The european robotics industry fights back

Asia’s acquisition of two of the continent’s crown jewels came as a wake-up call. To stay competitive, Europe must innovate.

BY Julien Calligaro
1 July 2017
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Europe is the second-largest manufacturer of robots, after Asia and before North America. In 2015, it sold more than 50,000 industrial robots, a 10% increase from the previous year. The continent benefits from a long tradition of manufacturing automated systems, represented by such venerable companies as Germany’s Kuka, France’s Aldebaran and Switzerland’s ABB and Stäubli.

This expertise, however, is increasingly coveted by foreign companies, as evidenced by recent acquisitions. In 2015, Japan’s SoftBank acquired a 95% stake in Aldebaran. In 2016, Chinese company Midea, which makes household appliances and air conditioners, bought a majority stake in Kuka. “The acquisition of Kuka significantly changes the structure of the robotics market, in that Asia benefits considerably at the expense of Europe”, says Morten Paulsen, a Danish financial analyst at the brokerage firm CLSA Japan. “Since the development of the first robots in the 1960s, the market had been dominated by two European companies (ABB and Kuka) and two Japanese companies (Fanuc and Yaskawa).”

“To be competitive on the international market, Europe must rely on its innovation potential”, says Nils Axel Andersen, associate professor at the Technical University of Denmark (DTU). Andersen believes that the upcoming robotics “revolution” will not occur among the traditional companies. “Their business is profitable, but they don’t want to risk lowering the price of their products.” As a counterexample, Andersen suggests Universal Robots, a Danish company that produces collaborative robots called cobots. “These machines are less imposing, more flexible and a lot less expensive”, he explains. “They work with humans, not for them. Setting them up is also less complicated.” Universal Robots claims to have a 60% share of the cobot market.

LBR iiwa, by Kuka

A crucial step towards a factory without borders: the lightweight robot LBR iiwa made by the German company Kuka.

An impenetrable Chinese market

According to Andersen, the robots of the future won’t look anything like today’s. “We need to move beyond the stage of machines designed to perform the same movement over and over. We can now craft robots that adapt to their environment.” At a recent international competition in Abu Dhabi, a team from DTU presented a robot programmed to adapt to its environment, as well as communicate and coordinate its work with other devices.

Another way Europe can remain competitive is to increase cooperation among various organisations. “Collaboration between universities, companies and financial institutions is very developed in Europe”, says Paulsen. “We have a real advantage, particularly compared with Japan.” An example is the Partnership for Robotics in Europe, launched in 2014 by the European Commission, together with the private sector and academia. It aims to help European companies increase their market share in the global robotics market, notably through joint investments of €2.8 billion over seven years. In 2016, 17 new projects received funding from this programme.

Despite the acquisitions of Kuka and Aldebaran, Andersen remains optimistic: “Europe has a long history in developing precision mechanics. The prospects look good.” The industry agrees. “There is no indication of a technological brain drain”, says Germany’s Mechanical Engineering Industry Association. “Foreign investment is beneficial. It creates new opportunities for growth and can facilitate access to the Chinese market.” The Association calls for a “robust” agreement on investment between China and Europe, as “it is incredibly difficult for foreign companies to access the Chinese market”.