Why Is China Beating the U.S. in the Automation Race?

by Saman Farid

When my family moved to China in the ’80s, I saw first-hand what rapid industrialization looks like in manufacturing. Every city, town and village in China started building factories and, over the course of 20 years, the country became an industrial engine for the world. It gave me a sense of what’s possible and how quickly things can shift. Then I moved to the United States in the ’90s and saw the same trend — but in reverse. The U.S. was losing its industrial base. Cut to today and, as we aim to tighten supply chains, manufacturers in America are severely under-resourced, with their factories sitting idle up to 75% of the time. Automation can easily flip that number to double or triple productivity, but even as AI makes robots smarter every day, the U.S. continues to lag far behind China when it comes to embracing automation.

The key challenge most U.S. manufacturers face is accessibility. Customers repeatedly tell me they’ve been trying to embrace automation for the last decade but could not surmount the barriers. That’s because the vast majority of U.S. manufacturers are small businesses that cannot afford to take risks, build the technical capabilities, and pour their CapEx budgets into robots. The knowledge, expertise and deep pools of capital that are traditionally required to onboard automation have made it inaccessible for the typical factory — even though they are the ones who need it most.

Modernizing our industrial base to compete with China means we must work both privately and at the government level to find innovative approaches that democratize automation by making robots more accessible to businesses of all sizes.

Saman Farid is CEO and co-founder of Formic, a Robotics-as-a-Service company that helps businesses automate with flexible, no CapEx contracts.

[In this issue’s From the Top feature, “Nancy Kleitsch: Making an ICONic Evolution with Automation,” ICON co-owner Nancy Kleitsch describes her company’s success with Formic’s Robotics-as-a-Service model.]