68

5. Advanced robotics

During the past few decades, industrial robots have taken on a variety of
manufacturing tasks, usually those that are difficult, dangerous, or impractical
for humans—welding, spray-painting, or handling heavy materials, for example.
Robotics is now seeing major advances that could make it practical to substitute
machines for human labor in increasing numbers of manufacturing applications,
in many service applications, and, importantly, in extremely valuable uses such
as robotic surgery and human augmentation. Advances in artificial intelligence,
machine vision, sensors, motors, and hydraulics—even in materials that mimic a
sense of touch—are making this possible. Robots are not only becoming capable
of taking on more delicate and intricate tasks, such as picking and packing
or manipulating small electronics parts, but they are also more adaptable and
capable of operating in chaotic conditions and working alongside humans. At the
same time, the cost of robots is declining.

Advanced robotics promises a world with limited need for physical labor in which
robot workers and robotic human augmentation could lead to massive increases
in productivity and even extend human lives (see Box 7, “Vision: Machines end
physical toil and improve lives”). Many goods and services could become cheaper
and more abundant due to these advances. The physically handicapped and the
elderly could lead healthier and less-restricted lives using robotic prosthetics and
“exoskeletons” that strap on like braces and assist in locomotion. We estimate
that the application of advanced robotics across health care, manufacturing, and
services could generate a potential economic impact of $1.7 trillion to $4.5 trillion
per year by 2025, including more than $800 billion to $2.6 trillion in value from
health-care uses. This impact would result from saving and extending lives
and transforming the way in which many products are built and many services
are delivered.

Advanced robotics also holds a great deal of promise for businesses and
economies. Early adopters could gain important quality, cost, and speed
advantages over competitors, while some companies could find that advanced
robotics lowers the barriers for new competitors. Businesses in developing
economies could be among the biggest buyers of robotics given the current
rate of automation; however, these economies could be negatively impacted by
falling demand for low-wage manual labor, upon which they rely for economic
development. The ability of robots to take on a far wider range of jobs
economically could encourage global companies to move some production
back to advanced economies. In advanced economies, some workers might
find new job opportunities in developing, maintaining, or working with robots. At
the same time, many jobs in advanced economies involving manual labor might
be automated away, placing even more importance on educating and retraining
workers for higher-skill jobs.
McKinsey Global Institute
Disruptive technologies: Advances that will transform life, business, and the global economy 69

Box 7. Vision: Machines end physical toil and improve lives

Imagine a world in which advanced robots expertly and inexpensively
perform and augment most physical tasks. Imagine you are a manager in
a manufacturing plant in 2035. At your plant, injuries are virtually unheard-
of. In fact, there are few people on the floor: a small group of highly skilled
specialists oversee thousands of robots, interacting naturally with the robot
workforce to produce goods with unprecedented speed and precision,
24 hours a day, 365 days a year.

When a new product or design improvement is introduced, factory

workers train robots to follow new routines, using simple touch-screen
interfaces, demonstration, and even verbal commands. Most of your day
is spent optimizing processes and flows and even assisting with product
designs based on what you see on the factory floor and the data that your
robots generate.

During lunch, you swing by a local fast-food restaurant. You watch as your
meal is prepared and cooked exactly the way you like it by a robot. Back at
your desk, you see service robots making deliveries and cleaning the floors
and windows. Outside, robots pick up trash and replace broken street lights.

In a world of advanced robotics, surgeons are assisted by miniature robotic

surgery systems, greatly reducing both the time necessary for procedures
and their invasiveness. Recovery is more rapid as well. People suffering from
paralysis due to spinal injuries are able to walk again with the help of robotic
exoskeletons directly connected to the nervous system.

