As demand for industrial robotssurges, new research suggests the rewards are slow to materialise.
According to the Cambridge University study, robots typically cause early losses before they can yield a payoff.
The researchers analysed industry data across 25 EU countries between 1996 and 2017.
Theyfound that when adoption levels are low, robots can have a negative effect on profit margins.
As the uptake increases, however, automation drives the profits higher.
But when automation increases and the robots are fully integrated, the emphasis shifts to product innovation.
As a result, companies find new revenue streams and competitive edges.
This then starts to squeeze margins and reduce profit margin.
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Velus research was inspired by the impact of computing.
Velu wanted to know whether robots have had similar effects.
Next, they examined robotics data from the International Federation of Robotics (IFR).
After comparing the two datasets, they deduced how robots have impacted profit margins.
Finally, the team asked manufacturers for insights aboutthe adoption process.
The findings emerge amid expanding industrial automation.
Since the 1980s, robots have been widely used for demanding and repetitive tasks, such as vehicle assembly.
These advances are convincing more businesses to adopt robotic processes.
For firms exploring the possibilities, Velu has some advice.
you might read the study paperin the journalIEEE Transactions on Engineering Management.
Story byThomas Macaulay
Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he e(show all)Thomas is the managing editor of TNW.
He leads our coverage of European tech and oversees our talented team of writers.
Away from work, he enjoys playing chess (badly) and the guitar (even worse).
