenging period since World War II.”  Adding to Japan’s economic woes has been deflation, which occurs when consumers stay on the sidelines and defer spending in hopes of more price drops. That unavoidably depresses corporate income.”

Despite the seriousness of the Japanese crisis, world markets should be able to withstand the resultant supply side disruptions from Japan thinks Kellett. He also is optimistic that the sovereign debt problem in Japan, the U.S., Portugal, Ireland, Italy, Greece and Spain can be overcome, saving financial markets from chaos. In the meantime, sovereign debt will play havoc with currency exchange rates, which will aid the exports of some countries, like the U.S. at present, while making the exports of other countries less competitive in the world market.

Regardless of economic headwinds around the world, manufacturing and production are on the upswing in all major economies. Business sectors are healthy with high business confidence and levels of investment. Businesses today are investing more in productivity enhancements such as automation equipment like robotics.  “Current economic conditions are generally very favorable to robot sales,” says Kellett. “In addition, the value propositions of robotics (increased productivity, efficiency, product quality and safety) make robotics indispensible, and in the long term ensure an upward trend for robotics despite the vagaries of the business cycle.”

An important driver of this long-term trend is also an abundance of new market opportunities. What are some of the more remarkable opportunities for robotics and machine vision now? Kellett says growing demand for solar cells increases the need for robots and automation. Another emerging opportunity in the energy sector is the manufacture of fuel cells which need robots to achieve affordable, high-volume production.

Continued growth in the wind turbine industry offers good market opportunities for robotics in areas of core competence for this technology such as welding and material handling. A push for electric vehicles means advanced battery manufacturers need to reduce production costs and ensure product quality for their complicated and delicate manufacturing processes. Once again – robots are the automation of choice.

New market opportunities are not just technology-based but also geographic in nature.  China, for example, has enthusiastically embraced automation in response to labor pressures and the need for improved product quality. “Demand for robots is certain to grow in China,” says Kellett.

North America is another region where huge demand will continue to drive robot sales, especially as the automotive sector rebounds. Although demand for robots is very good in certain North American segments such as life sciences / pharmaceutical / biomedical (where demand is up 61% according to RIA statistics) a good half the market remains in automotive.

Will the robotics industry continue to gain back ground? Yes, according to Paul Kellett. “In North America and other important regions robot sales should benefit from resurgent manufacturing sectors.”

As the economy finds its way toward better days RIA will continue to offer in-depth analysis of the markets. Join RIA in this dynamic time of market recovery to stay at the forefront of market opportunities.

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International Conference for Vision Guided Robotics Now Accepting Abstracts and Corporate Sponsors!

June 1, 2011

International Conference for Vision Guided RoboticsThe International Conference for Vision Guided Robotics (ICVGR) comes to suburban Detroit, Michigan this fall. This educational conference will focus on new technologies in vision guided robots and new applications backed by proven robotic and vision solutions used today. Place your company in front of the highly motivated attendees at ICVGR. Submit an abstract today.

Tabletop space is available on a first-come, first-served basis. Tabletop exhibits are Wednesday, October 26, 2011. Tabletops include one six-foot table, one chair and a 110V electrical outlet. Tabletop fees are $750 for AIA or RIA Members, $950 for non-members. Corporate sponsorships are also available.

Act soon to be included in  promotional activities to hundreds of thousands of targeted buyers.