DEFINITION
Traditional robots excel at tasks that require superhuman speed, strength,
stamina, or precision in a controlled environment (robot welding or semiconductor
fabrication, for example). They are bolted in place behind railings to prevent
injuries to humans. They do exactly what they are programmed to do—and
nothing more. But now, a new generation of more sophisticated robots is
becoming commercially available. These advanced robots have greater mobility,
dexterity, flexibility, and adaptability, as well as the ability to learn from and
interact with humans, greatly expanding their range of potential applications. They
have high-definition machine vision and advanced image recognition software
that allows them to position objects precisely for delicate operations and to
discern a part in a pile. They are powered by sophisticated motors and actuators,
allowing them to move faster and more precisely, and some are made from lighter,
softer materials. The US Defense Advanced Research Projects Agency (DARPA)
is even working on robots that can fully automate the sewing of garments, using
a process that tracks the movement of individual threads and precisely moves
fabric to perform exact stitching.64

64 Katie Drummond, “Clothes will sew themselves in DARPA’s sweat-free sweatshops,” Wired,
June 8, 2012.
70

Advances in artificial intelligence, combined with improved sensors, are making it

possible for robots to make complex judgments and learn how to execute tasks
on their own, enabling them to manage well in uncertain or fluid situations. By
2025 advanced robots could be capable of producing goods with higher quality
and reliability by catching and correcting their own mistakes and those of other
robots or humans. These robots can sense and quickly react to obstacles, other
robots, or human coworkers, giving them greater “awareness” and making it
possible for them to work more safely side-by-side with humans. Many advanced
robots can also communicate with one another and work together on shared
tasks. Some advanced robots are designed to be simple, small, and inexpensive,
while having the ability to be networked together and work in teams. These
distributed, or “swarm,” robots could eventually be used for dangerous tasks such
as search and rescue operations.

Finally, advances in interfaces, sensors (including sophisticated tactile sensors),

and actuators, combined with improved materials and ergonomic designs, are
furthering robotic surgery and dramatically improving the quality and usefulness
of human prosthetic devices. Ultraprecise surgical robots are making new
forms of minimally invasive surgery possible that can reduce postsurgical
complications, enable faster recovery, and possibly reduce surgical death rates.
Robotic prosthetics and exoskeletons are able to take precise directions and
make increasingly accurate and delicate movements. New interfaces have been
developed that can operate robotic limbs using small electrical signals produced
when muscles contract or using signals from nerve endings or even brain waves.
The capabilities of these prosthetics may soon come to rival or exceed those of
actual human limbs. These advances could eventually include prosthetic hands
with independently moving fingers and prosthetic body parts that mimic the sense
of touch using a neural interface.65

These technological advances, combined with declining costs, are making entirely
new uses for robots possible. For example, El Dulze, a Spanish food processor,
now uses highly agile robots to gently pick up heads of lettuce from a conveyor
belt, measure their density (rejecting heads that don’t meet company standards),
and replace them on the belt, where other robots position the heads for a
machine that removes their roots. The company says the robots are better than
humans at assessing lettuce quality (the reject rate has fallen from 20 percent to
5 percent), and hygiene at the facility has also improved.66

POTENTIAL FOR ACCELERATION

Adoption rates for advanced robots will be determined by many factors, including
labor market conditions. For example, in China, where wages and living standards
are rising, workers are pressing for better working conditions, including relief
from long hours of precise piecework that can lead to repetitive stress injuries.
As education levels rise, fewer workers are willing to take such jobs. As a result,
Foxconn, a contract manufacturer that employs 1.2 million workers, is investing
in robots to assemble products such as the Apple iPhone.67 According to the
International Federation of Robotics (a major robotics industry group), China is
expected to become the world’s largest consumer of industrial robots by 2014.

65 Megan Scudellari, “Missing touch,” The Scientist, September 1, 2012.

66 68 robots perform farmer’s work, case study of Fanuc Robotics Europe S.A., International
Federation of Robotics, September 2012.
67 John Markoff, “Skilled work, without the worker,” The New York Times, August 18, 2012.
McKinsey Global Institute
Disruptive technologies: Advances that will transform life, business, and the global economy 71

Global manufacturing labor costs today are $6 trillion annually, so additional

automation represents a huge opportunity.

