Category Archives: Automation

American home buyers are becoming increasingly aware of how their lifestyles can impact the land they live on, the water they drink, and the air they breathe. Many are actively seeking ways to reduce their consumption and protect the environment with in-home devices that monitor and regulate energy usage.

The reality is that builders can help clients and prospective buyers run a sustainable home far beyond the implementation of green building materials. Todays generation of advanced cost-effective automation platforms can reduce a homeowners carbon footprint greater than ever before, and provide a thorough, permanent and measurable energy-efficient solution that is fully integrated into the home.

Home automation offers control over every system within a residence such as irrigation, electricity, lighting, climate, HVAC, shading, entertainment and security through mobile apps or proprietary remotes and touch screens. In addition to allowing a homeowner to shut off the lights or adjust the shades with a single command, a home automation platform lets these systems talk to each other. And these systems can react, on a customized basis, to seasons, time, motion, occupancy, temperature, humidity and other conditions. So, in addition to instant control, homeowners can configure certain actions to occur autonomously on a regular basis throughout the year.

With a home automation system, various subsystems such as security, lighting, climate and irrigation can be set to respond to each other in a way that conserves energy. For example, a window opening can automatically turn off the air conditioning in that area. Smart shades can be programmed to lower during the height of the summer day to block the sun out keeping the home cooler without having to turn on the air conditioning. Customized events can be built-in, such as home and away, to automatically reduce energy consumption accordingly and the homeowner can control these events remotely, from anywhere in the world. The opportunities to conserve energy through home automation are substantial.

These systems also allow homeowners to monitor their energy output in real time, and refer to past logs to adjust their activity. They can view the history of their HVAC system, monitor indoor and outdoor temperatures, and configure settings to adjust how they use their heating or cooling in the future. Additionally, automation systems can monitor the power consumption of the homes devices, which helps to avoid phantom power, an effect that frequently occurs with products in standby mode, consuming power without actually needing it at the time.

These energy-efficient practices do not sacrifice luxury or convenience. Green homes start with energy management and control, but they dont end there. The same systems that provide energy monitoring and conservation also provide entertainment benefits for the homeowner. Control and automation can also include entertainment systems such as multi-room audio systems, media rooms, or pool and spa temperature control. For example, while automated shades provide a cooling effect that conserves energy, they also conveniently provide shade to block out light while watching television in a media room.

Sophisticated yet easy-to-use automation systems are already being integrated into LEED-certified homes across the country. In 2015, the Sunset Green Home project in Southampton, N.Y., was built with an ELAN automation system to maximize the economical use of lights, shades/drapes, ceiling fans, HVAC, and outdoor systems such as landscape lighting and irrigation, ensuring that all measures were taken to conserve energy without sacrificing comfort or convenience.

To successfully build a smart home, it is essential for builders to consult an expert that understands how the control and automation system works, and how it integrates with the homes subsystems. Builders can and should capitalize on home automation by partnering with technology integration experts who specialize in green homes. It also is beneficial for a builder to work with an integrator who can service the homeowner after the home is sold.

Todays home buyers seek the benefits home automation delivers, and they are increasingly demanding solutions that reduce their energy consumption and carbon footprint. Builders can attract more business by offering home buyers solutions that integrate green home solutions into the enhanced, automated home.

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Home Automation Yields Green Benefits | Builder Magazine | Home ... - Builder Magazine

Will a universal basic income make the U.S. better? News & Observer To better understand the future of our economy and work, especially in the wake of globalization and automation, there is a growing body of literature worth paying attention to. One recent book that deserves attention is Raising the Floor: How a ...

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Will a universal basic income make the U.S. better? - News & Observer

The world of networking is moving rapidly to software-based systems that offer automated provisioning, improved management and security, and better support for DevOps-style application development. The automation benefits of software-based networking are critical to support the adoption of new IT and network architectures, including hybrid cloud and the internet of things.

