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Wealth Management: Q&A

Talking robots

Advising clients on the long-term drivers of company growth requires us to look at today's trends whilst keeping an eye on those of tomorrow. Robotics, specifically the development of autonomous service robots in industrial workspaces falls firmly within this requirement.

As the CEO of one of just a handful of companies globally producing autonomous service robots, we interviewed Dr. Péter Fankhauser, at Swiss-based ANYbotics. Incubated in the research laboratories of ETH Zurich in 2016, ANYbotics commercialises the technology behind 4-legged robots – an example of which is its ANYmal C pictured above.

In this interview we explore the impact service robots are having on industrial and energy sectors and what the future holds in this rapidly developing area of science and engineering.

For the full analysis on how to invest thematically in automation & robotics, please read our latest Instant Insights and contact your client adviser.

Q1. Péter, you have a doctorate degree in robotics from ETH, Zurich and led the Ballbot Rezero ETH student project back in 2009-2010 – we've watched your TED talk on this project which you gave in Edinburgh in July 2011, what are the biggest advances which have been made in your field of robotics since then?

Hi Will, to answer this question we should first understand that the field of robotics is not new. Use of robots in a static, controlled environment such as car-factories for manufacturing purposes has been around for several decades and is already well underway to replacing heavy-duty manual labour.

What has changed significantly over the last decade is the advance in smart, autonomous service robots which is what we specialise in at ANYbotics. Service robots are those which can be taken out of a controlled environment, such as a laboratory and are able to interact with the real world. This is a critical step if we want robots to be able to move around industrial environments and take on repetitive but critical inspection and maintenance tasks.

It's been a long journey to reach the point where we feel comfortable doing this – from an engineering perspective there are huge challenges to robots interacting in everyday environments. To survive in the outside world, they must be robust, dust and waterproof whilst remaining agile and light. Enabling autonomous functionality, we needed to make big advances in the robots' environmental perception so they can understand the physical world around them, process that data and adapt their control.

Alongside this has been the development of a more sophisticated ecosystem of software tools, from perception sensors to image analysis and indoor localization tools. The entire ecosystem around robotics has matured considerably in the last decade and is making it much more attainable to develop and build effective service robots.

Q2. ANYbotics' ANYmal series has seen at least 4 iterations of its 4-legged robot since it emerged in 2015 – how competitive is the market?

The market is still in an early stage with only a handful of players. Between us our discussions remain dynamic and constructive although there is a healthy level of competition. The role of academic institutions in developing the research and know-how behind our activities is key. Academic Leaders include the likes of MIT in the US, ETH Zurich and EPFL in Switzerland, the University of Oxford and Edinburgh in the UK, CSIRO in Australia, and KAIST in South Korea. With few participants operating in this young market, no single company has gained anything like global market-share. Whilst certain markets like China have a local focus, demand for our products remains global. ANYbotics in fact sells internationally including both the US and China.

It's important to remember that robotics requires a lot of time, research and team expertise. The entry barrier for companies to build autonomous service robots – let alone commercialise them – is so high that we don't expect the market to fragment any time soon.

Q3. Looking ahead, what is the commercial rationale for autonomous service robots and what advances should we expect to see?

Service robots are pushing into new frontiers in industrial environments, where dangerous and / or repetitive "routine inspection" tasks must be carried out at present by humans. This can often be in remote locations where the cost of shipping and supporting human employees is both expensive and risky. We therefore see a strong uptake in autonomous service robots in offshore wind farms and oil & gas rigs where transportation, food and care costs are high.

Further ahead, we expect to see advances made in commercialising autonomous service robots in a broad array of sectors which are not yet fully digital and where manual labour still plays an important role.

Sectors such as chemicals, paper production, railways, mining and construction are about to being disrupted. Looking at the construction sector, current working methods are still heavily associated with manual work. Service robots are able to walk through these complex and dynamic environments and provide data for safety and progress monitoring, whilst drilling robots can interact with manual tasks. These two areas of on-site robotics represent a significant area of growth. We have also seen increased uptake in the agriculture and warehouse sector where robots are able to carry out complex picking, sorting and stacking tasks.

Q4. What should we be looking out for in terms of breakthroughs on the research side of robotics and what is the role of ETH Zurich / ANYbotics in developing this here in Switzerland?

ETH Zurich and other world-leading academic institutions are fundamental in developing the field of robotics – these institutions spawn some of the most advanced ideas which we then look to apply, commercialise and bring to market.

As complex as they may appear, modern-day robots are still quite simple. They see the world through the lens of geometry. This means that whilst humans learn from experience, robots only see through shapes. Research aimed at helping robots to better understand and navigate their surroundings will have a large impact. Today, many robots still struggle to fully comprehend their immediate surroundings, even down to distinguishing the difference between concrete and grass. We expect that advances in software – with increasingly sophisticated algorithms and deep learning – will have a profound influence on this area of robotics.

In hardware we expect in the future to be able to choose from a wider supply of providers in order to build robots. Today, we have to either build many components ourselves or live with the constraints of designing robots with off-the-shelf parts originally not intended for robotics. Once the robotics industry has the data to justify advances in applicability and scalability, this will also allow us to shrink the physical size of robotic units, much as we have seen in the evolution of mobile phones in the last two decades.

Q5. Ending with the current crisis, how has the broader robotics sector been affected by Covid-19, and secondly, what are your thoughts on robotics in healthcare and eCommerce sectors?

We were worried when the pandemic took hold that we would see cancellations from our long-standing partners, which thankfully did not materialise. The Covid-19 crisis, however, did divert some existing funding as science has focused on finding a solution to the immediate crisis. This funding will return as the crisis subsides and the necessity of robots in our supply chains and workplaces becomes ever more apparent.

Aggregate demand for robots has not suddenly grown in the face of the crisis as robotics is generally too complex for such sudden changes in consumer use. The crisis has, however, created new areas of growth for autonomous service robots, including routine hygiene and disinfection tasks as well as working in highly contagious environments. The crisis has therefore highlighted new areas of demand for the commercialisation and deployment of service robots.

Looking at the uptake of autonomous service robots in the healthcare sector, we need to remember that working with patients involves a large degree of emotional intelligence. It is no secret that people still appreciate the human touch. Robots can support with repetitive tasks in these environments, but in tandem with the more widespread provision of front-line patient care by humans. Likewise, whilst the use of robots in distribution and packing centres is now widespread in the eCommerce sector, last-yard delivery involving interaction with the public on the sidewalk and doorstep remains the proviso of humans. For now, we will focus on commercialising this growing area of robotics for industrial & energy businesses. As always when working in robotics, however, we remain excited to see what the future holds!

Zurich 29.09.2020

An interview conducted by William Haggard Salazar, Head of Investment Insights, and William Therlin, Investment Insights & Portfolio Adviser at Rothschild & Co, Wealth Management.

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