Communications of the ACM
Robots Cause Company Profits to Fall – At Least At First
Many companies first adopt robotic technologies to decrease costs, a practice that competitors can easily copy.
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Researchers from the University of Cambridge have found that robots can have a U-shaped effect on profits, causing profit margins to fall at first, before eventually rising again.
The researchers found that at low levels of adoption, robots have a negative effect on profit margins. However, as levels of adoption increase and robots are fully integrated into a company's processes, the technologies can be used to increase revenue by innovating new products.
The results are reported in the journal IEEE Transactions on Engineering Management.
The researchers say that if companies want to reach the profitable side of the U-shaped curve more quickly, it's important that the business model is adapted concurrently with robot adoption. Only after robots are fully integrated into the business model can companies fully use the power of robotics to develop new products, driving profits.
From University of Cambridge
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