Traditionally, networks were built with hardware-based platforms optimized for specific functions. These boxes include routers, Ethernet switches, Wi-Fi controllers, server load balancers and network security appliances, such as firewalls and intrusion-detection systems. Network hardware typically runs complex, distributed control software -- all with unique provisioning and management systems. Provisioning and management requirements vary by the type of networking and the network location. Provisioning and modifying hardware-based networks is a time-consuming manual process and one that requires trained network professionals.

The emergence of software-based networking frees IT professionals to migrate toward networks that offer automation, customization, interoperability and platform independence. Developers can design applications that are abstracted from network resources. These networks lead the way toward significant improvements in automation.

Network automation establishes standard processes so that network deployment, configuration and management tasks can be shifted from people to software. Software-based networking automates the provisioning of required network services, such as bandwidth, routing and security.

IT professionals can benefit from the push-button simplicity of software that reduces or eliminates mundane updating in quality of service (QoS), auditing of Ethernet switches and maintaining access-control lists. Network uptime and security is improved by eliminating human errors that accompany any complex manual task.

Network automation gives IT organizations deploying complex applications the ability to control the rapid provisioning of network resources. It provides the ability to centrally manage the network and reduce operational costs by shifting the challenges of configuration from people to technology. Software-based networks can select appropriate network services based on parameters, such as application type, quality of service and security requirements.

Automation via software can direct the network to provide services aligned with its associated applications and support rapid deployment of a large number of new applications and microservices.

Provisioning. Traditional methods of network provisioning, such as manually configuring each device, can't scale to meet the complexity of distributed applications. Network automation makes it possible to rapidly provision appropriate network resources across dynamically shifting workloads and thousands of devices. Many hyperscale cloud providers -- including Google, Apple, Facebook and Microsoft -- deploy software network technologies to help automate the provisioning of their networks.

Configuration and change management. Network professionals spend significant time and resources adapting the physical and virtual network to changes in applications, compute and storage resources, and device location. Software-based networking tools can automate change management by associating specific network and security policies with applications and devices that can "follow" them as they migrate physically and virtually.

Software-based networking automates the provisioning of required network services, such as bandwidth, routing and security.

Application-aware QoS. This is the ability to identify specific traffic types, like voice and video, and prioritize network resources to deliver the appropriate QoS. Organizations can also design policies to automatically change network bandwidth for high-value applications. Organizations have started to deploy software-defined networking that measures application performance, detects changes in traffic flow and selects the path data takes through a network based on parameters, such as application type, QoS and security rules.

Centralized networking management. IT professionals often struggle to rapidly identify challenges associated with network slowdowns or link failures. Finding the needle in the haystack in large, complex networks takes time. Network software can provide centralized management with the ability to detect both physical and virtual network problems and, in some cases, automatically resolve them.

Network security. Network automation can offer appropriate security policies for the range of devices that connect to the network. Software networking products provide network segmentation to support multi-tenancy and network isolation of critical applications. Network automation can feed critical analytics data to supported third-party network security software.

Network automation enables DevOps. The network is responsible for rapidly provisioning the appropriate resources for DevOps applications. Rapidly changing requirements that a microservices architecture presents can challenge the capabilities of traditional networks. The network plays a critical role in securing and managing rapidly migrating DevOps-style applications. The disaggregation of the application means that there are too many moving parts for manual networking, so network automation is critical. The ability to pretest network resources with DevOps is important to avoid potential slowdowns of application deployment times.

For all the potential of network automation, it is a challenge for IT professionals to build highly automated networks. With the exception of greenfield builds, deploying and managing network resources across physical and virtual networks -- and across data centers, campus and branch locations -- remains a largely manual and labor-intensive undertaking. Hyperscale cloud providers with automated network data centers have the advantage of large engineering staffs to design custom software networks to fit their unique requirements.

