[PB Notebook] The New Megatrend Approaching Daily Life: Robot Industry

Recently, news has reported that officials from the Agency for Defense Development and the Ministry of Trade, Industry and Energy are considering expanding the distribution of advanced robots to address the shortage of military personnel. Robots, which were once only seen on TV and in movies, are expected to be encountered not only in industrial sites and daily life but also in the military. Robot vacuum cleaners are included in the essential three major new home appliances for newlyweds (dishwashers, dryers, robot vacuum cleaners), helping to alleviate some of the stress caused by household chores. Robots assist with everything from food delivery to guidance, and barista robots serve coffee and other beverages.

In this way, various types of robots are being developed across different fields to pursue convenience in life. In particular, research and development and utilization of robots to compensate for labor shortages due to aging populations are increasing, and rising labor costs are acting as a major factor driving the growth of the robot market. In fact, as of 2023, labor costs amount to 9,620 KRW per hour, which totals 1,924,000 KRW for 8 hours a day over 25 working days, but serving robots used in restaurants reportedly cost only 300,000 to 600,000 KRW per month in rental fees including insurance.

Meanwhile, the deglobalization and regionalization trends triggered by the US-China trade conflict in 2018 have created a new momentum, playing a significant role in the development of the robot industry. Investments in robots, which are key to factory automation, are accelerating to revitalize manufacturing economies by region and bloc, making it an industry receiving the greatest benefits.

Global consulting groups forecast that the robot industry will experience explosive growth from a scale of 25 billion USD in 2020 to between 160 billion and 260 billion USD by 2030. Among these, the industrial robot market was valued at 13.2 billion USD in 2020, and is expected to grow at an average annual rate of 8% from 2020 to 2024, supported by manufacturing promotion policies in major countries and investment demand in new industries such as electronics and electric vehicles.

Additionally, since the 2020s, the robot industry has entered a popularization phase by combining with artificial intelligence (AI), the Internet of Things (IoT), cloud robotics, and 5G (fifth-generation communication), showing a trend of popularization under the name of service robots beyond growth centered on industrial robots.

Currently, robots are expanding their roles beyond factories to areas such as food preparation, delivery services, care services, cleaning, guidance, and security. While the growth of the robot industry was mainly driven by the need to counteract productivity declines due to population aging, the decrease in robot prices due to technological development and the increase in robot demand to improve quality of life have also been major factors accelerating their introduction into daily life.

Following the pandemic, rising raw material prices and wage increases have caused inflation to soar, leading to expanded adoption of robots for management efficiency and increased interest from investors. The representative robot ETF (BOTZ) has shown a return of over 20% since the beginning of the year. Despite variables such as interest rate hikes and economic uncertainties in the financial market, robot investment is a field expected to grow in the mid to long term.

Younggak Kim, Senior Research Fellow, WM Star Advisory Group, KB Financial Group (WM Investment Strategy Department, KB Securities)