There has been no shortage of news about robots lately. Last month, DARPA announced its semi-finalists for its upcoming “Urban Challenge”—a contest in which autonomous vehicles navigate a course in a city setting—and this month the AP reported that the Pentagon intends to order 3000 more IED-hunting bots over the next five years.
As individually noteworthy as these stories are, what really caught my attention was a recent blog posting by Noah Shachtman of Wired Magazine. In his posting, Shachtman noted that U.S. military robots “ran 30,000 missions in 2006.” He went on to report that 1000 robots will be employed in military settings by the end of the year, and another two thousand more will be added within the next five years.
In one way, the growth from 1000 robots to 3000 robots might not sound that significant. But I would argue that dismissing this upward trend could a mistake of historical proportions. Just consider the case of planes, trains and automobiles.
All Aboard!
I recently returned from vacation and during my 9-day hiatus I had the opportunity to read “An Empire of Wealth: The Epic History of American Economic Power,” by John Steele Gordon. It was a fascinating read, but one passage in particularly stuck in my mind. According to Gordon, in 1830 there were only 23 miles of railroad track in the country. By 1840, that figure had increased to 2,818 miles; by 1850 there were 9,021 miles; and by the Civil War the number of miles had spiked to 30,626.
My point is that it would have been easy to dismiss the significance of the railroad in 1830 when there were only 23 miles. Today, is it not similarly possible to dismiss the significance of the emerging robotics industry when there are only 1000 robots in the field?
In one sense, the jump from 1000 robots to 3000 robots in five years may appear slow and almost linear in nature, but I would argue that the trajectory for robotics is more likely exponential and that in ten years there could be 10,000 or maybe even 20,000 robots patrolling the battlefield. The reason for my optimism stems from the Army’s recent decision to begin deploying gun-toting robots in combat and the Defense Departments ambitious plans to have one-third of the U.S. fighting force consist of robots by 2015.
The opportunity for investors is to determine which companies might be supplying these robots. Today, Foster-Miller, iRobot, Boston Dynamics and even such powerhouses as Microsoft are among the more notable companies involved in the field.
The Lesson of Cars
Like John Candy’s travel modes in the hit movie, Planes, Trains and Automobiles, locomotion is just part of the story. In 1900, a mere 4000 automobiles were manufactured in America by scores of different companies. More surprising, just three years later, fifty-seven new automobile companies came into existence. Equally significant, however, twenty-seven went bankrupt that same year.
And therein lies the second historical lesson. Today, there are no shortage of promising robotics companies—Exponent, Boston Dynamics, Evolution Robotics and Hanson Robotics to name but a few. Some will undoubtedly go on to become formidable forces in the robotics industry, still others will carve out successful niches; but many others will go the way of those early automobile pioneers.
It is an unfortunate fact of life that not all companies are created equal. Management, money, and technological prowess are just some of the factors that will separate the winners from the losers, and the robotics industry can expect to go through a shakeout similar to that which the early automotive industry experienced.
Yet another lesson from the annals of automobile history is that the price of its product does not remain static. In fact, as companies develop expertise and achieve economies of scale, price often drops. Henry Ford, who started the Ford Motor Company in 1903, first introduced the Model T in 1908 at a cost of $850. He sold 10,607 models. By 1916, the father of the assembly line had decreased the price to $360 and increased the number sold to 730,041.
Therefore, before rushing willy-nilly into the field of robotics thinking that it is the next big thing, investors should take a close look at what many of the larger companies such as Toyota, Honda, and John Deere are already doing in the field of robotics. As great as many of the smaller companies’ robotic advances will likely be, if they can’t compete on price they might become nothing more than a historical footnote.
The Sky is the Limit
The final historical analogy worth considering is that of the airplane industry. The same year Henry Ford began Ford, the Wright Brothers also achieved their historic milestone. And like the train and automobile industries before it, the airline industry also took off—literally.
A while back I was an reading an edition of Scientific American and in its monthly historical section entitled “Years Ago,” it noted that in the year 1905—just two years after the Wright Brothers bounded from earth for their 12-second, 120-foot flight—a single plane flew a distance of 24 miles, which was a distance greater than all of the flights made in 1904 combined! It was, to say the least, an extraordinary amount of progress in such a short period of time. Of course, that was just the beginning of the story. By 1927, Charles Lindberg had flown across the Atlantic and in 1969 man reached the moon.
The pace of progress for the robotics industry is impossible to predict, but if one follows the advances being made in the fields of material science, computers, sensors, and software it is hard to imagine how robots won’t also become significantly more capable.
Today, robots are vacuuming and scrubbing our floors, tomorrow they could very well be reliable household companions that will allow millions of senior citizens to live independently in their homes by not only keeping their place tidy but also by fetching things, serving meals and even unobtrusively monitoring their owner’s health.
In every case, over a relatively short period of time, planes, trains and automobiles all grew exponentially more numerous and capable, while decreasing in price. History suggests there is ample reason to believe that robotics will follow a similar trajectory. To investors with the foresight, patience and willingness to perform the necessary due diligence, the opportunity could be of historical proportions.
Jack Uldrich is a writer, public speaker and host of jumpthecurve.net. He is the author of seven books, including Jump the Curve and The Next Big Thing is Really Small: How Nanotechnology Will Change the Future of Your Business, and speaks frequently on future trends, innovation, change management, nanotechnology, robotics and executive leadership.