Demographics will also play a role in determining demand for advanced

robotics. Robotic surgical systems and prosthetics could help meet the large
and growing need (particularly in advanced, aging economies) to provide quality
health care. And many manufacturers still rely on legions of low-skill workers
(often in developing countries) to do work that involves precise operations on
irregular objects, such as bending tiny wires to assemble mobile phones or
deboning chicken breasts; over the coming decade, many of these tasks could
be automated.

New applications for advanced robotics, particularly in services, are also

emerging. Robots are now poised to take on dirty, dangerous, and labor-intensive
service work, such as inspecting and cleaning underground pipes, cleaning office
buildings, or collecting trash. Domestic service robots are another expanding
market. Though robotic vacuum cleaners have been around for years, sales
of these and similar household robots are now growing rapidly, by about 15 to
20 percent annually. Adoption could accelerate even further by 2025 as these
machines become more capable and consumers consider the trade-offs between
buying robots, sacrificing leisure time, or hiring professional cleaners or gardeners
to perform these tasks.

Advanced robots are also of great interest to military planners, who see
opportunities to both automate combat (similar to remotely piloted drone aircraft)
and support human troops. DARPA is investing in a range of advanced robotics
programs, from a full robotics “challenge” (similar to the DARPA Grand Challenge
that pioneered self-driving cars) to four-legged robots for carrying supplies,
robotic exoskeletons and suits to strengthen and protect troops, and advanced
prosthetic limbs to help injured soldiers. This type of military investment could
greatly speed further advancement.

Robot prices are dropping, placing them within reach of more users. Industrial
robots with features such as machine vision and high-precision dexterity
typically cost $100,000 to $150,000. By 2025, it is possible that very advanced
robots with a high level of machine intelligence and other capabilities could
be available for $50,000 to $75,000 or less. In recent decades, robot prices
have fallen about 10 percent annually (adjusted for quality improvements)
and may decline at a similar or faster rate through 2025.68 Accelerated price
declines could be made possible by scale efficiencies in robot production (due
in large part to rising demand by Chinese and other Asian manufacturers), the
decreasing cost of advanced sensors (partly driven by demand for inexpensive
sensors in smartphones and tablets), and by the rapidly increasing performance
of computers and software. Some entrepreneurs are focusing on developing
inexpensive general purpose robots that can be easily trained to do simple tasks
(see Box 8, “Your new coworker, Baxter”).

The rate at which robots could proliferate is a subject of intense debate.

According to the International Federation of Robotics, industrial robot sales
reached a record 166,000 units in 2011, a 40 percent jump over 2010; sales in
China grew by more than 50 percent in 2011. Since 1995 global sales have grown
by 6.7 percent per year on average. It is possible that there could be even faster

68 World robotics 2012, International Federation of Robotics, August 30, 2012.

72

growth ahead if Baxter and other low-priced, general-purpose models can drive
rapid adoption in simple manufacturing and service work. At the same time,
installations of advanced industrial robots could accelerate beyond historic rates if
robotics technology continues to accelerate. Adoption scenarios will depend both
on improvements in capability and price and receptivity to automation; in addition,
significant organizational and societal barriers may stand in the way.

Box 8. Your new coworker, Baxter

To make robots useful in low-end manufacturing, they not only have to be
priced attractively, but they also need to fit into the workplace. They can’t
take up too much space, they have to work well and safely with humans,
and they have to be easy to program. These were some of the goals for
“Baxter,” a $22,000 general-purpose robot developed by startup company
Rethink Robotics. Another goal was to put a friendly face on robots—literally.
Baxter features an LCD display screen mounted on a “neck” above its
body. The screen shows a pair of eyes that take on different expressions
depending on the situation. The eyes follow what the robot’s two arms are
doing, as a human worker would.

