The Winter Olympics are over, but in this episode of Motley Fool Answers, it's time for the second biennial Olympics of Foolishness, in which we award medals to various countries in business categories such as robotics, e-commerce, and start-ups. Which nations are leading the way in these key sectors and arenas? To determine the winners, hosts Alison Southwick and Robert Brokamp have recruited Motley Fool Asset Management's Bryan Hinmon and Tony Arsta.
First up, the robotics event. Will the gold medal go the leader in developing them, or using them? The best on raw numbers, or the best on precision?
A full transcript follows the video.
This video was recorded on Feb. 20, 2018.
Alison Southwick: Let's get to the awards, shall we? The medals for these events in investing, and economics, and I don't know. The first category that you chose, Bryan, is robotics. Why did you pick this category?
Bryan Hinmon: This is a category that's really cool. People care about this: robots and artificial intelligence. It's all the rage.
Robert Brokamp: I was going to say. It's all the rage. It most certainly is.
Hinmon: So, let's get this started off. Are we going bronze to gold?
Southwick: Yes, let's do bronze to gold.
Hinmon: Bronze to gold. Bronze we're going to start off patriotic and I'm going to give it to the United States.
Southwick: Oh, I'm glad we're getting the medal.
Brokamp: But not getting the gold. Interesting.
Hinmon: Hey, it is what it is. Let me get to the justification, here. Where we've seen robotics really take off, so far, is in manufacturing, and the leader is really in the automotive sector. The U.S. sells 15-18 million cars every year, and we've gotten pretty good at manufacturing them. And we use a lot of robots to manufacture them, so that's really where robotics got its start in the U.S. And because we love our cars, there's a lot of robots here.
Really, what the bronze medal comes down to is it's more and more manufacturing coming back to the U.S., and so we are buying a lot of robots and we have a ton of innovation, here, to make those robots better and get smarter through artificial intelligence. The reason that we didn't score higher than bronze is because the U.S. loves protecting our jobs.
Southwick: I was going to say. Robots put people out of business.
Hinmon: Exactly. I was just reading an article the other day that said nine robots did what 140 employees would do, and that was in auto-specific applications. So, you've got a ton of robots, here, in the U.S. but what keeps us from going higher is the fact that we're going to probably slow adoption because we love protecting our jobs.
Brokamp: Got it.
Southwick: Who gets the silver?
Hinmon: Silver goes to Japan.
Brokamp: I was thinking they'd be gold, so now I'm curious.
Southwick: I know!
Hinmon: If you think about some of the defining cultural characteristics of Japan, one of the first things that comes to my mind is just precision. They are a culture that prizes precision, and when you realize how these robots are used, you think of articulating arms that have a very specific function that has to be precise.
Tony Arsta: Like playing Ping-Pong.
Hinmon: Among other things. Since the '70s, they've been a leader in the manufacturing of robots, and so they have been at it for the longest time. The largest robot manufacturers reside in Japan and sell throughout the world, and they use them, themselves, as well.
What's really interesting is you think about the demographics of Japan. They have an aging population, and so there's actually a need created to do more with fewer working people that has put them in the position that they're in to get the silver medal.
Southwick: So, who gets the gold?
Hinmon: Dun, dun, dun, dah! The gold goes to China.
Hinmon: Honestly, this is the result of brute force and resources.
Southwick: And a triumphant winning spirit. This is the Olympics. I'm trying to get some Olympics in here.
Hinmon: That was very feel good. It seems like every week the government in China is coming out with a new master plan. Well, they have a "Made in China 2025" plan, which is all about manufacturing in a smarter and more efficient way. Robot density. That's number of robots active per 10,000 manufacturing jobs.
Brokamp: If such a metric exists.
Hinmon: Yes, it's a real metric. Now, China doesn't score particularly well in this.
Southwick: Well, there's so many people, there.
Hinmon: But if you look at the trajectory, it's tripled over the last three years, so they are just adopting robotics and artificial intelligence at an astounding rate. Very recently they purchased one of the main robot producers, called Kuka, which was actually a German company. They are clearly trying to become a player in the production of robots, and not just the use of robots.
Brokamp: Due to their one-child policy, which they've relaxed a little bit, they have their own demographic issues as well, so they're similar to [Japan] in that they have a very aging population.
Southwick: Well, before we move on from this category, let's have a player profile, shall we? Let's talk about one particular player that you like in this industry.
Hinmon: This player is like the Olympian in their fourth Olympics.
Hinmon: This is the aged veteran. I want to talk about a Japanese company called Fanuc. Fanuc was one of the earliest producers of robots in Japan starting in the '70s, and when you see pictures of robots in factories and you see yellow ones, those are the Fanuc robots.
Southwick: Oh, OK.
Hinmon: They have a very characteristic yellow. You see them all the time. I highly encourage you to go to YouTube and check out some videos on the Fanuc robots.
Southwick: How do you spell Fanuc?
Hinmon: F-A-N-U-C. You can see them playing Ping-Pong, like Tony was alluding to. Doing just some amazing things. The roots go far back. Their whole deal is they build cookie-cutter robots. They actually have robots to build robots, and then you program them to perform a specific task.
Southwick: That's how the robot revolution begins.
Hinmon: So, it's very meta. It's robots building robots.
Southwick: That's a tag line right there.
Hinmon: And then you give them a special tool, or you give them special software to do precisely what you want to do, so they're like a robot manufacturing line. It's really remarkable to see. Anyway, they're one of the Big Four robot manufacturers. A very well-run company located in Japan.
Southwick: Have you guys seen the video of the robot they tried to teach how to downhill ski?
Brokamp: Is it successful or not? No.
Southwick: Sorry! Spoiler! No. But there's another thing to YouTube.
Hinmon: Better than me.
Southwick: It's going to make you feel a little bit better about the robot uprising. It's still a ways off if we can't get a robot to ski.
Rick Engdahl: Now we know how to get away from them.
Southwick: Right? You're right. It's all going to be James Bond skiing-down-the-mountain getaways and stuff.