The rise of robots

Given the increasingly fast-paced nature of the world we live in, technology has become ubiquitous in both our daily lives and operations. Mobile devices and computers are no longer just beneficial - they are necessities. The advances in technology have enabled us to be more efficient and productive, providing capabilities otherwise unattainable by humans alone. Nowadays, social robots have transformed business processes as well as operations to carry out more demanding tasks.

Robots are not only humanoid, a machine that can work autonomously is called a robot too. They are able to perform more complex and more dangerous tasks as they usually have copperheads and iron arms to lift heavy things and they can precisely assemble cars or other machines. For example, robots in steel mills can perform dangerous casting jobs while robotic arms on car production lines can perform complex welding tasks. After the epidemic, robots are even more advantageous

Some robots even can be used to explore outer space, or sent to the bottom of the ocean for scientific research, and some robots can even analyse and understand human languages. Not only to talk, but they can even make fun of you, just like a real human.

Key takeaways:

• Robots and investment
• Value chain of Industrial robot
• Industries that are most likely and not likely to be replaced by robots
• Difference between robots and chatbots
• Advantages and Disadvantages of Robots
• Listed companies in Malaysia that have involvement in social robots and industrial robots
• Bottom Line

How are robots related to investment?

As an investor, you may find social robots helpful in several ways. For example, they can use natural language processing (NLP) to sift through large amounts of data and identify market trends or potential investments. Moreover, social robots can be employed to interact with customers, giving them tailored advice and support. Additionally, social robots can be used to automate the back-end processes of an investment portfolio, such as trading and rebalancing. This would free up your time so that you can focus on other areas.

In the capital market, it plays an important role in the growth of robot industries. High-growth companies in this field often have strong capital market support. This enables them to scale quickly and achieve sustained success. The accelerating digitalization, intellectualization and automation of all aspects of life provide considerable opportunities for the development of the global robotics industry.

Value chain of Industrial robot

The industrial robot industry can be divided into three parts:

• the upstream, which included research and development of robotic technology, produces core components, designs of robots and procurement of necessary components
• the midstream, which included the assembly of robots, testing and calibration of robots as well as integrating and programming of robots
• the downstream, which offers distribution and sales of robots, installation and maintenance of robots as well as training and support for customers

Upstream

Core upstream R&D and manufacturing for industrial robots consists mainly of servo systems, reducers, and controllers, which account for approximately 70% of the total cost. The decelerator, servo system (including servo motor and servo drive), and controller directly affect the performance, reliability, and load capacity of the industrial robot, making those components critical to the overall success of the robot.

Midstream

The midstream is the whole machine manufacturing. The midstream of industrial robot manufacturing technology is mainly reflected in the structural design and processing technology of the whole machine. The goal is to solve mechanical problems such as mechanical protection, precision compensation, and mechanical stiffness optimization. Combined with dynamic control algorithms, various performance indicators can be achieved. The aim is to develop robot programming environments and craft packages that meet functional requirements for industries and applications.

Downstream

The downstream is the system integration. Downstream services for end-users and market applications include system integration, sales agents, local cooperation, industrial robot leasing, industrial robot training and other third-party services.

Industries that are most likely to be replaced by robots

According to the Ministry of Human Resources, they revealed that with the adoption of Industry 4.0 technologies such as automation, robotics and artificial intelligence, the top 10 jobs that are most likely to be affected are:

• data entry clerks
• contact centre salespeople
• settlement and freight forwarding
• fashion models
• legal secretarial work
• accounting assistants
• non-food product testers

According to the World Economic Forum, they expect the number of routine, middle-skilled white-collar roles to become excessive in the coming years and to be affected by new technologies and automation. In addition, there is also an overabundance of workers who are qualified to operate photographic equipment, labelling machinery, bottling and packaging equipment, and woodworking tools. The likelihood that these jobs will disappear is 97% to 99%.

Industries that are not likely to be replaced by robots

On the other hand, the Ministry of Human Resources also has revealed that the top 10 jobs that are likely to continue are:

• dietitians and nutritionists
• hospitality professionals
• education professionals
• medical specialists
• speech therapists
• social welfare managers
• psychologists
• hotel managers and managers of educational centres and medical service companies

There is only a 0% to 1% chance that these jobs will disappear. This is because robots have no autonomous consciousness. They are limited in comparison to human creativity. It will never be able to replace human qualities such as strategic thinking, leadership, conflict resolution and negotiation, emotional intelligence and empathy.

