Rising Energy Costs Are Driving Demand In Automation & Robotics

A recent report from sifted.eu describes how the increase in energy prices and cost of living are seeing investors turn to automation, but while the article goes into great depth regarding the investors and technology, it doesn’t quite describe how exactly automation saves money. What challenges does the market currently face, how does automation really save money, and is it moral?

What challenges does the market currently face?

There is no shortage of fear in the media, whether it is the rising interest rates, rising inflation, stagnant wages, and instability in governments that cannot agree on a simple tax plan for the next four years. At the same time, the Ukraine-Russo war is showing no signs of stopping, and China continues to eye Taiwan (if Xi Jinping is anything like Vladimir Putin, he very well may try to take Taiwan as his crowning achievement before he leaves this life). So, with all of this going on, it’s no wonder why everyone has been struggling to some degree, and engineers in the electronics industry have certainly felt the pain of falling markets and supply chain challenges.

With regard to the electronics industry, the semiconductor supply shortage is still a major issue that may persist well into 2024, and this is making it difficult for engineers to design new products and secure sources of components to guarantee production. The increasing trade restrictions on China by the US are also causing engineers difficulties as not only are parts becoming more difficult to source, but the US has even started to interfere with the decision of engineers at major tech companies. For example, Apple recently decided to backtrack on its planned use of Chinese-sourced memory chips in its next generation of devices after the US practically threatened them not to. 

The ongoing energy crisis is also giving engineers and industrial sites numerous headaches, especially in the field of manufacturing. The rising cost of electricity means that factories have to pay significantly more bills while being unable to change internal environmental conditions, whether to maintain a comfortable climate for employees or to maintain the quality of equipment and produced goods. Overall, everyone at every level feels the current global situation to some degree, and manufacturers are desperately looking for alternative solutions.

How does automation really reduce the costs faced by manufacturers?

A recent report from sifted.eu describes how the increase in energy prices and cost of living are seeing investors turn to automation, but while the article goes into great depth regarding the investors and technology, it doesn’t quite describe how exactly automation saves money. Fortunately, we will cover exactly how automation saves money right here at Electropages (or at least the most important factors).

The most obvious reason for adopting automation is to reduce staff wages. It doesn’t matter if a robot is ten times slower than a human because having ten robots performing the same task will result in the same labour capabilities as a single human. Furthermore, these robots only require electricity to run and the occasional repair, which does see the need for an on-site engineer. However, in reality, robots often complete tasks far quicker and more consistently than their human counterparts, making them highly profitable if used correctly. 

The second reason why automation and robots can help reduce the cost faced by manufacturers is through environmental controls. Unless a product or process requires strict environmental conditions, then it is possible for a manufacturer to outright disable environmental controls such as heating and AC. Furthermore, industrial sites and warehouses can have all lights turned off (as many robotic systems rely on non-vision systems), which further reduces energy bills. 

Thirdly, as automation systems and robotics can easily be connected across large networks, they can also be intelligently driven by AI and predictive supply and demand analysis. Therefore, systems can be shut down when not needed (further saving energy bills), while orders for parts can be tailored live (this creates a just-in-time production model).

Finally, internet-enabled technologies also allow for robotics and automated systems to be adjusted and updated remotely, which not only reduces downtime but also reduces the complexities involved with large changes. There are numerous other reasons why automation can reduce costs, but the factors mentioned above are by far some of the most significant.

Is the shift towards automation moral?

As global markets struggle and the cost of living makes everyday expenses difficult, it is important for everyone to identify cost-saving solutions that can help ease their respective financial situation. The same applies to companies, and as much as people need jobs and cheap products, companies are not charities. 

However, the mass introduction of automation, robotics, and AI does raise some serious ethical questions, especially during times of financial trouble. The shift towards automation will undoubtedly help manufacturers save money, but this is entirely at the cost of reduced staff and, therefore, employment opportunities. 

While this approach may help reduce costs initially, the widespread practice of using automation may negatively affect the economy overall. Jobs in the manufacturing sector of the UK make up around 10% of total employment, and these jobs are often low-skill labour. If these jobs were to be axed through automation (unlikely, but not impossible), then a large proportion of the UK’s workforce would need to find new jobs. 

Such a dramatic shift in employment would present serious difficulties as those working in the manufacturing sector would not have transferable skills without the need for retraining and education. The result would likely be the need for large-scale government support programs to provide funds to those who have lost their job to automation. Simultaneously, the lost income through tax collection also worsens the government’s position in supporting those laid off due to automation, which could trigger the government to introduce legislation that either attacks automation or taxes it.

Overall, robotics and automation may seem like excellent ideas to save money, but while this may be true for the short-term, it may be disastrous if deployed at scale. Finally, just because a business’s primary function is to generate profit doesn’t mean it has to be at the cost of staff and employment opportunities.