When Rethink Robotics was founded in 2008, it was called Heartland Robotics. When it launched its first manufacturing robot in 2012, founder Rodney Brooks spoke personally about how the technology could support a rebirth in U.S. manufacturing.
“It’s aimed at making it more competitive to do low-cost goods in the U.S., rather than outsourcing them to China,” he said at the time. “That was my motivation.”
So why is the Boston-based robotics company now making a strong push into China and other international markets with its new robot?
Speaking to BostInno on Tuesday, Brooks, who is also Rethink’s chairman and CTO, was adamant that Rethink’s commitment to U.S. manufacturing hasn’t changed, saying that it’s currently the company’ biggest market with more than 100 manufacturers using its U.S.-built robots. And, he added, the company had always planned to expand internationally with the goal of becoming the worldwide leader in manufacturing robots.
“We have to become the dominant player in the world in this collaborative robot space.”
“The worst thing that could happen is we create a market in the U.S. and someone creates a competing robot elsewhere,” he said, adding that he would prefer to have international manufacturers use its U.S.-made robots than the other way around. “We have to become the dominant player in the world in this collaborative robot space.”
As part of its initial push in China, Rethink (a finalist for BostInno’s 50 on Fire awards this year) announced a distribution partnership with a division of multinational company Shanghai Electric, saying it would help the company reach new customers there. Earlier, in October, the company announced its expansion in Latin America with distribution partners in Mexico. The company is expected to announce its expansion into Japan later this month, with an announcement about its European expansion expected in December.
Rethink has two manufacturing robots on the market, both to help reduce the need for human laborers in menial tasks. They’re also meant to be less expensive and easier to set up than other industrial robots.
There’s Baxter, a two-armed robot launched in 2012—and Sawyer, a one-armed robot launched this year that is quicker and handles tasks requiring more precision, like circuit board testing.
When Rethink first developed Baxter, it was initially designed to meet only U.S. and Canadian certifications so that the company could test out those markets. At the time, Brooks had said those markets are “so big that we can have explosive growth for years before we have to go elsewhere.”
Reflecting upon that statement Tuesday, Brooks said, “To be frank, I underestimated how soon the labor shortage would hit in China.”
A survey of Chinese manufacturers by Standard Chartered Plc. published earlier this year found that 85 percent of respondents were having labor shortage issues just as bad as last year.
Labor shortage was one of the main drivers that led Rethink to enter the Chinese market earlier than planned, Brooks said. After the company decided to certify its robots for international markets in late 2013, it started looking at China’s growing labor shortage and how the company could help manufacturers fill the gap there with its robots.
“As people leave school these days, less and less of them want to go into manufacturing,” Scott Eckert, Rethink’s president and CEO, said. “The labor pool keeps shrinking.”
“To be frank, I underestimated how soon the labor shortage would hit in China.”
Eckert added that with rising labor costs in China, it started to make economic sense for Chinese manufacturers to invest more in automation. “The combination of those two things created way more demand than we originally planned for in China,” he said.
There’s another reason, however obvious, Rethink would want to enter the market: China has the largest manufacturing economy in the world, with a 22 percent share of manufacturing activity, according to the Manufacturers Alliance for Productivity and Innovation. The U.S. is in second place with 17 percent.
Brooks said he doesn’t think the automation of Chinese manufacturing will hurt U.S. industry, because China has a distinct supply chain for manufacturing goods such as phones that can’t be replicated elsewhere. Over in the U.S., he said, a lot of manufacturers are more focused on lower-volume production of specialized goods.
Sales started out slow in the U.S., Brooks said, because the market wasn’t fully educated about the value of Rethink’s robots. He said U.S. sales have improved since then.
“Now that we figured it out, it’s taking off,” Brooks said.
Rethink currently employs about 100 people, mostly located at its Fort Point office in Boston’s Seaport. It has raised about $100 million in funding, with the venture capital arm of General Electric, Goldman Sachs and Jeff Bezos’ Bezos Expeditions among its investors.