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The robots are coming

23-03-2015 | Opinion | Mark Glazener The renowned British physicist, Stephen Hawking, predicts that the advent of artificial intelligence will mean the end of mankind. Elon Musk, founder of PayPal and Tesla, thinks that robots could be potentially more dangerous than nuclear weapons. Dutch minister Lodewijk Asscher is somewhat less gloomy but feels that robots do pose a threat to employment.

Robots pose a threat to employment. This was a statement by Dutch Minister Asscher of Social Affairs and Employment during a congress on robotization last year. Asscher thinks that robots and automation will reduce employment opportunities in the near future: people will end up at home with nothing to do because the robots have taken over their jobs. Will 'work disappears where the robot appears' become a catchphrase for the next decade?

Embrace the robots!
Fortunately Asscher sees a number of ways of protecting our country from the robots. We must continue to invest in good education, to ensure that our children are as well prepared as possible for a changing employment market. Employers should also continue to invest in their workforce. And Asscher even suggests an adjustment to the tax system – the tax on labor should be reduced. Labor will then be able to compete more fairly with automation.

Chris Berkouwer, analyst at Robeco, recently made an in-depth study of companies in the industrial automation segment. His conclusion: "Don't be afraid, embrace technology!" The value chain is complicated and companies have to position themselves for a wide range of end markets. The robot population has grown exponentially over the last few years. In the last ten years the number of robots has increased by as much as 10% per year and in 2014 this figure was 15%. Most end up in the automotive industry, one of the first and most important markets for robots.

An interesting fact: in the Japanese car industry one in six employees is already a robot. In Germany it is one in nine, in China only one in 45. So there is considerable growth potential too. Robots are also increasingly appearing in other sectors, such as electronics, aviation, food and drink, and medical applications.

Advantages and prejudices
Robots have many advantages. They work hard (24 hours a day, 7 days a week), often do dangerous work, don't complain, don't strike and don’t demand higher wages or better working conditions. Costs are also an important factor. Chinese wage inflation has tripled over the last ten years, while the price of robots has fallen. Investment costs for a robot are now recouped in around three years, which means that after this period it is cheaper to have a robot than a factory worker. And now the prejudices. Will robots take over all the work? The answer is no. Countries that have been quick to implement the use of industrial robots actually enjoy higher growth and lower unemployment.

Low economic growth is regarded as a problem of our time, partially caused by low levels of corporate investment. The central banks have every reason to keep launching new monetary stimulus measures. This is a technology that can attract significant investment. If robots really do turn out to be so productive, it will have a positive effect on economic growth.

And this brings me to another way to prepare for the advent of robotization. There are numerous stocks that enable investors to benefit from the advance of the robots – from Japanese companies Fanuc and Nabtesco, to the Swiss ABB and German KUKA. Embrace those robots!

This column appeared at an earlier date on the Fondsnieuws website


Mark Glazener

Fund manager Robeco
“Carefully research the stock in which you want to invest, taking a critical view, and if you decide to buy, be prepared to wait patiently for a positive result.”
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Mark Glazener
Fund manager Robeco


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