China to offset an erosion in manufacturing competitiveness by deploying armies of bots
The rise of artificials – AI and robots – is accelerating. One factor is the plummeting price of robots, as reported by James Kynge of the Financial Times:
HSBC, drawing on data from the International Federation of Robotics, forecasts that annual robot sales in China will reach about 100,000 in 2017, up from an actual 56,000 last year and 36,560 in 2013.
A big slice of this potential derives from the fact that although China is already the world’s biggest robot market, in terms of robot density — measured by the number of robots per 10,000 manufacturing workers — the country is still playing catch up. China’s current robot density is about 30, compared with 437 in South Korea and 323 in Japan.
Goldman Sachs, which also forecasts an acceleration in industrial robot sales growth, has calculated that the payback period for industrial robots has shortened to 1.7 years this year from 11.8 years in 2008. Next year, the payback period is set to shorten again to 1.3 years, assuming an average replacement cycle of 10 years.
The prospect of being able to pay off the cost of a robot in slightly more than a year, Goldman Sachs says, has brought industrial automation to within the reach of China’s millions of small and medium-sized manufacturers, creating the conditions for a productivity surge. [emphasis mine.]
Note that growth of the sort projected for China will have a large impact on the workforce. The side effects of all those robots streaming into smaller businesses will be the displacement of the workers currently making shoes, toasters, and iPhones. And where China leads, others will surely follow. Looks like 2017-2018 will be an important inflection point.
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