I, for One, Welcome Our New Amazonian Robot Overlords

This article is part of our Rising Star Portfolio series.

Last month, Amazon.com (Nasdaq: AMZN  ) announced its purchase of Kiva Systems, which brings robotic labor to shipping centers. This could be a futuristic victory for squeezing hyper-efficiency from the e-commerce giant's ever-burgeoning business.

On the other hand, it could also be a peek into a more dystopian future. After all, ugly portrayals of the revenge of the machines have been portrayed many times in countless sci-fi books and movies that Amazon itself sells.

Do robots dream of affordable health insurance?
Amazon's $775 million purchase of Kiva will help order fulfillment go fast and furious. Kiva's robots already sling shoes and diapers for Amazon.com, since its subsidiaries Zappos.com and Diapers.com use them.

The first thought that springs to mind is that robots could replace human workers. Remember allegations last summer that Amazon's eastern Pennsylvania warehouse was unhealthily hot? Apparently so many workers landed at a local hospital emergency room that OSHA was contacted about an unsafe work environment; 15 laborers reportedly collapsed. Robots, on the other hand, are tireless; require a one-time investment and no raises, bonuses, or health insurance; and, other than C-3PO, don't have a tendency to complain.

Still, when it comes to human versus robotic labor, right now it looks as if the use of robots in fulfillment centers will make Amazon workers' lives easier instead of taking their jobs. The robots will do the walking for them and bring them the merchandise they need, saving them the frequent walks to pick the stock from shelves. So Amazon still needs to make the climate hospitable for humans in its warehouses.

The Wall Street Journal reported that other retail operations, such as Gap and Crate & Barrel, use Kiva robots, too. This is another win for Amazon: The company will continue to sell the robots to other retailers with a need for speed. Each robot sports a price tag of somewhere between a few million to nearly $20 million.

An Amazon spokeswoman said no layoffs will result from the Kiva acquisition, although stepping up efficiency probably will result in the eventual loss of some jobs. Over the long haul, though, this kind of efficiency should mean more opportunities in other areas for human workers.

Robots, pro and con
Robots can be annoying, if not downright problematic. Robo-calls aren't high on anybody's list of great innovations that make life easier for anyone, except maybe for irritating telemarketers who interrupt our dinnertime.

And remember what happened during the Gulf of Mexico oil-spill disaster? BP (NYSE: BP  ) sent in the robots, but one of them ended up knocking the venting system, filing the operation under the category for robotic fail.

Still, robots aren't always bad news. iRobot's (Nasdaq: IRBT  ) robotic Roomba vacuums can make life just a little bit easier. I'm sure many people don't mind having a Roomba take a little of the elbow grease out of housework.

The company's iRobot Warrior and PackBot robots have their usefulness, too; Progress Energy (NYSE: PGN  ) recently purchased some to do some work at its Robinson Nuclear Plant. These types of robots do work many people understandably don't want to do, like running around near nuclear and radioactive environments.

Then there's MAKO Surgical (Nasdaq: MAKO  ) , which provides robotic solutions to medical procedures, giving orthopedic surgeons and their patients access to less invasive methods to repair knees and hips.

Danger, Will Robinson?
Amazon's Kiva acquisition gave me pause at first glance. I bought shares of Amazon.com for the socially responsible Rising Star portfolio I'm managing for Fool.com, because I believe it's a great, innovative, and well-run company that does more good than ill in the world.

However, no company is perfect, as Amazon's overheated-warehouse controversy illustrated all too well. I had to wonder whether the Kiva acquisition was a step toward a more inhuman, if not inhumane, world.

For now, though, I remain overall bullish on Amazon. Maybe we don't have to joke about welcoming our new robotic overlords, but instead we can embrace the idea that robots can simply help. We can hope that taking some of the manual labor out of certain occupations lightens the load and physical wear and tear for human workers.

In the long run, such innovation can speed up and juice economic activity to open up more productive employment for workers everywhere.

What do you think: Can we have socially responsible robots, or could Amazon's business become way too inhuman? Let me know in the comments box below.

Does investing in robots appeal to you? Check out why our analysts believe MAKO is compelling in "Discover the Next Rule-Breaking Multibagger," absolutely free.

Alyce Lomax owns no shares of any of the companies mentioned in her personal portfolio. Motley Fool newsletter services have recommended buying shares of MAKO Surgical, iRobot, and Amazon.com. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (14) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 11, 2012, at 9:11 PM, InvestWhatWorks wrote:

    Love the Blade Runner reference.

  • Report this Comment On April 12, 2012, at 11:27 AM, racchole wrote:

    The chance of there being a Blade Runner reference motivated me to read the article.

  • Report this Comment On April 12, 2012, at 12:36 PM, TMFLomax wrote:

    Blade Runner... one of the best in the genre.

  • Report this Comment On April 12, 2012, at 3:03 PM, Risky88 wrote:

    You say robots don't need pay raises or insurance.

    But we all know nothing lasts forever.

    Just like any car over time, it will break down and need repairs especially if they are not careful and only buy the cheapest on the market.

    Everyone knows the parts of labor of machinery can be very expensive, how is that compared to a human, no idea.

    Just sayin

  • Report this Comment On April 12, 2012, at 4:00 PM, TMFLomax wrote:

    Humans make much better jokes too, and that is priceless! ;) (JK, in all seriousness Geldej, that is a good point.)