While Baxter’s functionality is somewhat limited—it is best at performing

simple operations such as picking up objects, moving them, and putting
them down—it makes up for these limitations with superior adaptability and
modularity created by the ability to install different standard attachments on
its arms. When the robot is first installed or needs a new routine, it “learns”
without the need for programming. A human simply guides the robot
arms through the motions that will be needed for the task, which Baxter
memorizes. It even nods its “head” to indicate that it has understood its
new instructions.

POTENTIAL ECONOMIC IMPACT

We estimate that by 2025 advanced robotics could have a worldwide economic
impact of $1.7 trillion to $4.5 trillion annually across the applications we have sized
(Exhibit 7). Much of this impact—$800 billion to $2.6 trillion—could come from
improving and extending people’s lives. An additional $700 billion to $1.4 trillion
could arise from automating manufacturing and commercial service tasks. We
estimate that the use of advanced robots for industrial and service tasks could
take on work in 2025 that could be equivalent to the output of 40 million to
75 million full-time equivalents (FTEs). This could potentially have annual economic
impact of $600 billion to $1.2 trillion in developed countries and $100 billion to
$200 billion in developing economies. Finally, $200 billion to $500 billion in impact
could arise from the use of time-saving household service robots.
McKinsey Global Institute
Disruptive technologies: Advances that will transform life, business, and the global economy 73

Exhibit 7
Sized applications of advanced robotics could have direct
economic impact of $1.7 trillion to $4.5 trillion per year in 2025
Potential economic
impact of sized
Sized applications in 2025 Estimated scope Estimated potential Potential productivity
applications $ trillion, annually in 2025 reach in 2025 or value gains in 2025

Robotic ’ 50 million amputees and ’ 5–10% of amputees ’ $240,000–390,000 per

0.6– people with impaired and people with person for extended/
human
2.0 mobility in advanced impaired mobility in improved quality of
augmentation
economies advanced economies life1

’ 355 million applicable ’ 30–60 million FTEs of ’ 75% potential

Industrial 0.6–
industrial workers work potentially improvement in
robots 1.2
automatable across productivity per unit of
key job types work automated

Surgical 0.2– ’ 200 million major ’ 5–15% of major ’ 60,000–180,000 lives

robots 0.6 surgeries in countries with surgeries in countries saved per year
developed health care with developed health- ’ 50% reduction in sick
care systems and inpatient days
Personal
0.2– ’ 90–115 billion hours spent ’ 25–50% of households ’ 20–50 billion hours
and home
0.5 on tasks such as cleaning in advanced saved per year
robots
and lawn care per year in economies ’ $10 value per hour of
advanced economies time saved
Commercial 0.1–
service robots 0.2
’ 130 million applicable ’ 10–15 million FTEs of ’ 35–55% potential
service workers work potentially improvement in
automatable across productivity per unit of
Other key job types work automated
potential
applications
(not sized)
Sum of sized
potential 1.7–
economic 4.5
impacts

1 Using QALY (quality-adjusted life years) estimates.

NOTE: Estimates of potential economic impact are for some applications only and are not comprehensive estimates of total
potential impact. Estimates include consumer surplus and cannot be related to potential company revenue, market size,
or GDP impact. We do not size possible surplus shifts among companies and industries, or between companies and
consumers. These estimates are not risk- or probability-adjusted. Numbers may not sum due to rounding.
SOURCE: McKinsey Global Institute analysis

Health care
We estimated the potential economic impact of robotic surgery and robotic
prosthetics to be as much as $800 billion to $2.6 trillion annually by 2025,
based on saving lives and improving quality of life. For estimating the potential
economic impact of robotics for human augmentation, we considered potential
uses of robotic prosthetics and exoskeletons.69 By 2025 there could be more
than 50 million people with impaired mobility in the developed world, including
amputees and elderly people, for whom robotic devices could restore mobility,
improve quality of life, and increase lifespan. It is possible that 5 to 10 percent
of these people could have access to robotic augmentation by 2025 given the
current penetration of alternatives such as traditional prosthetics and motorized
wheelchairs. Studies indicate that impaired mobility contributes significantly
to reduced life expectancy due to increased health risks such as injury and
osteoporosis.70

