Can Israeli robots help China’s economy?

The low-wage model on which Chinese manufacturers have built their businesses could be falling apart. Made-in-Israel technology may help them keep it together

Zvi Schiller Courtesy)
Zvi Schiller Courtesy)

Israel’s small but advanced robot industry has a big chance to grow, industry leaders say — by building robots for China, which is set to become the most robot-hungry market in the world.

China — now a bigger trading partner to the rest of the world than the US — made its fortune from low-cost and low-wage manufacturing. But Beijing wants to raise workers’ standard of living. With wages rising and more Chinese demanding the accoutrements of middle class life, many Chinese companies have been feeling the squeeze, says Zvi Shalgo, chairman of the PTL Group, which helps Israeli companies set up shop in China.

For many, automating the jobs that they can no longer afford to pay humans to do is their only chance of survival, Shalgo told the heads of Israeli robot technology makers at a recent meeting of the Israel Robotics Association (iRob). Shalgo, who is based in China, said that “local manufacturers are investing heavily in robotics, as new regulations give workers more rights, and workers demand higher wages.”

Even if Chinese workers remained “in place,” said Shalgo, the low-wage mass manpower model that China has built its economic success on will come to an end, sooner rather than later. “The long-term results of China’s one child per family are beginning to be felt, and the population of available workers is shrinking.”

Recognizing the problem, Shalgo said, the Chinese government has allocated large amounts of funding for factories that want to convert to robotics. “The current Chinese five-year plan includes a strong emphasis on automation, so any company that wants to is able to borrow money at good terms in order to buy a robot system.”

That’s an opportunity for Israel, said Shalgo. “Soon the market will reach a billion dollars, and more. There’s no reason Israeli companies can’t be a part of that revolution.”

In fact, according to Professor Zvi Schiller, chairman of iRob and a professor of Robotics at Ariel University, where the iRob event took place, Israel has a very advanced robot industry that, with the right help, will turn Israel into a world center of robotics. “Israeli robotics companies have an excellent track record of developing advanced robots in the areas of medicine, security, and industry, and Israel would be an excellent partner for China, which is just getting started on its own robot industry.”

Several CEOs of Israeli companies currently working in China made presentations at the event as well. Ari Dotan, whose iScan Robotics has worked in the Chinese market for nearly a decade, gave advice on how to succeed in China (among the clients for its automated glass manufacturing system are two of China’s largest automobile and photovoltaic energy manufacturers).

“The Chinese don’t care that IBM or another major multinational corporation are your customer,” Dotan said. “They are much more impressed if you are on the ground in China, and the more Chinese companies you do business with, the more they are likely to do business with you.” Israeli robot technology companies, he said, would do well to set up shop in China as soon as possible, the better to take advantage of this new “Chinese revolution.”

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