Moving towards an automated world
Technological advances are creating a new era of automation as companies increase their use of automated machines and robots in order to remain competitive in the global manufacturing arena.
While the evolution of machinery towards automation is in progress, its full adoption will take some time. Factors that will affect the extent of this adoption are classified into four main areas.
First, the feasibility of adopting new technologies, both technically and financially, is the key challenge in this development. Important technologies that are invented need to be adapted into solutions that automate specific activities. Also, developing automation technologies takes capital and usually requires high initial costs compared to wages. One of the largest examples is Amazon, the world’s e-commerce giant which has aggressively shifted from using people in its warehouses to automated robots. The company now has 45,000 robots working in their warehouses, a 50% increase from last year to cope with the increasing demand in e-commerce and to overcome increasing wages.
Second, labor market dynamics such as the supply, demand and cost of labor will affect the adoption rate of automation. Japan is now facing the highest proportion of working seniors among developed countries. According to the Statistics Bureau of Japan, the number of workers older than 65 is calculated at 21.7 % of its total population. This shift is creating an acute shortage in the labor supply in the manufacturing sector, therefore creating a space for automation to be adopted. Thailand, though not in as urgent a predicament as Japan, will nonetheless follow a similar shift with its ageing population. Currently, Thais older than 65 account for 9.7% in 2015, and this rate is set to grow further.
Third, automation can also provide economic benefits such as an increased quality of work and safety as well as labor cost-saving. Significant benefits like decreases in the accident rate by using automation could go far beyond labor substitution. According to the Social Security Office of Thailand, accidental rates in food factories have shown a significant decrease from 9,080 instances in 2010 to 4,534 in 2015, a reduction of 13% annually. Increased use of automated machines, as is the case among companies such as Charoen Pokphand (C.P.) and ThaiBev, in automated production lines could further improve safety.
Fourth, regulatory and social acceptance could take time as people transition with the adoption of new technologies where machines replace human interaction in some settings such as hospitals or basic medical care. CT Asia is the first Thai company to manufacture commercially serviced robots, called Dinsow. In 2014, the company released its third-generation Dinsow robots which focus on taking of the elderly population and became the first Thai robot to be exported to Sweden and Japan. CT Asia Robotics continues to partner with Thai and Japanese hospitals and expects to sell more than 1,000 Dinsow Minis this year.
Taking all of these factors into account, the role of automation will further change and expand in this new era, where machines are required to increase productivity and safety as well as to deal with labor shortages. Thailand, as a production hub for many machinery and parts for local consumption and exports, is strategically positioned to adapt to such technologies and advance the levels of automation and robotics in various businesses including food, agriculture, and medical services.