If it were possible to extend life by one to two years for each disabled person and
provide a 20 to 30 percent improvement in quality of life over eight years using

69 Robotic mechanisms that can be worn by physically handicapped people to help move limbs
(or even entire bodies).
70 For more on the effects of disabilities on life expectancy, see R. Thomas and M. Barnes, “Life
expectancy for people with disabilities,” NeuroRehabilitation, May 2007.
74

robotic assistance (assuming substantial restoration of normal function) the result

could be a potential impact of $240,000 to $390,000 per person, using a quality-
adjusted life year (QALY) approach. If these results can be achieved, robotics for
human augmentation could lead to a potential economic impact of $600 billion to
$2 trillion per year by 2025, much of which could be consumer surplus accruing
to the users of these robotic devices.

As the technology for robotic surgery improves, it could have the potential to
prevent deaths and significantly reduce both in-patient care time and missed work
days. Robotic surgical “platforms” are already being used for minimally invasive
procedures such as laparoscopic surgery. It is possible that with advances in
robotic technology, by 2025 robotic surgery could be widely used for these
and other procedures. Approximately 200 million major surgeries could be
performed every year in countries with developed health-care systems in 2025.71
Currently, about 3 percent of all major surgeries result in death, but it is possible
that by 2025, advanced robotic surgical systems could help reduce these
deaths substantially, perhaps by as much as 20 percent, by reducing common
complications such as bleeding or internal bruising.

This improvement in outcomes could be enabled by more flexible surgical robots

with a greater range of motion that could perform more types of operations,
or from new features such as AI-assisted autocorrect systems that could warn
surgeons when they are about to cut the wrong tissue or apply too much
pressure. Declining costs in robotic surgery systems could allow more hospitals
and surgeons to use the technology, potentially increasing the performance
of many surgeons. We estimate that if 5 to 15 percent of all major surgeries
in countries with developed health-care systems could be performed with the
assistance of robots by 2025, it could result in 60,000 to 180,000 lives saved
each year. Robot-assisted surgery could also cut in-patient stays and sick days
associated with surgery by 50 percent. If these results can be achieved, we
estimate that robotic surgery could have an economic impact of $200 billion to
$600 billion per year by 2025.72

Industrial robots
For industrial robots, we analyzed data regarding job tasks, occupations, and
distribution across countries.73 We then considered which tasks could be fully
or partially automated economically by advanced robots by 2025, assuming a
high level of robot performance and continued reductions in cost. In developed
countries, across occupations such as manufacturing, packing, construction,
maintenance, and agriculture, we estimate that 15 to 25 percent of industrial
worker tasks could be automated cost-effectively (based on estimated 2025
wage rates) by 2025. We estimate that in developing countries, on average, 5 to
15 percent of manufacturing worker tasks could be automated across relevant
occupations by 2025.

71 Based on analysis by Thomas G. Weiser et al., “An estimation of the global volume of surgery:
A modeling strategy based on available data,” Lancet, volume 372, number 9633, July
12, 2008.
72 We use a quality-adjusted life year (QALY) of $100,000 and assume that surgical patients
avoiding death are restored to a normal life expectancy.
73 Analysis of job occupations and tasks is based on data from a variety of sources, including
labor and wage data from the Economist Intelligence Unit, International Labour Organisation,
IHS Global Insight, Eurostat, and various national labor bureaus.
McKinsey Global Institute
Disruptive technologies: Advances that will transform life, business, and the global economy 75

We calculated the potential cost savings using the estimated annual cost of
advanced robots compared with the annual employment cost of an equivalent
number of workers. This yields a potential economic impact of $600 billion to
$1.2 trillion per year by 2025. This would imply a substantial increase in the
number of industrial robots installed globally by 2025, by about 15 million to
25 million robots, requiring investments totaling about $900 billion to $1.2 trillion.
Realizing all of this potential impact would therefore imply 25 to 30 percent
average annual growth in robot sales, significantly higher than the average growth
rate over the past two decades, but lower than the growth rate in 2010 and 2011.

