SoloPoint Insights

How Robots Could Trigger a Decline in Profit

Robots are popping up everywhere, driving new tech projects and innovation. Companies, from startups to giants, are starting to adopt this modern automation. But there’s a twist: brace for a decline in your profit. New research reveals robots might trigger a brief financial loss… initially.

Research from the University of Cambridge found that as companies adopt robots, their profits often follow a U-shaped trend – declining at first on low levels of adoption, before eventually rising again at higher levels of adoption. Here’s how robots could trigger an initial profit decline:

Despite causing an initial dip in profits, robots are still dominating the tech market worldwide. In 2021, global service robots surged by 300 thousand to a total of 3.6 million units, and industrial robots were recorded an all-time high use, with around half a million units installed in factories worldwide. By 2023, their market value exceeded triple that of industrial robots. 

Example: Chipotle partnered with a tech company, Hyphen, to test a robotic makeline along with a new robotic grill, aiming to boost its restaurants’ productivity.

Why do companies use robots? Companies integrate robots mainly to reduce costs by addressing labor shortages and streamlining processes. 

But if a company is at a lower profit margin on a lower level of robot adoption, how can robotics be utilized to become profitable again?

To find highly skilled Mechanical, Electrical, and Manufacturing engineers to help you adjust to technology advancements and robot integrations, call the talent experts at Solopoint Solutions today:

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