The Robot Installation Tipping Point: At 15 Percent Cheaper Than Employing a Human

Worried about being replaced by a robot? You can put a number on when that will happen.

Recent studies indicate that when the cost of owning and operating a robot is 15 percent cheaper than employing a human, it's gonna be machine time.

Robots currently perform 10 percent of industrial tasks that can be automated. That number is expected to double and possibly triple within ten years.

Service jobs, too, are vulnerable to competition from inexpensive robotic alternatives.

The magic number - the 15 percent solution - comes from a financial calculation based on operating costs, depreciation, tax effects and any other factor that might influence the comparative value calculation. It may well be that these analyses fail to take into account intangible drivers of performance in addition to relevant economic metrics. But the pattern is clear. Coffee or lubricating oil, anyone? JL

Mark Prigg reports in Reuters:

Companies start thinking about replacing workers when the costs of owning and operating a system come at a 15 percent discount to employing a human

The falling cost of industrial robots will allow manufacturers to use them to replace more factory workers over the next decade while lowering labor costs, according to new research.

Robots now perform roughly 10 percent of manufacturing tasks that can be done by machines, according to the Boston Consulting Group. 

The management consulting firm projected that to rise to about 25 percent of such 'automatable' tasks by 2025.

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THE ROBOT ADVANTAGE

The research found a tipping point for installing robots: Companies tend to start thinking about replacing workers when the costs of owning and operating a system come at a 15 percent discount to employing a human counterpart.

In the U.S. automotive industry, a spot-welding machine costs $8 an hour versus $25 an hour for a worker.

The report says the changes will be concentrated in four areas: transportation equipment, including the automotive sector; computer and electronic products; electrical equipment and machinery. 

In turn, labor costs stand to drop by 16 percent on average globally over that time, according to the research.

The shift will mean an increasing demand for skilled workers who can operate the machines, said Hal Sirkin, a senior partner at Boston Consulting.

Factory workers 'will be higher paid but there will be fewer of them,' Sirkin said.

The research found a tipping point for installing robots: Companies tend to start thinking about replacing workers when the costs of owning and operating a system come at a 15 percent discount to employing a human counterpart.

For example, in the U.S. automotive industry, which is predicted to be one of the more aggressive adopters of robots, a spot-welding machine costs $8 an hour versus $25 an hour for a worker.

A robot that can perform certain repetitive tasks costs about one-tenth as much as it did more than 10 years ago, Sirkin said. 

Costs tied to one commonly used robotics system, a spot welder, are expected to fall 22 percent between now and 2025.

 According to Dr Maggie Aderin-Pocock, a research fellow in UCL Department of Science and Technology Studies, care for the elderly and even children are among the jobs to be replaced by artificially intelligent beings within the next 50 years.

Her research suggests human workers across a plethora of service sectors and caring professions could be replaced by droids within our lifetimes.

She believes that as the rapid advances in technology achieved this century are projected to continue at an astonishing rate, this will allow robots to break free of science fiction and establish themselves in our everyday life.

According to her research - which polled 2,000 people about which jobs they thought were most unpopular and could be among the first to be given to robots for the TC channel Syfy - traffic wardens (65 per cent), estate agents (40 per cent) and car salesman (33 per cent) could soon be lost to history.

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.

By 2025, robots should be able to handle 30 to 40 percent of automatable tasks in these industries.

Adoption will be slower in industries such as food products, plastics, fabricated metal, and wood products, where many tasks will remain difficult to automate and wages are relatively low. 

Thanks to technological advances, however, robots are making greater inroads in these industries as well.

'Regardless of whether it's time to invest in next-generation robots, manufacturers everywhere should start preparing,' added Sirkin. 

'They need to understand how costs and automation technologies are changing in their industries and what their competitors are up to. 

SHOULD WE FEAR ARTIFICIAL INTELLIGENCE? ELON MUSK AND STEPHEN HAWKING WARNS OF POTENTIAL DANGERS 

Artificial Intelligence has been described as a threat that could be 'more dangerous than nukes'.

Now a group of scientists and entrepreneurs, including Elon Musk and Stephen Hawking, have signed an open letter promising to ensure AI research benefits humanity.

The letter warns that without safeguards on intelligent machines, mankind could be heading for a dark future. 

The document, drafted by the Future of Life Institute, said scientists should seek to head off risks that could wipe out mankind.

The authors say there is a 'broad consensus' that AI research is making good progress and would have a growing impact on society.

It highlights speech recognition, image analysis, driverless cars, translation and robot motion as having benefited from the research.

'The potential benefits are huge, since everything that civilisation has to offer is a product of human intelligence; we cannot predict what we might achieve when this intelligence is magnified by the tools AI may provide, but the eradication of disease and poverty are not unfathomable,' the authors write.

But it issued a stark warning that research into the rewards of AI had to be matched with an equal effort to avoid the potential damage it could wreak.

For instance, in the short term, it claims AI may put millions of people out of work.

In the long term, it could have the potential to play out like a fictional dystopias in which intelligence greater than humans could begin acting against their programming.

'They also need to start training their workforces for new skills. The coming robotics revolution could significantly reshape the global manufacturing landscape.' 

Certain countries also are expected to be more brisk adopters. China, the United States, Japan, Germany and South Korea now account for about 80 percent 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.