  • Report this Comment On April 12, 2012, at 5:40 PM, DJDynamicNC wrote:

    " Over the long haul, though, this kind of efficiency should mean more opportunities in other areas for human workers."

    That's the utopian goal.

    Of course, it presumes that the workers survive the transition - and that the jobs to which they transit are not themselves eliminated.

    Ultimately, we could find ourselves in a situation in which almost every job can be performed better and more efficeintly by robots.

    Tragically, in a capitalist society predicated on wage labour, that would be a disaster. Human suffering on an untold scale.

    It's funny - the world we've constructed would fall apart if people weren't forced to work.

    It shocks me that people aren't outraged about this.

  • Report this Comment On April 12, 2012, at 6:33 PM, InvestWhatWorks wrote:

    @DJDynamicNC

    That sounds a lot like the old ATM-argument. The argument being that more ATMs will lead to less bank teller jobs... and that's bad!

    But that doesn't account for the jobs created because of those ATMs. ATMs need to be designed by a humans (added jobs). The software that needs to be made and updated by humans (added jobs). The manufacturing of the machines needs to be done by humans (added jobs). The maintenance of the machines require humans (added jobs). That manufacturing and maintenance of the ATMs need parts and materials (added jobs). The money in the ATMs need to be replaced by a humans (added jobs). These bank networks need to be created/maintained (added jobs). The bank networks need security software made by humans (added jobs).

    I could go on and on.

  • Report this Comment On April 12, 2012, at 6:41 PM, InvestWhatWorks wrote:

    Oh, and I forgot to say: Despite the ATMs, we have more bank teller jobs today than we had 20 or so years ago.

  • Report this Comment On April 12, 2012, at 11:29 PM, DJDynamicNC wrote:

    @Invest - oh you're right, we still tend to create more jobs than technology makes obsolete. I'm no luddite - let progress march on!

    The issue I have is that it's not hard to envision a world in which every task required for a decent life can be completely automated, and that world would destroy the capitalist system we've created. We'd either have to make-work for people to have jobs still, or make it so that your ability to make a living is NOT tied to earning an income through a job. Socialism solves this very well, but capitalism has trouble with it (to my knowledge - I could be wrong! Would love to hear the other side).

  • Report this Comment On April 12, 2012, at 11:50 PM, TMFBiggles wrote:

    @ InvestWhatWorks -

    We also have 60 million more people than we had in the United States 20 years ago. Most jobs now employ more than they did 20 years ago, but what's more important is whether or not job growth keeps pace with population growth.

    One also needs to consider whether or not the new bank teller jobs created offer the same level of income and benefits as those of two decades ago, or whether the trend for bank teller jobs has been towards lower wages and less security. If the latter is true, then you could in fact make the case that the overall impact of ATMs on bank tellers has been negative, since fewer of them are earning a living wage than did in the 90's.

    And then we can start talking about whether the aggregate benefit of the added ATM maintenance jobs outweighs the losses from weakened bank teller income levels, and so on.

    ...

    On a lighter note, am I the only one who looked at this as a Simpsons reference?

    - Alex

  • Report this Comment On April 13, 2012, at 12:30 AM, InvestWhatWorks wrote:

    @TMFBiggles

    Until the great-recession, population growth and job teller employment growth was pretty much even. Grabbing some numbers from the Bureau of Labor Statistics and elsewhere, and assuming my calculations are correct: US population increased by about 26% from 1985 to 2007. Bank teller growth increased by about 25% from 1985 to 2007.

    Since the great-recession, however, that has obviously changed.

    Also:

    The article title was, of course, The Simpsons reference. The "Do robots dream of affordable health insurance?" was the Blade Runner Reference. "Do Robots Dream of Electric Sheep?" is the title of the book that Blade Runner was based on.

  • Report this Comment On April 13, 2012, at 12:32 AM, InvestWhatWorks wrote:

    "Job teller"... obviously meant to say "bank teller" there in my first sentence.

  • Report this Comment On April 14, 2012, at 3:06 AM, Truthbetold7 wrote:

    Mako robotics does not offer less invasive options for hip and knee surgery. The robotic application is simply a cutting tool and offers nothing to permit less trauma to the soft tissues when compared to non-robotic techniques. Fact is that consumers are so attracted to technology that the marketing of this concept has gone far beyond the true surgical value. For example it has not been made clear that all Mako patients require a Cat scan prior to surgery. This exposes all Mako patients to far more radiation than a simple conventional X-ray. In addition, Mako patients receive the additional trauma of having pins placed in the adjacent bone to allow the use of the controversial computer guidance system. There is no scientific data to support a clinical advantage of this technique. An additional concern is the longer operating time required by the computer set up and the pin placement. Again with no proven clinical advantage. Oh, did I mention the million dollar price tag of this technology at a time when healthcare costs are of great concern. The Mako concept seems to fit more into a hospital's marketing budget than into medically advantageous capital equipment.

  • Report this Comment On April 17, 2012, at 3:20 PM, TMFLomax wrote:

    I missed a lot of the interesting comments here, so sorry about that. I'm glad to read the discussion... and yes, Simpsons AND Blade Runner/Philip K. Dick references. And Star Wars, Lost in Space. I guess I could have gotten a lot more robots in here...

    Best,

    Alyce

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