For enterprise IT professionals, the challenge is to identify suppliers and their products that can help begin to automate manual processes. The reality is there is no clear architecture or blueprint on how to migrate to a more automated network. A number of standards bodies, including the Open Networking User Group, the OpenDaylight Project and OpenStack, are working to develop practical software networking architectures. Buyers remain unsure which standards, vendors and products are the most likely to gain market traction. There are a large number of suppliers and products that provide improved automation via software networking products. These include the following:

There are many other specialized suppliers who provide software-based tools to improve network management, security and analytics.

The requirements of hybrid cloud, container deployment, and new internet of things devices will continue to strain network resources. The first generation of software networking products will provide some tactical gains in specific parts of network operations, such as the data center and SD-WAN. Strategically, many IT managers would like to move toward more of a network-as-a-service model where bandwidth and other network resources can be automatically and dynamically allocated to specific applications.

The lessons learned by the hyperscale cloud providers are beginning to trickle down to enterprise networks. Open source, improved standards and better software will bring significant improvement in network automation over the next few years. Longer-term advances in machine learning and artificial intelligence will no doubt lead to improved network automation.

The benefits of network automation have been clearly demonstrated by the hyperscale cloud providers. Software networking provides the abstraction from the hardware layer that provides the flexibility, automation and multivendor support required for today's networks. Leading IT organizations require rapid provisioning, scalable resources and automated operations to flexibly deliver IT services. Network automation is critical to meet the scale and complexity of distributed applications.

The market is moving toward software-based networking -- as opposed to networking as a number of boxes. The challenge for IT professionals is to pick the right standards and partners to help the journey to a more agile style of networking. Lack of standards and no clear supply-side market leader means IT professionals should start to implement network automation with clear advantages.

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Software-based networking brings new automation perks, challenges - TechTarget

Saturday, April 22nd 2017 - 14:15 UTC Lagarde stressed that aging populations, political instability and the sword of protectionism all threaten self-inflicted wounds on economies across the globe.

The International Monetary Fund managing director Christine Lagarde said that to get the global economy moving at a faster pace it was necessary to share the benefits of capitalism, more global regulation and more action to protect workers against automation and robots.

Speaking at an event by Bruegel, an economic think tank, Ms Lagarde said the global economy once again has a spring in its step but that countries need to pursue growth-friendly fiscal policies.

Lagardes call was an anticipation to the annual discussions between the worlds central bankers and finance ministers that will take place in Washington, at the IMFs so-called Spring Meetings and a meeting of G20 finance ministers. And in a swipe at the Trump administration, Lagarde said we need an approach that encourages countries to support strong international cooperation.

And referencing Brexit and the upcoming French presidential election, Lagarde said now is not the time to trash the architecture underpinning the global economy for seven decades.

Lagardes warning stressed that aging populations, political instability and the sword of protectionism all threaten self-inflicted wounds on economies across the globe.

Strong national economies should not expect to be immune from the problems of their neighbors, Lagarde said, promising major spillovers across borders if these problems are not addressed head on.

Lagarde singled out the EU for failing to enforce its own single market rules. She said that EU directives would unleash growth if they were simply properly enforced. Lagarde said the unenforced rules covered barriers to entry in retail and professional services.

On financial services, Lagarde said financial stability requires that we complete the reform of global financial regulations. Additionally, restricting trade would be a self-inflicting wound that disrupts supply chains, hurts global output and inflates the prices of production materials and goods, she continued.

We are not goody-goody about trade. We know that trade brings with it negative side-effects, Lagarde conceded to critics of globalization.

However, she warned that automation as much as trade is the root cause of social dislocation in many Western economies. Trade is not a dominant factor, Lagarde said.

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IMF Lagarde calls for "growth friendly fiscal policies" and warns on automation - MercoPress

The global lab automation market is projected to USD 5.48 Billion by 2021 from USD 3.92 Billion in 2016, growing at a CAGR of 6.9% from 2016 to 2021. In this report, the global lab automation market is broadly segmented by equipment and software, application, type, end user, and region.

