By DC Member Harald Müller*

The industry must prepare for a new era of manufacturing by humanoid AI robots that will dwarf all previous automation concepts. We are talking about a new industrial AI wave that is fundamentally changing the way manufacturing works.

The key difference between this and previous automation concepts is that the new generation of industrial robots can act autonomously and can be used in a wide range of applications thanks to artificial intelligence. We are talking about humanoids that can do everything an industrial worker can do, but can lift much heavier loads, work much faster and yet more precisely, can be used in many more applications and do not demand a wage. In addition, there are fully autonomous vehicles, from forklifts to trucks, that no longer require drivers.

AI robots are entering the industrial mid-market

Until now, industrial robots have only paid off where mind-numbing repetitive tasks had to be performed thousands or millions of times. Accordingly, each individual robot was designed for this particular task. Even the smallest changes meant that the machines had to be retooled. This meant that this old form of automation was particularly suitable for large companies with the corresponding production volumes. But the new AI robots are flexible and autonomous. Through machine learning, they can learn any new task in a matter of seconds and carry it out immediately. The new generation of AI robots will therefore be adopted on a large scale by medium-sized industrial companies in the coming years.

Practical examples: the same robot that unloads machine parts from lorries also processes them, assembles them, fetches the packaging from the warehouse, packs the finished goods, loads them for delivery to customers and sweeps the hall at the end of the shift. It may sound like science fiction today, but in just a few years it is likely to become part of everyday life in more and more companies in the manufacturing industry.

A study by the consulting firm Horváth entitled ‘Humanoid Robots in Operations’ predicts that humanoid robots could take over more than 50 per cent of manual tasks in manufacturing by 2030. In particular, they will quickly be deployed in areas such as logistics, assembly and material handling. Even if only a third of these tasks are automated, the impact on the economy and society would be significant.

Deserted factory floors ahead

In the future, there will be more and more production areas to which humans will no longer be granted access during operation. The reason: if only robots are at work in a production hall, they can work two to five times faster than is advisable and permitted for safety reasons when humans are in the room.

The proportion of ‘human-free zones’ could increase to up to 50 per cent of the production area over the next five years. If half of the production process runs at double or even quadruple speed, we will find ourselves in a completely different industrial world.

Business models already mapped out today

The business models for the use of humanoids are already mapped out. The robots will have basic capabilities from the manufacturer, and everything else will be added through know-how packages. For example, the basic model can be used as a warehouse worker, but if it needs additional training as a welder, this will simply be added on like an AI function.

It is likely that this new generation of AI robots will gain a foothold in medium-sized companies primarily through leasing models. In the same way that company cars, for example, are leased today, AI robots will be available for leasing in the future. In the future, we can expect to see rapid improvements in robot models and a rapid drop in prices in relation to performance – similar to what we see in the smartphone industry. Every year, you get a smartphone that is at least 20 per cent more powerful for the same price as the previous year's model. We will see a very similar development in AI robots in the future.

Revolution of AI robots with far-reaching consequences

This ‘AI robot revolution’ will have a huge impact on industry, and companies should start preparing for it today. The much higher productivity at significantly lower costs is, of course, enticing. At the same time, however, the availability of low-cost humanoids drastically lowers the barrier to entry for new market players.

A few clever minds who have mastered AI programming can cause traditional industrial manufacturers a great deal of trouble with a small troop of humanoids and a great new business idea, and the emergence of a new generation of industrial start-ups can be predicted in the next few years.

Politics must act

In view of the emergence of autonomous and flexible AI robots, however, it is not only company management that is called upon to be vigilant, but also politicians. It is true that in many sectors, ‘humanoids with AI in their brains’ can be an answer to the shortage of skilled workers. This is certainly part of the solution when the baby boomer generation retires in the next few years. In addition, the use of ‘machine people’ is also an option outside of industry, for example in geriatric care and in parts of the healthcare sector.

But this raises legal and ethical issues to which our society and thus politics must find answers. The legislator must strike a balance between enabling industry, and in particular small and medium-sized enterprises, to use this productivity and cost-cutting turbo, and addressing the associated social issues.

All our social systems in Europa, from pension insurance to health insurance and long-term care insurance to the social safety net, are built on the principle of a working population that finances all of this with part of their earned income. If humanoids take over the value creation process on an ever-greater scale, all of today's already shaky social systems will be in jeopardy. Legislators will have to come up with new concepts, such as a machine tax or an AI levy, i.e. a tax of some kind on the value added by intelligent machines.

Trade unions should rethink their role

Trade unions should also rethink their role in the face of the impending AI robot revolution. In the future, it will be less about saving the last industrial job that a robot can do better and cheaper, and more about adapting the workforce to the new world of robots through training measures. This also includes transitional programmes for when the demographic factor gradually eases the pressure on the labour market as the baby boomers retire.

Small and medium-sized industrial enterprises are the backbone of the German economy. This backbone is already under threat from the energy shock and overregulation. A robot crisis is the last thing we need. Politicians, trade unions and business associations are therefore equally called upon to find answers to the pressing questions raised by the advent of humanoid robots.

Let's take a look at the bigger picture: Europe has fallen behind the US in key technologies such as the internet, digitalisation, smartphones, space travel, satellites and artificial intelligence. In the automotive sector, European industry is currently fighting for its existence between the USA and China. We must do everything we can to avoid falling behind again in the field of humanoid AI robots, because this would hit the core of our industry and thus the heartbeat of our prosperity. No other country in Europe would be as affected by this as the industrial nation of Germany. Therefore, the new federal government would be well advised to address this issue quickly and not to entrust it to the Brussels bureaucracy.

Harald Müller is managing director of the Bonn Business Academy (Bonner Wirtschafts-Akademie, BWA), which has been a successful specialist in personnel development, outplacement, personnel consulting and training as well as in labour market programmes such as employee transfer for over 25 years. BWA sees itself as a neutral mediator between employers and trade unions for the benefit of employees. With the help of BWA, more than ten thousand employees have found a new professional future. Harald Müller is not only involved in the Diplomatic Council, but is also a member of the advisory board of the ‘Education and Employment’ foundation, which is committed to the socially acceptable management of economic structural change.