I have shared thoughts the past couple of weeks on declining capital intensity in Canadian manufacturing operations and its impact on our productivity. Now let's have a look at countries to benefit from nearshoring.
Robot density is just one indicator of where some of the investment is going. The chart below provides insight into robot adoption in Eastern Europe and Latin America.
Recall that the numbers for a few G7 countries were:
➡ Germany - 415
➡ United States - 285
➡ Canada - 198
In countries with lower labor costs, it has typically been harder to justify investments in automation and robotics. That is starting to change as places like Mexico and Turkey saw double digit increases in robot installations in 2022.
Nearshoring labor-intensive production to Mexico, Turkey, Morocco, or Poland is the more likely transition as manufacturers look to balance their global supply chains, while remaining competitive.
In order to compete with costs in China or Southeast Asia, the nearshoring regions will need increasing automation. These solutions will have to look different than those typically adopted in the G7. They will require more simple approaches to tooling and integration, supplementing the workforce to drive productivity rather than being evaluated as a direct replacement.
There is a major opportunity for automation companies that can strike the balance between cost and labor efficiency to drive into markets which don't get a lot of attention today. Or maybe home grown solutions in these markets will become the next great industrial tech story?
What exciting manufacturing technology companies have you seen from emerging markets?
WORLD´s ROBOT DENSITY part two - countries ranking 21st-42nd place
FACTS about Robots – the Global Automation Race in Numbers:
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