Ready for robots

This dynamic, however, will increasingly undermine a cornerstone of the country’s economic success – access to a seemingly limitless pool of cheap manual labour.

A more expensive workforce will erode one of the pillars of China’s competitive advantage. One response is for manufacturers to set up elsewhere, such as in Southeast Asia, another is to introduce more industrial robots on factory floors. 

Using robotics in manufacturing to reduce labour costs is a growing trend and already well advanced in countries such as the United States and Japan. Although China’s homegrown robotics industry is still in a fledgling state, with production costs remaining comparatively high, robotized or automated production is certain to become a more significant part of the country’s manufacturing industry.

Last August, Hon Hai Precision Industry, the world’s largest manufacturer and assembler of electronic components, announced plans to start replacing its workers with robots. Over the next five years some 500,000 robots will be introduced into the workplace, with much of the activity taking place at the company’s subsidiary Foxconn. Already about one-fifth of China’s existing 50,000 robots are installed in Foxconn factories and the planned new investment will double the current world robot population, according to statistics from the International Federation of Robotics (IFR). 

Global robot sales reached record levels in 2011, rising 130 percent year-on-year to about 150,000 units. China is seen as one of the most dynamic markets and is set to become the most highly robotized economy within 2014. 

Such a transformational step in Chinese production will also provide Thailand with a significant opportunity to move up the skill chain. Thailand has consistently punched above its weight in robotics development, with teams from Thai universities winning a number of international and regional competitions such as the A.N.T.Z. Robotics Competition World Challenge, RoboCup Rescue and Robocon. A key question is what can these highly-skilled students do upon graduation? While the kingdom is proving its technical prowess in matters relating to robotics, demand from Thai manufacturers is currently insufficient to drive significant growth in the local robotics industry. Sound employment opportunities will be a key catalyst if the local sector is to take off.

Developments in China, however, may provide that catalyst. Thai engineers can put their expertise to work in a market that is soon set to lead the world with the deployment of robots in the workplace. It is also worth mentioning that the IFR considers Asean to be one of the leading global growth markets for robots, after China. Given that Thailand will face steep competition from other Southeast Asian nations with lower labour costs, such as Indonesia and Vietnam, Thailand must prove now that it is ready for robots.

Clearly the government would need to put policies in place to ensure the current shop floor employees aren’t left to fend for themselves, but rising labor costs not only indicate better living standards, they also demonstrate that Thailand is ready to move up the value-chain in terms of enhancing the capacity of its workforce. 

 

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