Numbers are going to get really large.
Are you ready for the age of superabundance? This is where we are heading. The field of robotics is going to change everything. We are the verge of having tens of millions rolling over per year. By the end of this decade, we will likely see that type of production with 4x by 2035.
This means the ability to produce goods is going to sky rocket. It also will see valuation are going to follow a similar line.
Of course, this is not without precedent. We have seen this story before, although not with the numbers we are looking at.
In this article we are going to cover how the technological advancements are bringing up to the point where society is going to experience another huge shift. It is going to be an economic singularity, similar to the two previous ones. These occurred when we moved from hunting and gathering to agriculture and then on to industrialization.
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Manufacturing Output
The age of robotics is going to be stunning.
We already saw some of this during the past 40 years. A country like the United States has seen its output increase.
Naturally, this is contrary to the rhetoric. I am sure you hear people claim that the United States doesn't make anything anymore. This is complete nonsense.
Let us take a look at the numbers.
According to the Federal Reserve Economic Data (FRED), the total output in US manufacturing from 1960 through 2022 (latest data available) is as follows:
1960: $434.6 billion (nominal), $3.4 trillion (real, adjusted for inflation)
1970: $634.6 billion (nominal), $4.5 trillion (real)
1980: $1.1 trillion (nominal), $4.2 trillion (real)
1990: $1.7 trillion (nominal), $4.8 trillion (real)
2000: $2.3 trillion (nominal), $5.4 trillion (real)
2010: $2.8 trillion (nominal), $5.9 trillion (real)
2020: $4.3 trillion (nominal), $6.3 trillion (real)
2022: $4.7 trillion (nominal), $6.6 trillion (real)
Source: Federal Reserve Economic Data (FRED), Total Manufacturing Industries Output (MANOUT) and Gross Domestic Product Deflator (GDPDEF) datasets.
In a bit more than 40 years, it did a 4x in nominal output.
Here is the problem. The peak was just before 1980, at 19.5 million workers. Today, there are roughly 13 million.
Here is what the Federal Reserve has in its database.
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Basically, we are producing more with a lot less labor. This is what robotics and automation does.
The story takes another twist in the sense that we haven't even scratched the surface.
Humanoid Robots - Changing Society
Many have visions of The Terminator where there are droves of killing machines. A more accurate assessment is a plethora of workers.
The labor force is going to be replaced, to a great degree, by automation. This will be true for both white and blue collar jobs. The combination of AI along with robotics is going to target most industries.
One of the first to be hit will be manufacturing.
The reason to make this assertion is humans cannot simply compete.
Here are the benefits to robots:
They will be manufacturable at less than $20,000 per unit at scale, compared to the cost of $300,000 or more of raising a human child in a wealthy country.
They will be built in days or hours, not 18+ years.
They can be trained and retrained instantly via software download, not over days or weeks or months like humans.
They will work up to three times more hours per day than humans.
They will require only a tiny fraction of supporting workplace expenditures that humans require (e.g., bathrooms, food, comfortable temperature, noise, air quality, parking spaces, HR and training, insurance, healthcare, child care, pensions, stock options, etc.).
They can be redeployed instantly to perform any new task without the social or administrative friction of shifting roles or responsibilities.
They will perform at a totally consistent level of quality, never compromised by boredom, fatigue, illness, drugs, etc.
Imagine what this means when we get into the fields of construction. Automation of that industry will bring down the cost of building, providing massive deflationary forces upon the market.
Another example could be drug discovery or the material sciences. We already see massive improvements due to artificial intelligence. It can run millions of chemical simulations. However, after narrowing things down to a few combinations, humans, since they have arms, still have to do the lab testing.
What if this was done automatically? Imagine the breakthrough in healthcare, construction, and the production of products.
Bringing The Digital To The Physical
Robots bring the laws of the digital world to the physical. Here is where we see massive deflationary effects taking place.
Consider how photographs were physical in nature. There was a cost to them. In spite of that, millions of pictures were taken each year.
This is nothing compared to what we see today. Photographs, for the most part, are overwhelmingly digital. There is basically zero cost to a photograph. We see the same in distribution due to the Internet.
Is it any surprise we have a couple trillions photos taken each year?
If we asked someone in the 1970s what that would be, it is likely they would agree that is a superabundance of photographs.
Of course, as we move further with generative AI, they are coming from computers. What happens when prompts become the norm?
Economic Singularity
The next economic singularity will see increases that are at least 10x what we see now. This means grow rates of near 30% per year. Part of the challenge going forward is going to be capturing this since our metrics are outdated.
We covered this elsewhere so diving into it isn't necessary. The point being is that we will see scarcity start to diminish. It is already present in the digital realm. The next transformation will be to the physical.
Here is just a sampling of what we see:
At one time, there were tens (hundreds) of billions of dollars in revenues. Today, a lot of this is free to utilize. Even more importantly, it is becoming free to set up.
All of this is advancing at a rapid pace. The physical component to robots means we will have slower scaling than in the digital world. However, ponder the fact that we likely have more than a billion people who have tried a chatbot.
This technology is not even on the market, in scale, for 2 years.
The next 5 years will be a wild ride.