Covid-19 Impact on Robotics & Automation Business - Britbots

Britbots is a specialist UK based pre-seed an investment fund, investing in 10 new pre-seed companies per year. We invest in companies using artificial intelligence, robotics or other automation technologies to develop productivity gains and are typically the first external investor into a business.

If you are an entrepreneur looking for pre-seed or seed investment in the automation, artificial intelligence or robotics space please email alex@britbots.com

The Pandemic has created a seismic shock to the way in which businesses carry out their work, at least in the short-term. We believe that this will impact the adoption of automation technologies over the forthcoming months in three main ways:

1. Accelerated innovation in certain areas: Business decision-makers are rapidly trying out new approaches to business-critical activities, which they previously may have delayed or dismissed. Automation is one such approach. Indeed, in a March 2020 survey conducted by EY, 77% of business leaders said that Covid-19 was forcing them to re-evaluate or take immediate steps in relation to the speed of their businesses’ adoption of automation. In the UK, this transition is likely to be further exacerbated as the Government’s furlough scheme ends and businesses face the choice between bringing back staff and moving to higher levels of autonomy.

2. De-personalisation of work: Soft issue issues such as the emotionally-charged decision to replace jobs with robotics have typically proved to be some of the strongest impediments to technological adoption. However, following several months of social distancing, the de- dersonalisation of business processes is now seen in a more positive light. In the workplace concerns over health and safety are paramount; whilst on consumer side, the desire for the “personal touch” of human service has been trumped by a fear of viral transmission.

3. Automation as a counter-cyclical investment theme: The economic contraction which the Pandemic has induced is also potential likely to encourage the adoption of technology by companies in some cases. Automation’s infiltration of the workplace doesn’t occur at a steady pace. Instead, it happens in bursts, concentrated especially in bad times, such as in the wake of economic shocks, when humans become relatively more expensive as firms’ revenues decline. At these moments, employers shed less-skilled workers and replace them with technology that can be overseen by a much smaller number of higher-skilled workers, which increases labour productivity as the recession tapers off. This is currently particularly valid because new automation technology is increasingly cheap relative to labour. According to a study by Jaimovich and Sui that analysed recessions in the last 30 years, 88% of job losses took place in routine, repetitive occupations, suggesting that automation substituted the vast majority of jobs lost in the crises.