Humanoid robotics – the next evolution in automation – promises to decouple physical labour from economic output, creating a productivity explosion unlike anything we’ve seen before.
The sector could be the most important automation breakthrough yet and an investment opportunity that cannot be ignored.
Until now, automation has excelled primarily in highly specialised tasks – think industrial robots welding cars or assembling electronics. These robots, however, aren’t suited to tasks requiring human flexibility and versatility.
Humanoid robots change the game. Designed explicitly for generalised tasks, these robots mimic the human form factor and versatility, enabling automation of jobs in environments built specifically for humans – from warehouses to restaurants, from hospitals to hotels.
Current examples already emerging globally include Tesla’s Optimus, Sanctuary AI’s Phoenix, Figure AI’s Figure 02, and Boston Dynamics’ Atlas, each capable of performing increasingly sophisticated physical tasks across industries.
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The time for humanoid robotics has arrived due to three converging factors:
1. Breakthroughs in artificial intelligence (AI): Advanced large language models (LLMs), vision recognition systems, and neural networks now enable robots to understand, reason, and interact seamlessly with humans.
2. Rapidly declining component costs: Sensors, actuators, and compute power have fallen dramatically in price, significantly reducing the cost barriers to developing humanoid robots.
3. Massive global labour shortages: Countries globally face escalating labour shortages – particularly in developed markets. Robots capable of general-purpose labour could fill these critical gaps, providing relief and efficiency at scale.
Humanoid robots won’t just replace existing automation; they’ll create entirely new markets by converting unpaid household and informal labour into market-based, revenue-generating activities.
This is a potentially massive global revenue opportunity, totaling over $26trn:
· $13trn in household tasks (e.g. cleaning, cooking, caregiving), currently unpaid and unmeasured in GDP.
· $13trn in manufacturing and service sectors, enabling generalised automation at a scale previously impossible.
Productivity gains as labour decouples from output
Historically, automation has dramatically transformed industries. Even simple household robots, such as washing machines, reduced time spent on manual tasks by nearly 90%. Humanoid robotics promise similar, if not greater, productivity leaps across even more complex and varied tasks.
Our research highlights the potential for a transformative productivity uplift as humanoid robots begin handling tasks that are currently labour-intensive and expensive.
Historically, large-scale adoption of new technologies depends significantly on declining costs. We project that humanoid robots will experience dramatic unit cost declines over the next several years, similar to other transformative technologies.
As prices fall, adoption across industries will rise sharply, creating an exponential growth trajectory similar to past automation cycles.
Small businesses set to benefit disproportionately
Historically, large manufacturing companies had the advantage in adopting automation due to specialised robotic solutions that required significant upfront capital and precise, repetitive workflows. Smaller businesses, in contrast, typically lacked affordable automation solutions suited to their varied, generalised tasks.
Humanoid robots, however, represent the first broadly applicable automation technology that small businesses can realistically adopt. This could level the playing field significantly, enabling smaller enterprises to automate numerous tasks previously unaffordable to address through specialised machinery.
Given their inherent flexibility, humanoid robots offer small businesses the chance to dramatically cut labour costs and scale efficiently – thus disproportionately benefitting small-to-medium-sized enterprises.
Turning unpaid labour into measurable economic activity
Humanoid robots could significantly expand measurable GDP by automating previously unpaid labour, such as household chores and caregiving. Today, these activities are economically invisible – performed but not recorded as market activity.
In the US alone, the revenue opportunity for automating basic household tasks like dishwashing is roughly $250bn annually.
· Professional dishwashing at restaurants already counts as economic activity.
· Household dishwashing, currently unpaid, represents an enormous untapped market, potentially shifting billions into measurable GDP as robots handle these daily tasks.
Addressing global labour shortages and demographic challenges
The global labour force is shrinking, particularly in developed economies, where populations are ageing rapidly. Humanoid robotics present a compelling solution to fill critical labour gaps, particularly in labour-intensive fields such as elder care, hospitality, healthcare, and logistics.
In this sense, humanoid robots are not simply a productivity tool – they’re a demographic imperative, enabling sustainable economic growth amid demographic shifts that limit labour availability.
Redefining global productivity
Widespread adoption of humanoid robotics could lead to unprecedented productivity gains, fuelling significant GDP expansion.
By decoupling economic growth from human labour constraints, humanoid robotics will unleash a new era of efficiency and innovation, analogous to earlier industrial revolutions.
For businesses and investors, understanding and positioning for this tectonic shift will be critical to harnessing these transformational economic benefits.
Rahul Bhushan is the global head of index at ARK Investment Management