Major factors fueling market growth are such as process miniaturization, progressing drug discovery and clinical diagnostics, shortage of laboratory professionals, benefits of lab automation over traditional laboratory settings, and presence of government and corporate funding for biotech and pharmaceutical research are expected to drive the growth of the global lab automation market in the coming years. On the other hand, lack of planning for technology development, low priority for lab automation among small and medium-sized laboratories, and indefinite data interchange/communication standards are the major factors that are restraining the growth of the lab automation market.

The global lab automation market is segmented into major six segments, namely, automated liquid handling, microplate readers, software & informatics, standalone robots, automated storage & retrieval systems (ASRS), and other equipment & software. Among these segments the automated liquid handling segment is expected to account for the largest share of the lab automation equipment and software market in 2016. This largest share is attributed to thee high demand for automation in liquid handling in various hospitals and private labs, biotechnology and pharma industries, academic and research institutes.

Companies Mentioned

Key Topics Covered:

1 Introduction

2 Research Methodology

3 Executive Summary

4 Premium Insights

5 Market Overview

6 Lab Automation Market, By Equipment and Software

7 Lab Automation Market, By Application

8 Lab Automation Market, By Type

9 Lab Automation Market, By End User

10 Lab Automation Market, By Region

11 Competitive Landscape

12 Company Profiles

For more information about this report visit http://www.researchandmarkets.com/research/wb2twv/lab_automation

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Research and Markets Laura Wood, Senior Manager press@researchandmarkets.com

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Global Lab Automation Market to Reach $5.48 Billion by 2021: Analysis By Equipment and Software, Application, Type ... - PR Newswire (press release)

When it arrived in December, the White Houses report, Artificial Intelligence, Automation, and the Economy felt like both a parting shot and warning to the incoming administration. That it was perfectly dovetailed with heated election rhetoric around domestic job loss was simply a bit of serendipity, however.

The subject matter had been at the forefront of the papers authors for some time. In fact, it was a sequel of sorts to study released by the White House the month prior to the election. AI and automation were topics co-author Jason Furman says the Obama White House discussed regularly, between meetings about autonomous vehicles and factory safety.

Its one that showed up in a lot of different places in our policy making, Furman, now a Senior Fellow at the Peterson Institute for International Economics told TechCrunch in an interview this week. We would have a meeting about where the jobs were going. AI was popping up in so many separate policy processes and issues that the White House chose to do a pair of reports, the first focusing on the issue and the second focused on the economic aspects of it.

Between campaign trail promises and post-election photo ops, the thread seems to have been lost on the subject. Economic discussions in recent months seem focused specifically on trade and immigration longtime talking points and frequent scapegoats that are far easier to distill on the stump than cutting edge technologies.

In March, Treasury Secretary Steve Mnuchin even went so far as brushing off such questions by characterizing questions about AI-driven job loss as if it were something out of some dystopian sci-fi novel, telling Axios that it wasnt even on my radar screen. Far enough that its 50 or 100 more years.

Now, the January report wasnt exactly a call to take arms against Skynet, but it does address some important truths about automation and AI that have already begun to have a very real impact on both the economy and domestic jobs. For all the growth potential these technologies offer to the U.S. economy, its an unavoidable fact that there has been and likely will continue to be short-term gross domestic job loss.

Though Furman says he believes that, as with other economic factors, technology too often serves as a scapegoat.

I think automation is too easy an out and lets policy makers off the hook, he explains. France has a much higher fraction of prime age workers in its work force than the US does. Thats not because France has less automation. Its because they have labor market institutions that, while still very problematic, do a better job of helping people find work than they do here in the United States.

Those who are particularly bullish about the future of automation point to past technology breakthroughs like the industrial revolution, which didnt so much kill jobs as shift the economy away from things like agriculture. What that means, ultimately, is that short term job loss can give way to long term job growth, as new and potentially better jobs are created. And certainly one thing automation and robots have the potential to do is help eliminate what the industry has handily deemed the three Ds dull, dirty and dangerous jobs.

But among these polarizing conversations around the growth of technology in the industrial setting, an important point often gets lost: if left unchecked, it can serve to expand the already vast economic gulf between what have been deemed skilled and unskilled workforces. MIT economist David Autor summed the fear up well in a conversation we had earlier this year.

