As is often the case with its press conference events, Tesla (TSLA -1.41%) made a splash in August with its AI Day event, unveiling its work on a "humanoid robot" that could one day act as an in-person assistant for physical tasks. A working prototype could be out as soon as 2022. 

Suffice to say it could be at least a few years before Elon Musk and company's sci-fi-sounding pipe dream becomes a reality in the average person's life. However, a different type of robot is already available, quietly roaming offices around the globe and automating redundant tasks most of us humans despise. These software-based bots, known as RPA (robotic process automation), are one of the fastest-growing technologies around at the moment. And according to tech researcher Gartner, UiPath (PATH -0.49%) is the leader in this industry. Where will this top robotics stock be in five years? 

A diverse crowd of people in business formal attire.

Image source: Getty Images.

A brief intro to software bots

When I say "robots," perhaps your mind conjures up images of human-like companions like the one Tesla is building. However, RPAs are removed from any physical form or "body" and confined to a computer or network. That doesn't necessarily reduce the usefulness of this form of robot, though.

RPAs offered by platforms like UiPath possess some key functionality. They are trainable, meaning a developer can embed code that "teaches" them to perform a task. They also integrate with other pieces of software, for example a Microsoft (MSFT 1.22%) Word doc or some other business tool. They also need to be easily deployable, allowing a worker (including those with little to no software coding expertise) or developer to set them loose on a defined job. Some platforms, like UiPath, use advanced machine learning techniques to make them better at more advanced tasks. 

All sorts of office work can be handled by RPAs, like data entry, filling out forms, number crunching, and voice transcription and translation, to name just a few. Think of RPAs as virtual office assistants that dwell on your computer or device.

RPAs could be really important to the economy

Some might immediately fear that, just as technology has automated away certain laborer jobs, technology is coming for thought workers (or white collar workers) next. Perhaps, to a certain extent, it is.

As with all technological advancements, we will have to endure a transition period in which displaced systems and those that were assigned to work with them find new places in the economy. But something interesting has happened in the wake of the pandemic: Many businesses are reporting worker shortages, oftentimes for positions requiring highly redundant work. 

Debate is still raging as to the cause. Some cite extended unemployment benefits as a reason, but I think a flood of self-employment -- hastened by online software firms like Shopify (SHOP 0.65%), Fiverr (FVRR 0.84%), and (WIX 23.84%) that make it easier than ever to start your own business -- are a big reason why. As proof, I cite research from the U.S. Census Bureau that shows a massive spike in monthly new business starts, numbering in the tens of thousands every month since last spring. 

A line chart showing a nearly 50% increase in new business creation in the last year-and-a-half.

Image source: U.S. Census Bureau.

Long story short, now that workers possess new employment options like never before, I don't foresee a labor shortage in some areas of the economy getting better anytime soon. RPA platforms like UiPath could become an increasingly important "hiring agency" for many organizations, helping them automate those undesirable jobs no one wants so they and their employees can focus on higher-order critical thinking work. 

UiPath for the ultra-long-term?

As mentioned already, UiPath has been named as the leader in RPAs, and when it made its public debut early in 2021, it got a valuation to match that leadership. Unfortunately, even a stellar first-ever earnings report as a public concern hasn't prevented a 7% slide from that IPO price. Nevertheless, as of this writing UiPath is still valued at a market cap of $32 billion -- a whopping 37 times expected full-year 2021 revenue.

At this juncture, the steep price tag makes UiPath an investment suitable only for those with ultra-long outlooks -- five years, perhaps more. Granted, this is a fast-expanding business. Q1 revenue was up 65% from a year ago. However, the company's current outlook for 47% full-year 2021 sales growth implies a slowdown is in order. 

Not that anything near 47% annual growth is anything to balk at, but in the next few years there will be some notable competition in the RPA space. The omnipresent software giant Microsoft has its own RPA platform, for example. Given its massive scale and enviable ability to distribute its own digital tools (even if they aren't always best-in-class), the cloud computing giant is a noteworthy rival. The same Gartner report that named UiPath the current leader also shows Automation Anywhere as a top contender as well. The firm is private right now, but it could be considering an IPO. A myriad of other software peers have RPA offerings as well.

But let's not take too much away from UiPath's future prospects. RPA is already a sizable behind-the-scenes market worth billions in spending every year, and it's rapidly expanding. After its go-public offering, UiPath finished April 2021 with $1.8 billion in cash and equivalents and no debt. Bolstering its sales channels and innovating new uses for its software bots will no doubt be top priorities when choosing where to deploy all that capital. RPA is in its nascent stage of development, and UiPath's early lead won't be easy to replicate. 

Personally, I'm in no hurry to buy UiPath shares right this minute (I often wait for one or two earnings reports before dipping my toe in the water on fresh IPO stocks). However, RPA and related automation-enabling software could be a really big deal in five years-time. (Sorry, Tesla, your humanoid robot will have its day later on). There's more than a decent chance UiPath holds onto its lead and is a much bigger business then than it is right at the moment. At the very least, keep tabs on this emerging software technologist.