Difference between robots and chatbot

Bots and robots are both programmable machines that can make our lives easier, but they have some key differences. Bots are digital programs that automate tasks; on the other hand, robots are physical machines that usually tackle repetitive or difficult tasks. Additionally, while bots can perform a wide range of duties, robots are geared more towards physical tasks. Thanks to their similarities, bots and robots often work together to make our lives even easier.

Chatbots are a type of bot designed to communicate with humans, collect data and analyze interactions. In the past, they were seen as a novelty, but due to rapid advancements and a desire for more sophisticated technologies, chatbots have become their own entity. Chatbots can now access and adapt to users and consumers through the data they have collected. They are definitely something businesses should consider incorporating into their strategies. There are already some websites that use the same framework as chatbots to track their site traffic and study how they can improve their website. It won't be too long before we see and/or hear chatbots that are nearly indistinguishable from humans.

Companies that involve in chatbot:

• Grab Malaysia – provides a chatbot for customer service.
• AirAsia – provides a chatbot for customer support.
• IKEA Malaysia – provides a chatbot to help customers find products and answer product-related questions.
• Digi – provides a chatbot to help customers with their queries.
• Maybank – provides a chatbot to help customers with their banking queries.

and etc.

Advantages and Disadvantages of Robots

Advantages:

• They can live “forever”. They do not need a salary, do not need to rest or take leaves. Hence, they can reduce labour costs
• They do not make mistakes. Hence, they can reduce human error.
• They are high efficiency, stable and reliable and possess high repeat positioning accuracy.
• High safety which can reduce work-related injuries.

Disadvantages:

• High cost and expensive
• Not able to deal with emergencies, not as flexible as human
• High maintenance costs
• Robots are vulnerable as they are unable to respond quickly beyond the established environment and context
• Unpredictability on the unknown system errors which will lead to bad decisions

Listed companies in Malaysia have involvement in social robots

1. HLT Global Berhad
2. Inix Technologies Holdings Berhad
3. ST Engineering Berhad
4. OCB Berhad
5. UWC Berhad
6. Scomi Group Berhad
7. MTAG Group Berhad
8. AME Elite Consortium Berhad
9. Aemulus Holdings Berhad
10. CSF Group Berhad

Listed companies in Malaysia that have involvement in industrial robots

1. Aemulus Holdings Berhad
2. Greatech Technology Bhd
3. Inari Amertron Berhad
4. KESM Industries Berhad
5. Pentamaster Corporation Bhd
6. UWC Bhd
7. Vitrox Corporation Berhad
8. WCT Holdings Berhad

The bottom line

“Will robots eventually take the place of human beings?” “Do robots pose a great threat to humans? ”

These are questions that have been asked frequently as of late. Robotics is indeed a promising field and a hot topic in this era. For example, the World Robot Conference in August 2022， Elon Musk revealed a humanoid robot at Tesla in September 2022 etc.

According to Malaysia Robotics Market Size And Forecast, “Malaysia Robotics Market size was valued at USD 80.79 Million in 2019 and is projected to reach USD 273.61 Million by 2027, growing at a CAGR of 17.50% from 2020 to 2027.”

However, the rise of automation does not mean the end of employment opportunities. Instead, it heralds the beginning of new jobs and skill sets. Advances in technology often create new industries and professions, as well as new positions within existing ones. For instance, AI derived intelligent industry, 3D technology, Diversified industrial robot technology, Human-Machine Collaboration, Automation Mining Technology etc.

During the《World Artificial Intelligence Conference in Shanghai》 in 2019, Jack Ma stated that he is optimistic about the development of AI. He believes that robots are invented by humans, hence they will never be smarter than humans. On the other hand, Elon Musk believes that the advancement of AI is a grave threat to humanity.

Self-awareness and consciousness are integral parts of human intelligence. However, a robot or any other AI technology falls far short of this standard. If a robot can one day attain these features, it will truly become a great threat to humans. What do you think?

References

• 透视大马 2020. 工业4.0下消失与存在的10大职
• World Economic Forum
• Jacob Biba 2022. What Is a Social Robot?
• Andrew Grima 2021. Robots Taking Jobs, But Creating Careers
• Rebekah Carter 2019. Is There a Difference Between Bots and Chatbots?
• 国信证劵 2020. 机械行业 2020 年 8 月策略

Author

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This article is written by Dion Chai, Research Analyst

Dion Chai is a fresh graduate student majoring in Finance and Investment in Tunku Abdul Rahman University of Management and Technology (TAR UMT). Dion once participated in the CFA Research Challenge and Trading competition organized by Malaysian Finance Expert Convention 2022. She is an in-house author from TED Optimus.