Increasingly flexible, responsive, sensing—even human-like—robots are beginning to augment and replace labor in a wide range of industries: a megatrend that is transforming the economics of manufacturing and reshaping the business landscape.

Already used to fight wars, remove dangerous land mines, and fill customer orders, robots can also clean, dance and play the violin; assist with surgery and rehabilitation, bathe elderly patients, measure and deliver medication, and offer companionship; and provide disaster relief, report the news, and drive cars. In short, robots can perform quite a few of the jobs that humans currently do—often more efficiently and at a far lower cost.

Because robots can sharply improve productivity and offset regional differences in labor costs and availability, they’ll likely have a major impact on the competitiveness of companies and countries alike. For instance, countries with a greater number of robotic programmers and robotic infrastructure could become more attractive to manufacturers than countries with cheap labor. Changes such as these will fundamentally alter the competitive dynamics of the global economy.

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