The labor market for college-educated workers is very, very strong, he told me. And those people continue to get paid better. The set available to people who just have a college education or less has dramatically contracted as a function as well as trade, but automation has been the bigger fact. Its an important part of the growth of inequality weve seen over the past several years, the decline of earnings and fortunes of people without a college degree.

The solution, it turns out, could be simple. Investments in education and job training could help stem the bleeding and bridge the gulf.

More education would absolutely help, says Furman. I think more of what economists call active labor market policies training, job search assistance and subsidies for jobs. Not all of those programs work, but theyve gotten a worse reputation than they deserve. We basically dont try very hard. We spend 0.2-percent of our GDP helping people find jobs and prepare them for jobs. Thats lower than any other OECD country except Mexico and Chile.

Of course, all that requires financial investments which may not prove a popular solution in a political climate more invested in building walls and hampering trade with other countries. But AIs impact on jobs is not a conversation to put off for 50 or 100 years in the future.

I am not sure whether what we want is hard skills like STEM or soft skills like judgment and figuring out how to be nice to the person next to you, which robots arent nearly as good at, says Furman. My guess is its some combination of both. It would be good to get the answer exactly right, but I think getting the answer even partly right would be a good improvement.

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Former White House economic advisor Jason Furman discusses how automation will impact jobs - TechCrunch

WASHINGTON

World Bank President Jim Kim warns that two-thirds of jobs in developing nations could be wiped out by automation, a situation that could boost conflict and refugee flows.

Kim spoke Thursday in Washington as economic and political leaders from around the world gathered for meetings of the World Bank and the International Monetary Fund.

Watch: World Bank: Automation Could Wipe Out Two-Thirds of Jobs in Developing Countries

Kim says it is not clear how fast automation would cut jobs. He says the threat to employment opportunity comes as near-universal access to the internet means people in the poorest nations understand that others have much more comfortable lives. The result, Kim says, is soaring aspirations. Without economic growth and opportunity, those unmet aspirations could lead to frustration, unrest, or more refugees seeking jobs in other nations.

The World Bank president says the issue is urgent because the world already faces serious problems with conflict, climate shock, famine and the worst refugee crisis since World War II.

Kim says the solution is to mobilize trillions of dollars in private capital that currently is earning little or no interest. He says World Bank experts are seeking ways to help commercial lenders make such investments in ways that are less risky and more commercially viable. According to Kim, this is the only way to move with enough force and speed to manage a problem of this size.

In the United States, worries about jobs being lost to computers and automation grow out of the millions of manufacturing jobs lost since 1999. While some politicians blame trade for these employment losses, many economists say most of those jobs vanished because of automation.

While manufacturing jobs proved vulnerable to automation, research shows different results in banking, where the addition of hundreds of thousands of Automated Teller Machines, or ATMs, was accompanied by a slight increase in jobs for humans. Workers who were displaced when robots took over repetitious, tedious work moved to jobs that were less predictable or that required human, emotional connections, such as sales.

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Automation Could Slash Jobs in Developing Countries - Voice of America

Having established itself as a leader in multiple segments of the Japanese factory automation sector, Yaskawa Electric (OTCPK:YASKY) is trying to repeat its success in China as that country increasingly adopts automation. The company has done well thus far, but the cyclical nature of the industry and its dependence upon customer capex (not to mention forex exposure) have made for choppy share price performance over the past five years.

The shares are now off more than 10% from their recent high and look as though they could be slightly undervalued. I'm not looking for exceptional revenue growth in the coming years, but I do think the company can improve its margins and continue to leverage its strong share in servomotors. If adoption of servomotors, inverters, and robots can spread beyond today's core markets (and if Yaskawa can broaden its horizons in robotics), there could additional upside to sweeten the prospects.

Yaskawa's ADRs are not especially liquid. I would suggest that investors consider the Japan-listed shares instead.

