Thirty-seconds before we were scheduled to be on Automate Live, I asked Interact Analysis research manager Blake Griffin if there were any specific nuances he wanted to broach during our 15 minute tariff conversation. He answered with a single word. I laughed, showing him the iPad I use for show notes. Like a magic trick, it was there, one word constituting the entire first bullet point.
Uncertainty was a through line in virtually every conversation I had at last week’s Automate Show. Even the multi-year global pandemic we all lived through offered something in the way of consistency. Interested parties had plenty of reason to be bullish about automation in its wake, as every sector from food service to nuclear inspection looked to AI and robotics as a way forward through a historically difficult moment.
Over the last few years, North American robotics purchases have slowed to pre-pandemic levels. But you can’t put that genie back in the bottle, as they say. Venture dollars and corporate purchases were a major accelerant for automation, the repercussions of which are very much still being felt today.
Covid-19 confirmed that the global supply chain is a far more delicate ecosystem than many previously thought. Who can forget the visual of
40,000+ unfinished Ford trucks parked on a NASCAR speedway a few hours from the automotive giant’s Louisville assembly plant? Silicon is essential to all aspects of production, and the impact of supply chain bottlenecks are long lived and many.
The phenomenon reinvigorated conversations about “re-shoring” or “near-shoring” manufacturing. Various global events have catalyzed conversations around domestic manufacturing for the better part of the last century, but in the case of Covid, it was all about decentralization.
Industrial manufacturing has become so concentrated in a single geographic region that any upset to the global supply chain can be paralyzing. This a perfect case study for automation. As industrial AI and robotics have grown in sophistication, the notion of decentralized manufacturing seems increasingly plausible.
You would be hard pressed to find a politician on the national level who hasn’t pushed for more domestic manufacturing. As is always the case in politics, however, strategies differ. Tariffs are the current cudgel being wielded in a bid to bring manufacturing back to the U.S. The ultimate impact of instituting this key protectionist tool has been source of much debate. Equally uncertain is how the tariffs themselves will be meted out.
Tariffs will affect the robotics industry in myriad ways. In the immediate term is the question of components – particularly those sourced from manufacturers in China. Much of the industry is taking a wait and see approach to tariffs – there isn’t really another option in terms of day-to-day operations, at least. Such uncertainty can lead to caution and slow R&D investments and innovation. In the long term, we could see manufacturers doubling down on automation investments in a bid to re-shore manufacturing. Though this, too, could be hampered by the increasing upfront costs of investing in automation.
Throughout last week’s show, I jokingly referred to tariffs as the “T word,” in reference to the politics underlying these conversations. For now, however, the real dirty word belongs to the next letter of the alphabet. At least that much we can say for certain.