Service robots
Service robots fall into two categories: those used in commercial settings and
personal robots. For personal and household service robots, we focused on
the potential to automate cleaning and domestic tasks such as vacuuming,
mopping, lawn mowing, and gutter cleaning. The use of advanced robots for
these types of tasks has significant potential given the current trajectory of
technology improvement, the relatively low cost of the robots required, and the
already increasing rate of adoption. Sales of household robots used largely for
the above-mentioned tasks are already growing by about 20 percent annually. To
estimate the potential impact of household robots, we considered the amount of
time spent on relevant cleaning and domestic tasks, focusing on the developed
world, where significant adoption is most likely. Based on US and European
labor studies, we estimate that 90 billion to 115 billion hours per year are spent
performing relevant household tasks in the developed world.74 If 25 to 50 percent
of people in the developed world were to adopt the use of these robots by 2025,
$200 billion to $500 billion worth of time savings could be realized. We believe
this level of adoption is possible given the rapid advances in low-cost robotics
technology, the relatively limited sophistication of the robots required for these
applications, and the demonstrated willingness of many consumers to pay for
household time-saving devices.

For commercial service robots, we analyzed data on job tasks, occupations, and
distribution across countries.75 We then considered which tasks could be fully or
partially automated economically by advanced robots by 2025, assuming a high
level of robot performance and continued reductions in cost. We estimate that in
developed economies, across occupations such as food preparation, health care,
commercial cleaning, and elder care, as much as 7 to 12 percent of commercial
service worker tasks could be automated cost-effectively by 2025. For example,
nurses spend up to 20 percent of their shift time wheeling equipment and carts
from one location to another or waiting for a cart to arrive. So-called courier
robots (self-guided, motorized carts) can take on these tasks. We estimate that
in developing countries, 4 to 8 percent of commercial service worker tasks could
be automated across relevant occupations by 2025. To achieve this, we estimate
that 2.5 million to eight million advanced robots would be necessary, requiring an
estimated investment of $200 billion to $400 billion globally by 2025.

74 Estimates based on data from Rachel Krantz-Kent, “Measuring time spent in unpaid
household work: Results from the American time use survey,” Monthly Labor Review, volume
132, number 7, July 2009.
75 Analysis of job occupations and tasks based on data from a variety of sources, including
labor and wage data from the Economist Intelligence Unit, International Labour Organisation,
IHS Global Insight, Eurostat, and various national labor bureaus.
76

BARRIERS AND ENABLERS

There are several important barriers that could limit adoption of advanced
robotics by 2025. First, although costs are declining, most industrial and many
commercial service robots remain expensive, costing tens or hundreds of
thousands of dollars per robot. Surgical robots often cost more than $1 million
(although these costs could come down and few of these might be needed
compared with industrial and service robots). Large-scale adoption of industrial
and service robots could require investments of perhaps $1.1 trillion to $1.6 trillion
by 2025. Before making these investments, companies would likely require strong
evidence of positive returns on investment, and establishing a clear track record
of performance could take years. And once robots are purchased and installed,
it can still take time to redesign processes and flows to fully take advantage of
their capabilities.

Surgical robots have already seen significant growth in adoption, but additional
trials and data will be required to fully demonstrate their benefits, particularly
given concerns about health-care costs in the United States and other advanced
economies. There are also questions about whether robotically assisted surgery
has demonstrated significantly better performance than nonrobotic minimally
invasive surgery techniques, which are less costly. While the capabilities and
performance of the technology could improve significantly by 2025, adoption may
be constrained until definitive proof of results is available.

The talent required to operate and maintain advanced robots is an important

enabler that will be required to fully capture their potential. Some advanced robots
could be designed to be very user-friendly and able to work naturally side-by-side
with humans, but advanced robots may still require a high level of expertise to
maintain their hardware and software.