A Significant Player In Factory Automation

"Automation" means a lot of different things, including everything from motors and drives to servomotors and linear guides, to robots, control systems, and software. Yaskawa's expertise is in servomotors (a key component in many types of factory automation equipment), inverters, and robots.

Close to half of the company's revenue comes from its motion control products (servomotors and inverters), and this business contributes more than 60% of profits. Servomotors are more accurate than conventional AC and DC motors, and they are used in a range of applications like robots, machine tools, injection molding machines, pressure devices, and other types of factory equipment. Yaskawa is the leading player in the world, with close to 20% share, though it's much stronger in Japan (where it competes with MELCO) than in North America or Europe, where companies like Bosch (OTC:BSWQY), Siemens (OTCPK:SIEGY), and Rockwell (NYSE:ROK) are more significant. Inverters alter the frequency or voltage to regulate motors, leading to improved performance and greater energy efficiency; air conditioners, elevators, and escalators are key markets. Yaskawa is a co-leader in the field with ABB (NYSE:ABB), but again Yaskawa's market position is stronger in Asia than in Europe and North America.

Robots contribute more than a third of Yaskawa's revenue and more than 40% of operating income. Yaskawa is one of the major players in factory robots, offering a suite of products including more complex multi-arm/multi-joined systems. While the company's share of approximately 20% places it second behind Fanuc (OTCPK:FANUY), it has stronger positions in specific segments like arc welding, painting, and glass sheet transfer.

The remainder of Yaskawa's revenue comes from Systems Engineering, something of a catch-all business that includes electrical control systems for steel plants, electrical systems for wind power, and so on. This business has been generating small operating losses for a little while, though management is bullish on the long-term prospects for its wind power business.

Leveraging China And Looking For New Opportunities

China is a fast-growing market for automation, as companies here look to improve product quality and consistency and control production costs. China has grown from a mid-teens percentage of Yaskawa's sales to more than 20%, and the company generates more revenue in its robot business from China than anywhere else (at least in recent quarters).

Competition is a threat. China's government has actively encouraged local companies in factory automation, and a few companies like Siasun (in robotics) are becoming more credible players. Thus far, the offerings from Chinese companies are less sophisticated and capable, but the gap is shrinking and shrinking faster than companies like Fanuc, Yaskawa, and ABB would care to admit. That said, Yaskawa's strong position in servomotors and inverters is an important factor to remember, as it sells servomotors to some Chinese robotic manufacturers (particularly on the lower end of the market).

Yaskawa is looking to extend its strong Japanese share in motion control and robotics into China, and thus far, it has been executing well. While most industry demand for servomotors is in machine tools, Yaskawa actually skews more strongly toward electronics, with its products used in semiconductor and LCD manufacturing, smartphone manufacturing, and so on.

Yaskawa is also looking to leverage opportunities to grow outside traditional markets. While servomotor demand has in the past largely been driven by machine tools and semiconductor/LCD equipment, the improving cost/benefit ratio of these components is leading to wider adoption in areas like injection molding and other new markets.

Wider adoption of robots could be an even bigger opportunity. The auto and electronics sectors have historically been the largest customers for robots and by a wide margin (roughly 70% of demand). More recently, though, adoption has started picking up in markets like aerospace, food/beverage, materials handling, as well as overall "general industrial" applications. Yaskawa has been a little slow to get involved in the emerging cobot trend (small robots that can work safely around humans) that has attracted a lot of attention for Teradyne (NYSE:TER), but management has laid out some ambitious goals for the development of cobots in service settings (robots that could help people in a caregiving setting).

The Opportunity

Yaskawa has been shifting more and more production away from Japan (where it used to manufacture about 70% of its products), improving margins and giving it more flexibility to work with local partners. Margins in the motion control business have been pretty consistent in the low-double digits, but margin leverage in the robot business has been harder to come by. Unlike Fanuc, which is exceptionally good at standardizing components to maximize margins, Yaskawa is still working on achieving better component standardization without compromising its ability to work with customers to deliver customizable solutions.

