The need for robotics is growing worldwide, and Australia is no exception. As the country’s industry faces a series of labour challenges, robots and automation have come into focus as a key part of the solution.
”Australia, like most developed countries around the world, is facing significant challenges, which make automation and robotics critically important,” says David Martin, Director of Emerging Industries and Innovation at Ai Group, Australia’s largest industry association.
One issue is stagnating productivity growth – usually regarded as a key factor for economic progress and improving living standards. Since the mid-2000s, Australia’s labour productivity growth has slowed steadily, averaging just 1.2% during 2021-22 according to Australia’s National Treasury.
“Labor costs in Australia are quite high, and we don’t have many opportunities to improve productivity and be globally competitive other than technological improvements and more access to automation,” says Dr Sue Keay, Chair of Robotics Australia Group – a national association of robotics and automation companies.
Another issue is the shortage of labour. It has increased alarmingly since COVID-19, leaving many businesses without sufficient workers and looking for automation instead. This can be seen in the number of job vacancies in the manufacturing industry, which more than quadrupled from May 2020 to May 2022, and remains at more than twice the pre-pandemic levels according to data from The Australian Bureau of Statistics.
“Getting access to skilled staff is almost impossible in certain sectors. These things hurt and make automation more and more necessary,” says David Martin.
Smaller businesses need easy access to automation
While the need for automation is strong, many businesses have yet to get started on adopting robots according to both David Martin and Sue Keay. The level of robot adoption relative to employees in the Australian manufacturing industry is among the lowest of the 37 countries measured by the International Federation of Robotics. The mining industry is further ahead according to David Martin, while the construction and agriculture industries are still in the earlier stages of adoption.
Across all sectors, however, both experts agree on the overarching need to make robotics more accessible to smaller and medium-sized companies (SMEs). 68% of private sector employees in Australia work at SMEs according to data from the OECD, yet those smaller businesses are often lagging behind larger companies when it comes to adopting new technologies such as robots.
“For smaller companies, it’s difficult to have the time and innovation capability to take on new technology. So, they need the technology to be plug-and-play and simply work. And they need additional help if the technology doesn’t meet those criteria,” says Sue Keay.
The main challenge with finding such robot and automation solutions is not that they don’t exist, but that it can be difficult for especially smaller businesses to get an overview of the fast-developing market according to Søren Peters, the CEO of HowToRobot.
With a mission to make robotics easily accessible for any business – large or small – HowToRobot helps companies scope their automation needs and find matching solutions from a range of suppliers worldwide. To better support Australian businesses and bring further transparency to the market, HowToRobot recently mapped out the robotics industry in the country for the first time in collaboration with Robotics Australia Group. The efforts resulted in a report, uncovering 466 robot and automation suppliers in Australia and key insights about their solutions and the customers they serve. About one-third of the robot and automation companies were less than ten years old.
“There is an incredible and fast-increasing number of proven robotics solutions and capable providers on the market. But they are not always visible for the businesses that need them, and the solutions often need adaptation to each end-user’s needs,” says Søren Peters.
From working with many businesses that are adopting robots for the first time, one of HowToRobot’s key takeaways is that businesses often benefit from taking a structured approach to finding solutions, Søren Peters explains:
“We have seen businesses spend over a year looking for off-the-shelf solutions without luck. By instead making a selected group of providers aware of their needs in a structured way, they were able to get ideas for customised solutions to their problem in less than a month.”
Cost concerns growing during economic headwinds
While many businesses acknowledge the need for robots, the cost of investing in one is a growing concern. This is a particular issue with the currently high interest rates according to David Martin:
“One of the key challenges at the moment is finding sufficient capital to grow the business, especially for investments with longer payback periods such as those in robotics and automation,” he says.
There is, however, good news according to Sue Keay: The cost of robotics and related technologies such as sensors have dropped significantly in the last few years – and the trend seems to continue:
“Robotics is becoming cheaper and more easily accessible. While it used to be the type of technology that was only accessible to large corporations, even smaller businesses can now access it without taking risks they are uncomfortable with,” says Sue Keay.
Not all businesses are aware of this, however. An outdated view of market prices can often add unnecessarily to the cost concerns according to Søren Peters, encouraging businesses to explore their options as often as needed – and get at least a range of proposals from different suppliers to get a solid understanding of where the market is.
“The price of a robot solution today is not what it was five years ago. Getting an updated view of market rates can unlock business cases that didn’t seem feasible previously,” says Søren Peters.
The robotics industry must address business scepticism
Another barrier to adopting robotics in Australia is the limited awareness among business leaders according to David Martin.
“People at the top need to become more familiar with automation and robotics and their benefits,” he says, with Sue Keay backing up his view:
“Australian businesses are often very conservative about adopting new technology. They want to see all benefits built out before the investment,” she says, while clarifying that it’s often a challenge for conventional robot providers to address these concerns:
“It’s difficult for robotics companies to explain how their product will impact the bottom line of the end-user. That’s where advisors can be extremely useful,” she says.
Access to such advisors, however, is still limited in Australia. Advisors account for only 3% of the businesses in the Australian robotics industry according to the market overview from HowToRobot and Robotics Australia Group, spotlighting a gap in the market that needs to be addressed:
“Australia needs better access to independent facilitators, who are able to have key discussions with the board and the executives about the critical benefits of automation and robotics, its impact on the business, and how to move forward,” says David Martin.
The ability to have these types of discussions with business leaders is important not only for advisors but any robotics provider according to Søren Peters:
“Most leaders don’t care about the coolness factor of robots. They are only interested so far as they can get a solution they know will solve their most pressing business issues, for example, the lack of labour,” says Søren Peters, adding:
“The robotics providers that are able to address these issues and justify how their solution solves them also tend to win the business.”
A global outlook strengthens robot adoption
While there are many opportunities to find within Australia, a global outlook is needed for both automation end-users and suppliers according to all the industry experts.
Australia’s robotics capabilities are strong in some areas unique to the country’s economy, which can be useful for exporting technology and expertise. For example, Australia is by far the world leader in the number of robot and automation suppliers to the mining industry, followed by the US in the 2nd place and the UK and Finland tying for 3rd place according to data from HowToRobot.
However, exporting has more benefits than gaining international clients according to Sue Keay:
“Because of the scepticism of Australian businesses, they are often much keener on adopting new technology after it has been proven overseas,” she says.
The global robotics market covers more than 16,000 suppliers according to HowToRobot.
Facts about the Australian robotics industry
The types of businesses include:
- Integrators (57% of the industry)
- Manufacturers of robots and drones (19%)
- Component suppliers (15%)
- Distributors (7%)
- Advisors (3%)
Among the top industries served by most robot and automation companies are:
- Robotics (260 suppliers)
- Metal & machinery (221 suppliers)
- Logistics (195 suppliers)
- Food & beverage (142 suppliers)
- Mining (135 suppliers)
For more insights and statistics, read the full report.