Welcome!

News Feed Item

Rise of the Machines: BCG Projects $67 Billion Market for Robots by 2025

Too Few Corporate Leaders Are Thinking About How the Next Generation of Robotics Will Affect Their Workforce, Operations, Business Models, and Competitive Position, Experts Say

BOSTON, MA -- (Marketwired) -- 09/03/14 -- The rise of robotics is gaining traction much faster than most executives realize and will have a major impact on the competitiveness of companies and countries alike, according to new research by The Boston Consulting Group (BCG).

Spending on robots worldwide is expected to more than quadruple from just over $15 billion four years ago to about $67 billion by 2025 -- a 10.4 percent compound annual growth rate since 2010 -- according to BCG's study. The findings appear in a new article, "The Rise of Robotics," published on bcgperspectives.com.

Increasingly flexible, responsive, sensing -- even humanlike -- today's state-of-the-art robots are beginning to replace labor in a wide range of industries. As prices come down and new performance thresholds are crossed, robots are migrating from industrial and military uses to commercial applications and the personal-service realm, BCG says.

"Already used to fight wars, remove dangerous land mines, and fill customer orders, robots can also clean, dance, and play the violin; assist with surgery and rehabilitation; bathe elderly patients; measure and deliver medication; offer companionship; and provide disaster relief, report the news, and drive cars," the authors note.

BCG studied the full spectrum of the global robotics market, which comprises four sectors:

  • The personal segment -- robots used for entertainment, cleaning, education, security, and household applications -- is projected to grow the fastest, at a compound annual rate of 15.8 percent, ballooning from $1 billion in 2010 to $9.0 billion in 2025.

  • The commercial segment -- robots used for medical and surgical purposes, agriculture, and construction, among other applications -- is expected to grow at a compound growth rate of 11.8 percent from $3.2 billion to $17.0 billion, overtaking spending on military applications.

  • The industrial segment -- robots used in applications such as welding, assembly, painting, and material handling -- will continue to be the largest, growing at a compound growth rate of 10.1 percent from $5.8 billion to $24.4 billion.

  • The military segment -- for unmanned aerial, ground, and underwater vehicles, among other applications -- is projected to grow at a compound growth rate of 8.1 percent from 2010 to 2025 and will be second largest, at $16.5 billion.

It's interesting to note that 15 years ago, there was no significant market for personal robots and only a very small one -- $1.1 billion in 2000 -- for commercial applications. (See Exhibit 1.) Increasingly, robotic applications are migrating from industrial and military uses to commercial and personal ones. In June, for example, BP received approval from the U.S. Federal Aviation Administration to use drones to monitor the company's oil operations in Alaska. Honda is investing in robots that will provide assistance to people with mobility problems, such as the elderly and disabled.

Driving this growth is a convergence of falling prices and performance improvements. The cost of high-quality robots and components is dropping rapidly, while CPUs are getting faster and application programming is getting easier. As robots become cheaper, smaller, and more energy efficient, they gain flexibility and finesse, increasing the breadth of potential applications.

Consider, for instance, how robots are enabling food processors to make products untouched by human hands. At Sweden-based Charkman Group, robots slice and pack high volumes of salami, ham, turkey, rolled pork, and other cooked meats. They can handle 150 picks per minute across multiple sizes and types of meat.

"The fact that robotics and automation are crossing price, performance, and adoption thresholds is a clear sign that the robotic megatrend is growing in relevance and a tipping point may be near," said Alison Sander, head of BCG's Center for Sensing & Mining the Future and a coauthor of the article.

Where Demand Is Coming From

Demand for robots is currently highest in South Korea and Japan. Roughly 40 percent of the industrial robots used today are in the automotive sector, in which "robot density" (a metric indicating the number of robots per 10,000 manufacturing workers) already tops 1,000 in five countries -- Japan, France, Germany, the U.S., and Italy. China is the fastest-growing market for imported industrial robots, according to the article.

"Countries with a greater number of robotic programmers and robotic infrastructure could become more attractive to manufacturers than countries with cheap labor," said Mel Wolfgang, a senior partner in BCG's Industrial Goods practice and a coauthor of the study. "This rise and expanding reach of robots will fundamentally alter the competitive dynamics of the global economy."

Despite the potentially far-reaching implications of this trend, the authors argue that few companies have thought about how the next generation of robotics will affect their workforce, operations, business models, and competitive position. And even fewer have considered which approach to embracing robotics will deliver the most sustainable advantage.

The article includes a number of examples of companies that are leveraging robotics to build competitive advantage, including Philips, Rio Tinto, and Amazon.com. It also charts M&A activity showing new players entering the robotic field. Google, for example, has bought more than eight robotic-related companies in the last year, prompting speculation about the role robotics will play in its future, as Google already is a leader in self-driving cars.

Profiting from the Megatrend

To help companies prepare for and profit from the megatrend, the authors offer advice on how to identify areas for leveraging robotics. They also review four key strategic considerations.

"The megatrend toward mobile, autonomous, multipurpose, and bespoke robotics is gaining traction much more quickly than most corporate executives realize," the authors conclude. "Perhaps the greatest promise lies with the power of robotics to transform a company's value proposition -- and fundamentally change the competitive dynamics of any industry."

A copy of the article can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About BCG's Center for Sensing & Mining the Future

The Center for Sensing & Mining the Future develops BCG's global-trend database and provides guidance to companies working to better understand trends that will shape their future. The center tracks more than 90 megatrends that cut across the latest technologies, demographic shifts, and economic developments. More than 600 clients across all industries and regions have benefited from the center's insights.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About bcgperspectives.com

Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2667754

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Extreme Computing is the ability to leverage highly performant infrastructure and software to accelerate Big Data, machine learning, HPC, and Enterprise applications. High IOPS Storage, low-latency networks, in-memory databases, GPUs and other parallel accelerators are being used to achieve faster results and help businesses make better decisions. In his session at 18th Cloud Expo, Michael O'Neill, Strategic Business Development at NVIDIA, focused on some of the unique ways extreme computing is...
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
The best-practices for building IoT applications with Go Code that attendees can use to build their own IoT applications. In his session at @ThingsExpo, Indraneel Mitra, Senior Solutions Architect & Technology Evangelist at Cognizant, provided valuable information and resources for both novice and experienced developers on how to get started with IoT and Golang in a day. He also provided information on how to use Intel Arduino Kit, Go Robotics API and AWS IoT stack to build an application tha...
IoT generates lots of temporal data. But how do you unlock its value? You need to discover patterns that are repeatable in vast quantities of data, understand their meaning, and implement scalable monitoring across multiple data streams in order to monetize the discoveries and insights. Motif discovery and deep learning platforms are emerging to visualize sensor data, to search for patterns and to build application that can monitor real time streams efficiently. In his session at @ThingsExpo, ...
Ovum, a leading technology analyst firm, has published an in-depth report, Ovum Decision Matrix: Selecting a DevOps Release Management Solution, 2016–17. The report focuses on the automation aspects of DevOps, Release Management and compares solutions from the leading vendors.
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it ...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...