The cyclicality of the semiconductor and smartphone markets is a challenge for Yaskawa, not to mention the cyclicality of capex spending on industrial manufacturing. I'm not looking for especially robust revenue growth for Yaskawa, due in large part to its heavy skew (roughly one-third of revenue) to the low-growth market of Japan and the risk of increasing competition in China. The wind power systems business could be a bigger driver than I estimate, though, and Yaskawa could likewise find more success in smaller robots than I currently model.

I do expect better things on the margin side, as the company leverages improving volumes and works to drive costs out of its robot business. Companies like ABB and Fanuc are of limited use as comps because the product mixes are different, but I do believe Yaskawa can drive its FCF margins into the mid-single digits, allowing the company to leverage low-single-digit revenue growth into double-digit FCF growth in the coming years.

The Bottom Line

Discounting back the cash flows, I think Yaskawa is around 5% undervalued today. That's admittedly not "strong buy" territory, but the company could still have some outperformance left - particularly if machine tool orders improve and the next iPhone launch goes well. Longer term, a recovering Chinese economy and greater investment in automation within China should help return Yaskawa to double-digit ROICs and the shares could be a decent holding for patient investors.

This article is part of Seeking Alpha PRO. PRO members receive exclusive access to Seeking Alpha's best ideas and professional tools to fully leverage the platform.

Disclosure: I am/we are long ABB.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

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Yaskawa Electric Leveraging The Automation Of China - Seeking Alpha

ABB (NYSE:ABB) has slowly built itself into a leader in automation technologies via both in-house product development and shrewd acquisitions. With its latest acquisition of B&R, ABB has transformed itself into an end-to-end provider of automation and robotic technologies. The global trend towards increased automation across all industries is very clear. The largest economy in the world, the U.S., may already be in the midst of a manufacturing renaissance powered by automation and robotics. In a recent article about Rockwell Automation (NYSE:ROK), I had stated that convergence of robotics, industrial automation and enterprise software is very likely. After studying ABB, I am convinced that the convergence is essential to drive productivity gains and to reduce costs in the long run.

Until January 2016, ABB was comprised of five divisions:

As of January 1, 2016, ABB streamlined its operations and organized under four divisions:

o The power grids division, which was formed from the combination of its Power Products and Power Systems divisions, offers electrical and automation products, system, software and service solutions across the electric utility business.

o This division offers solutions across the full electrical value chain from substation to the point of electricity consumption.

o The products in this category include modular substation packages, distribution automation products, switchgear, circuit breakers, measuring and sensing devices, control products, etc.

o This division provides products and solutions that increase industrial productivity and energy efficiency.

o Products in this division are motors, generators, drives, power electronics and robotics.

o This division offers integrated control products, systems and service offerings to customers in oil and gas, minerals and mining, metals, pulp and paper, chemicals and pharmaceuticals, food and beverage, power generation and marine industries.

Discrete and Process Automation divisions accounted for 45% or about $15.3 billion of the revenue in 2016. In fact, automation has consistently accounted for over 40% of the revenue since 2008.

Exhibit: ABB Total Revenue and Revenue from Discrete and Process Automation (Source: Company Filings)

Exhibit: Discrete and Process Automation As a % of Total Revenue (Source: Company Filings, Author Calculations)

ABB reports its revenue from the robotics business under Discrete Automation and Motion. Since 2010, the robotics business has seen a turnaround and it grew at a "double-digit" pace in 2011. ABB's robotics business continued to show growth in 2012 through 2016.

Cage-Free Robots or Cobots

Traditionally, for robots to safely work alongside humans, they needed to be in cages. Keeping robots in cages did help with safety of human workers, but it also made the manufacturing line inflexible and increased cost. But, a new range of cage-free robots or collaborative robots are bringing multiple benefits to the manufacturing line. These include:

Also, as robots get smarter, faster and cheaper, they're being deployed to more tasks. ABB introduced its collaborative robot called YuMi in 2015. This product is an acknowledgement by ABB that collaborative robots are here to stay and could potentially be used in more tasks across different industries.

