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Robots are expected to revolutionize physical labour the way computers upended administrative tasks like cataloging.

Already, robots can communicate with one another, learn quickly from humans and teach themselves how to complete tasks. Ark Invest, a New York investment firm specializing in disruptive innovation, estimates automation could replace 75 million jobs through 2035, with agriculture and food services feeling a lot of the impact.

But, amid so much labour disruption, the firm doesn’t predict GDP falling. Rather, automation will cause soaring productivity, job creation and accelerated economic growth. Between now and the end of 2035, U.S. GDP will grow by US$11.6 trillion, or 42%, Ark estimates, with most acceleration happening after the year 2024.

While big, industrial robots will transform factories and logistics operations, Sam Korus, industrial innovation analyst for Ark Invest, is more excited about collaborative robots. These machines are easy to train and use sensors to work safely with humans. Right now, most collaborative robots are mechanical arms that can perform human tasks.

“You can literally grab the arm of the robot, move it one place, and move it to another place, and be like, ‘That’s what I want you to do,’” Korus says. “These robots are very promising and seeing tons of growth because they’re so cheap.”

The possible tasks run from the mundane to providing a human touch. In Mountain View, Calif., Zume Pizza’s assembly line now uses robots to squeeze sauce onto crusts and move pizzas in and out of a blistering hot oven.

Collaborative robots can also complement the growing space of health and elderly care. In 2050, a projected 21.5% of the world’s population will need aging care, a gap that can be filled by artificial intelligence and robotics, says Comet Labs, a San Francisco-based venture capital fund for intelligent machines.

Automation hasn’t yet pushed up productivity, but the advantages to businesses are becoming apparent as overhead costs for intelligent machines continue to fall. Already, a small business can purchase a collaborative robot for less than an employee’s annual salary, and have that machine perform the person’s job for years.

Projected percentage increase in U.S. GDP with automation

Projected percentage increase in U.S. GDP with automation

Source: Ark Research

Key names

So how do clients get a piece of this growth? First, start by knowing key robotics names, many of which still offer good value. “I don’t think they’re necessarily being rushed into yet. I think the growth opportunity is so large that the [investment] opportunity is there,” says Korus.

He points to players like California tech company Nvidia Corp., or Fanuc Corp., a leader in deep learning. Fanuc is building factory robots that can learn a new task overnight as opposed to needing programming.

Kyle Landry, research associate specializing in automation at Lux Research in Boston, sees small businesses renting collaborative robots, as they would a payment system or espresso machine. He says some companies are already offering robotic arms as a service, noting London-based Automata Technologies and Tennessee’s Hirebotics. Both are private companies.

Landry also expects big growth for commercial aerial drones, pointing to startups like Waterloo-based Aeryon Labs, a small unmanned aerial vehicle (UAV) producer, and Sky-Futures, a London-based company that provides drone-based inspection services. “The next stage is an investment shift toward companies making software for UAV platforms, to make them fly smarter and for specific applications, whether it’s for agriculture inspection, data collection, or oil and gas asset inspection,” Landry says.

Top 10 holdings

Motif Investing’s Robotics Revolution Fund Ark Invest’s Industrial Innovation ETF
18.40% Emerson Electric Company EMR 11.58% Tesla Motors Inc. TSLA
18.30% Intuitive Surgical, Inc. ISRG 9.26% Stratasys Ltd. SSYS
17.0% Rockwell Automation Inc. ROK 6.55% Nvidia Corp. NVDA
12.00% ABB Ltd. ABB 6.49% Proto Labs Inc. PRLB
11.30% Honeywell International Inc. HON 5.56% Inc. AMZN
4.90% Cognex Corporation CGNX 4.36% Baidu Inc. BIDU
3.30% iRobot Corporation IRBT 4.01% Materialise NV MTLS
2.10% Brooks Automation Inc. BRKS 3.56% Fanuc Corp-UNSP ADR FANUY
1.40% Mazor Robotics Ltd. MZOR 3.51% 2U Inc. TWOU
1.20% Teradyne Inc. TER 3.31% Teradyne Inc. TER
As of February 17 As of February 17

Other ways to capitalize

If clients are skeptical about pure plays, consider companies and industries most exposed to the productivity gains of automation. Tesla Motors, for instance, has talked about revolutionizing its production with robots, and is currently using machines from Fanuc and Kuka Robotics at its factory in Fremont, Calif.

Landry says companies using traditional “dull, dirty and dangerous” industrial and manufacturing processes will reap huge benefits, as well as firms with significant logistics and manufacturing processes, such as storage, shipping, retailing and transportation. Those will see immense improvements in productivity.

Supermarket chains, for instance, could double their margins on automation, Korus adds. Panera Bread was an early mover that started touch-screen ordering by customers, and Amazon is experimenting with self-checkout stores. Korus points to Ark research showing that Amazon’s gross margin, excluding its cloud services, has grown since it introduced robotics into its warehouses. Amazon acquired Kiva Systems, a warehouse robotics firm, in 2012.

Clients can also get a piece of the robotics market through thematic investing. Ark Invest offers an Industrial Innovation ETF (NYSE:ARKQ) that aims to invest in the automation revolution through companies involved in 3D printing, autonomous vehicles, robotics, and other technology-driven advancements. Annual fees are 0.75%.

Motif Investing, a California-based online broker, also offers thematic funds, including one called Robotic Revolution, which invests in automation, robotics, advanced manufacturing and drones. The online service charges $10 per trade for the fund.

As Motif’s website says, “Step aside, humans.”

Accessing the robotics revolution

Pure play: Invest directly in robotics companies like Nvidia Corp., Fanuc Corp., Shanghai SIASUN Robot & Automation Co., Hanson Robotics Ltd. and many others.

Industries: Understand the industries and companies that will benefit most, such as those in logistics, healthcare, retailing, storage or manufacturing.

Startups: Network with insiders at startup labs and tech hubs for private investing opportunities.

Thematic investing: Discover thematic funds such as Motif Investing’s Robotic Revolution fund or Ark Invest’s Industrial Innovation ETF.