What a Burger-Flipping Robot Tells Us About the Future of Work

Matthew Carr
by Matthew Carr, Emerging Trends Strategist, The Oxford Club
job automation factory workers

Technology marches on.

U.S. manufacturing output continues to hit record highs. Yet the total number of manufacturing jobs in the U.S. has declined by 30% in the past couple of decades.

People are being replaced by machines. And it’s going to only pick up speed.

In North America last year, businesses ordered 35,000 robots. That was a 10% increase over 2015.

Of those robots purchased, the automotive sector accounted for 20,000. Not that long ago, 80% of the work that went into manufacturing a car was done by humans. Today, 80% of that work is done by robots.

What we’ve seen over the last couple of years is a swift uptake in job automation. We hit a tipping point, and the speed will only increase.

I’ve written here before that Amazon’s (Nasdaq: AMZN) robot workforce increased 50% last year to 45,000. This is saving Amazon tens of millions of dollars per warehouse.

In 2015, the money spent globally on robots was $71 billion. By 2019, spending is expected to total $135.4 billion. And we’ll see a compound annual growth rate of 17%.

In 2015, sales of robots jumped 15%. This was the biggest increase recorded in a single year.

According to the International Federation of Robotics and the Swiss robotics company ABB (NYSE: ABB), the global population of working robots today is 1.2 million. It’s projected to increase to 2.6 million by 2019.

Over the next decade, the population of industrial robots is projected to increase 300% in the U.S. And worldwide shipments of industrial robots will triple by 2025.

It’s easy to see why. Back in 2010, an industrial robot cost an average of $150,000.

By 2015, the average cost declined by 83% to $25,000.

At the same time, there’s been a push for higher minimum wages for human workers, as well as demand from companies to increase efficiencies, productivity and reduce costs to remain competitive.

Job Automation Hits the Burger Joint

Today, it’s not just manufacturing jobs that are set to be replaced by automation and robots.

For example, there are multiple “burger bots” on the market.

Once again, demand, the need for better efficiencies and productivity, and the opportunity to reduce costs are the big drivers.

Last year, the top burger chains in the world notched $75.5 billion in sales.

At the same time, restaurant worker turnover hit an all-time high of 113%.

Momentum Machines’ “burger bot” can produce 400 burgers per hour. It’s fully autonomous. It slices toppings, grills patties, and can assemble and bag a finished burger.

It could potentially replace two to three full-time line cooks. The savings to a restaurant is estimated to be $90,000 per year in training, salaries and overhead costs.

In May, Momentum Machines secured $18 million in financing.

On the other side of the table is Miso Robotics’ “Flippy” burger bot.

Flippy is what’s called a collaborative robot - or a “cobot.” It’s designed to work with people. The robot is driven by an AI system, so it can constantly learn and adapt. And its job is simply to be a line cook. It cooks burgers and plates them on a bun, but it leaves the finishing touches for humans.

Acacia Research Corp. (Nasdaq: ACTG) has invested in Miso Robotics twice, most recently during the company’s last round of funding. And it has entered into an IP services agreement with Miso.

Flippy will begin rolling out to 50 CaliBurger locations starting in 2018.

Now, cobots, like Flippy and ABB’s YuMi, are potentially one of the biggest automation-related markets. Right now, cobots account for 5% of the global robot population.

But that market is expected to grow from $100 million to $3 billion by 2020. And an MIT study recently found that human-robot teams were 85% more productive than either alone.

According to McKinsey Global Institute, 90% of jobs can’t be fully automated. That means that humans and robots will increasingly need to work together. And ironically, ABB is having to hire three people per day to meet the rising demand for its robots.

We’re in a “golden age” for robots, as their numbers are going to increase rapidly over the next several years. Investors need to understand that we’ve hit a tipping point, and companies that manufacture robots - and those that embrace robots - will prosper.

Good investing,

Matthew

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