Plugging the chaos as the robots swirl
In mid-July, one of the country’s biggest hardware supply chain platforms IngDan announced its plan to launch a robotic innovation ecosystem with software giant Intel, aiming to attract 1,000 robotics startups and create 10 star enterprises within three years.
Interest in robotics among big companies and innovators around the world is growing, as the emerging industry penetrates more and more sectors, bringing significant changes to the way people work and live.
However, industry insiders say a large number of market players are just producing similar things, resulting in a waste of resources. Some even enter the market with the immoral purpose of benefiting from government funds used to support devel- opment of the industry.
Robotics firms in the country are competing fiercely against each other, but many of them are just following the footsteps of others and making repeated development, leading to a waste of resources, says Zhang Jingbing, research director of global robotics industry at IDC.
“They don’t know how to cooperate with each other by taking advantage of the whole ecosystem,” Zhang groans. “We need to avoid homogenization of the industry.”
He points out that Chinese companies still lag behind in mastering core technologies of robotics, for example, the retarder, a key component of robots, which still monopolizes the market in Japan. Last year, roughly 75 percent of retarders used in robots were imported from Japan.
Luo Jun, executive president of the International Robotics and Intelligent Equipment Industry Alliance, says some robotics companies do not even have factories and equip- ment, and are just providing processing services. Without core technologies, he argues, Chinese players, which are less competitive in the world’s robotics market, face the serious threat of being marginalized or even flushed out of the market.
Despite the current situation, it’s undeniable that China has made big strides in developing the industry. According to market intelligence firm IDC, the mainland owned just less than 1 percent of the world’s total robot-related patents in 2000, compared with 56 percent for Japan. But, by 2011, China’s percentage had gone up to 25 percent, while Japan’s had slipped to 21 percent.
The robotics industr y is experiencing considerable growth globally and domestically. According to the International Federation of Robotics, 248,000 industrial robots were sold worldwide last year — a 12-percent year-on-year growth. IDC had forecast in February that global spending on robotics and related services would grow at a compound annual growth rate of 17 percent from more than $71 billion last year to $135.4 billion by 2019.
In China, sales of industrial robots reached 67,000 units in 2015 — up 17 percent over the previous year. The country, which has been the world’s largest robotics market for three years, aims to reach an annual industrial robot output of 100,000 units and reap 30 billion yuan ($4.5 billion) from sales of service robots by 2020.
To achieve that aim, mainland authorities have been
(Robotics firms in the country) don’t know how to cooperate with each other by taking advantage of the whole ecosystem ... We need to avoid homogenization of the industry.”
research director of global robotics industry at IDC
investing massively in the industry by offering subsidies to robotics companies. However, the incentives have also triggered chaos in the industry.
Some enterprises have tried various methods to win more government aid. A report by The Economic Observer said some people have registered different companies to secure subsidies numerous times although such aid is only meant for a company’s first
billion
innovative robot. By registering multiple companies, they can apply for subsidies many times.
According to Zou Sheng, an inspector with the Economic and Information Commission of Guangdong Province, more than 10,000 enterprises in the province had labeled themselves as robotics companies in a recent survey. But, it was found that only 159 of them were, in fact, in the business.
While industr y insiders acknowledge that a “bubble” has emerged in the robotics industry as a growing number of players aim for a piece of the pie in the rapidly developing industry with intensive support from the government, they remain upbeat about its prospects.
Dexon Li, general manager of strategic cooperation and innovative business at Intel China, believes there’s no need to worry too much about the current situation as “it is normal” in the process of development.
“When a new industr y emerges and develops, it’s normal that a bubble and chaos occur as a large number of market players want to take advantage of the opportunities to make something big,” he says.
“However, the market will eventually ensure that the industry develops in an orderly and healthy manner. Those who are not efficient or competent enough will be ejected in the long term.”
The mainland authorities are also making effor ts to regulate the robotics industry by introducing policies. The Ministry of Industry and Information Technology said earlier this month it’s formulating development regulations for the industry and gathering opinions from experts and enterprises.
increase in the number of industrial robots sold in China last year from a year ago estimated value of China’s sales of industrial robots by 2020