Exhibit: Number of Robots Sold in the U.S. is Increasing (Source: PWC)

Exhibit: Robots Taking on New Jobs in Different Industries. (Source: PWC)

YuMi - Creating an Automated Future Together. You and Me. (Source: ABB Website)

Exhibit: ABB YuMi Collaboration Robot (Source: Company Website)

According to the International Federation of Robotics, between 2010 and 2015, the average robot sales increase was at 16% per year compounded annual growth rate (CAGR). Between 2005 and 2008, the average annual number of robots sold was about 115,000 units. Between 2010 and 2015, the average annual supply rose to about 183,000 units.

Exhibit: Number of Industrial Robots Sold Worldwide (Source: International Federation of Robotics)

The size of the industrial robotics market in the U.S. and the world as measured by number of units sold might seem less, but as robots become cheaper and more adoptable to tasks in different industries, its use will continue to grow. Even before ABB introduced the YuMi collaborative robot, it was seeing good growth in its robotics business. YuMi might increase the total addressable market for ABB.

Acquisition of B&R

ABB acquired B&R Automation in April of 2017. B&R had $600 million in revenue at the time of the acquisition.

Exhibit: Snapshot of B&R Automation (Source: Company Filings)

This acquisition propels ABB into a leadership role in industrial automation and completes the product portfolio in this key segment that is a driver of Industrial Internet of Things (IIoT).

Exhibit: ABB Now Has a Complete Portfolio of Products for Industrial Automation (Source: Company Filings)

The current low oil prices coupled with the low prices for metals and minerals has put a lot of pressure on these heavy industries to improve productivity and lower cost. It seems fairly certain at this time that barring a rise in geopolitical tensions, oil prices will remain low for the foreseeable future. As shown in the charts above, ABB generates substantial revenues from process automation and the use of robots and industrial automation is one way to achieve increased productivity.

ABB is well positioned to take advantage of convergence of robotics and industrial automation. The B&R acquisition further strengthens ABB in the factory automation space. There might be more consolidation in the robotics space due to the convergence and also due to competitive forces.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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ABB: Dominating Industrial Automation And Robotics - Seeking Alpha

Indias youth are confident that theyre ready take on the automation trend. According to a new survey of more than 1,000 young professionals, most millennials in India dont view the impending surge in automation as a threat to their jobs.

A full 83% of 21-to-24-year-olds surveyed by Talentedge, an education technology firm based in Gurgaon, said they were confident that automation will not render their job roles obsolete, and 43% of them believed they already had the skills to tackle automation. Respondents in the 25-to-30-year-old age group were less convinced44% of this group saw a future where robots could take over their jobs. However, nearly half of them said they would build up their skills to combat any chances of losing a job to a robot.

A growing trend in the last few years has been an increasing number of working professionals opting for online courses, with an aim to acquire new skills and competencies to remain relevant, Talentedge CEO Aditya Malik says.

Respondents who worked for companies that had recently fired people, or ones that had plans for layoffs, mostly did not hold automation responsible for the downsizings. But those under the age of 24 were most likely to think that way64% of them said automation wasnt the primary reason for the layoffs around them, while just under half of respondents aged 25 to 30 concurred.

Forecasts by Indian employers suggest that workers ought to be a bit less optimistic about what automation portends for their future. More than a quarter of them plan to cut headcounts as a result of automation, while just 12% of employers globally expect to do so, according to a 2017 report from ManpowerGroup covering 18,000 employers from 43 countries.

Although robots are mainly slated to take over mundane, repetitive tasks while leaving skill-heavy jobs for humans, thats hardly reassuring for India, where only 2% of the workforce is skilled. Even though the government takes measures to help citizens develop new skillsone such program (pdf) aims to train at least 300 million skilled workers by 2022a 2012 Oxford study (pdf) suggests that the system fails to reach 90% of the countrys working population.

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Indian millennials don't seem very worried about losing their jobs to machines - Quartz