Finally, the potential effect of advanced robots on employment could generate

social and political resistance, particularly if robots are perceived as destroying
more jobs than they create. Although the productivity improvements that
advanced robots would create would drive growth in the economy, the workers
who would be displaced might not be easily re-employed. Policies discouraging
adoption of advanced robots—for example, by protecting manual worker jobs
or levying taxes on robots—could limit their potential economic impact. Policy
makers will face difficult questions regarding legal liability, such as determining
who is at fault when service or household robots contribute to accidents
or injuries.

IMPLICATIONS
Over the coming decade, advanced robotics could deliver tremendous value
for robot creators, health-care providers, manufacturers, service providers,
entrepreneurs, consumers, and societies. For many businesses, advanced
robotics promises significantly reduced labor costs, greater flexibility, and
reduced time to deliver products to the marketplace. Business leaders should
look for opportunities to leverage growing technology capabilities to help
automate difficult, labor-intensive, and dangerous tasks in ways that are simple,
user-friendly, and cost-effective, whether for treating patients or automating
manual work.
McKinsey Global Institute
Disruptive technologies: Advances that will transform life, business, and the global economy 77

For hospitals and health-care providers, advanced robotics could ultimately offer
substantial improvements in patient care and outcomes. As a result, providers
of robotic systems and supporting tools or services could see large growth
opportunities over the coming decade. Makers of robotic surgical systems could
see strong demand for increasingly advanced systems but also feel pressure to
minimize costs and clearly demonstrate improved outcomes for patients. Makers
of robotic prosthetics and exoskeletons could experience similarly high demand
and may want to look for ways to reach disabled and elderly people around the
world, even in less-developed regions.

Manufacturing and service companies with large workforces could benefit from
reduced costs, reduced injuries, and lower overhead, as well as reducing payrolls
in human resources, labor relations, and factory supervisory roles. Factories
might no longer need to be located near sources of low-cost labor, allowing them
to be located closer to final assembly and consumers, simplifying supply chains
and reducing warehousing and transportation costs.

However, business leaders will face challenges in capturing the full productivity
and quality improvements that could be afforded by advanced robots. Advanced
robotics requires substantial capital investments, and businesses will need
clear evidence of positive return on investment. Reconfiguring manufacturing
processes, service delivery channels, and supply chains is difficult and
time-consuming. Training employees to work effectively alongside robots is also
no small task. To maximize value capture and stay ahead of the curve, businesses
should continually experiment with advanced robotics and additional automation,
identify promising technologies, rethink business processes, and develop in-
house talent. They should also consider how their supply chains could be
redesigned to leverage automation, and how additional speed to market, flexibility,
and quality could help differentiate their offerings from those of competitors.

For some entrepreneurs, decreasing robot cost and increasing capabilities could
make entirely new business models possible or decrease barriers to entry in the
manufacturing and service industries. Robotically enabled production facilities,
fast-food restaurants, self-service laundries, and medical clinics might offer
superior efficiency and quality and could scale quickly. Established manufacturers
may need to accelerate automation to meet the competition while investing in
innovative product development or superior service quality to better differentiate
their offerings.

For societies and policy makers, the prospect of increasingly capable robots
brings potential benefits: growing national productivity, higher-quality goods, safer
surgeries, and better quality of life for the elderly and disabled. But it also poses
new challenges in employment, education, and skill training. In some cases,
access to advanced robotics could cause companies to repatriate manufacturing
operations from low-wage offshore locations. And the spread of robotics could
create new high-skill employment opportunities. But the larger effect could be to
redefine or eliminate jobs. By 2025, tens of millions of jobs in both developing and
advanced economies could be affected. Many of these employees could require
economic assistance and retraining. Part of the solution will be to place even
more emphasis on educating workers in high-skill, high-value fields such as math,
science, and engineering.