Posted: August 1, 2015 |  AUTHOR: KEN FOX | CONTACT ME

 

Image: The head of humanoid robot called Pepper

Softbank is not a bank. The company is a publically traded, large Japanese telecommications and internet conglomerate. It had annual sales of $64.8 billion in 2013. Softbank represents innovation in developing humanoid robots, which is especially useful in Japan’s shrinking population and need for more  healthcare workers.

Japan’s population is now 127 million, but expected to decline to 124 million in 2020. This decline is a reflection of Japan’s low birth rate and aging population. Japan severely limits immigration and this reduces the eligible healthcare workers to care for the elderly in nursing homes and similar settings. Japanese regulations allow a limited number of immigrant healthcare workers from countries such as: South Korea, Indonesia, Vietnam and The Philippines to work towards long term residency status. However, it places harsh restrictions on these potential healthcare workers. They must learn Japanese in 3-4 years, or they are sent back home. Additionally, any previous healthcare training or credentials earned are not recognized in Japan. However, the Japanese government is quietly recruiting students and trainees from other Asian countries, especially those with Japanese heritage or technical skills. 

In addition, there is an anti-immigration attitude among the Japanese population. Their country is in a depression and a declining and aging population means less workers. Government funds are being used to care for the nation’s elderly population, and this is where Pepper and Robots like it are needed and can be helpful.

Pepper was developed by Softbank’s French subsidiary Aldebaran Robotics, and manufactured by Foxconn (which also assembles the iPhone for Apple). Pepper was developed for and is sold by Softbank Mobile, one of the largest phone operators in Japan. Pepper is already greeting and interacting with customers in stores. Pepper’s price was about $1,600 when introduced on June 20, 2015. Amazingly, Softbank sold out its entire stock of 1,000 Peppers in the first minute of sales. Another 1,000 units went on sale July 31, 2015 at a cost of $1,650 each (available only in Japan).

The company claims Pepper is the first robot capable of understanding and reacting to human emotions. The four foot (121 centimeter) tall, white plastic robot can recognize human voices, read facial expressions and body language. The company also claims Pepper can carry on conversations.

Hear Pepper speaking Japanese and interacting with customers at a Softbank Retail Store

The manufacturer claims Pepper can determine what state of mind a person is in using its knowledge of universal emotions, such as: joy, surprise, doubt and sadness. It also has the ability to analyze facial expressions, body language and words used. Softbank claims Pepper will guess your mood and even adapt to it. For example, Pepper will try to cheer a person by playing your favorite song. This sounds great for taking care of the elderly when there is a shortage of help.

The Japanese government designated millions to incent companies to address eldercare robotic development. Initial results were not promising, such as Paro, a touch reactive electronic “seal” developed to keep dementia patients occupied. After initially selling for $6,000 and lowered to about $3,000 by 2011, many healthcare workers and nursing homes found their patients were not very engaged with the robot seal. Recent years have shown much improvement in robots to benefit the healthcare worker shortage. Pepper’s development represents a breakthrough in the ability of robots to connect to patients and people.

Another Japanese designed robot is being developed to help lift and transport patients, which can  help reduce caregiver back injuries.

Another humanoid robot developed by Toshiba, includes an attractive talking young woman, Chihira Aico. These robots can help keep Japanese elderly and sick patients stay busy, alert and stimulated without the need for human healthcare interaction.

These and others robots being developed can help provide the elderly with a reasonable level of attention and mobility. These early successes have helped stimulate global interest in the eldercare robotics market.

Softbank Growth Activities

Softbank has been on an acquisition, joint venture and global expansion path. Some of these activities include:

  • Buying an 80% ownership in Sprint for $21.6 billion in late June 2013.
  • Forming a joint venture with Alibaba and Foxconn to produce and distribute Pepper and future products globally. Alibaba and Foxconn will each invest $118 million for a 20% stake in a robotics joint venture, with Softbank being the biggest shareholder with 60%. (June 2015). 

I think no matter if you like it or you don’t, robots they are going to be as popular as cars, as machines, as airplanes.”

Jack Ma, Alibaba Group Executive Chairman, Foxconn CEO Terry Gou and Softbank CEO, Masayoshi Son

  • Investing $20 billion in a joint venture, SBG Cleantech LTD,  for renewable energy in India. It includes a joint venture with India’s Bharti Enterprises and Taiwan’s Foxconn Technology Group. It aims to generate 20 gigawatts of electricity, mainly through solar and wind energy.
  • Teaming Softbank’s Telecom with IBM (February 2015) to bring IBM’s Watson technology to Japan. Watson is an artificial intelligence computer system capable of answering questions posed in a natural language. IBM is seeking Softbank’s help in developing a range of cognitive computing capabilities. These include applications for next generation robots, such as: automating teachers’ assistants in a classroom to answer student questions, and using robots in patient care settings.
  • Buying a 51%  stake in A Finnish mobile games company Supercell for $1.5 billion (October 2013). Supercell makes best selling games such as: Clash of Titans and Hay Day.

Aldebaran is already developing a next generation humanoid robot, Romeo, specifically for the eldercare market. Romeo will have these initial objectives:

  1. ensure patient safety, e.g., have they fallen and taken their medicine
  2. facilitate social interaction, e.g., reminding people of their appointments, remember people’s interests and making introductions
  3. offer physical assistance, opening doors, climbing stairs and grabbing objects off a table.

Commentary

Robots are increasingly being used for a myriad of new applications. Some exotic examples include a singing opera robot in Berlin, and acting as jockeys at camel races in Abu Dhabi. So, why not an interacting robot for the aging population? According to the United Nations World Population Aging Study, 2013, the number of older persons (aged 60 and over) is expected to more than double from 841 million people in 2013 to more than two billion in 2050. Japan is facing a compounded problem of a very large proportion of older people and a limited workforce to care for them.

Softbank vision is farsighted. The company also realizes its growth will come from outside Japan. However, it has responded, as a good corporate citizen, to Japan’s healthcare shortage. The development of Pepper represents an innovative step in helping relieve (not necessarily to resolve) this problem. The world is taking notice as other organizations outside Japan are developing advanced robotics for human interaction.

Softbank’s partnering with Alibaba, Foxconn and IBM foreshadows an increased presence of robots globally to communicate, console, transport and educate humans in new ways. This especially represents tremendous potential for developing or poor countries where education and literacy rates are low.

Resources:

  1. Why Robots Are The Future of Elder Care, by Mark Hay, Good, June 24, 2015.
  2. Can Immigration Save a Struggling, disappearing Japan?. Fortune Magazine, November 20, 2014.
  3. Robots Cannot Solve Japan’s Big Problem, Forbes, September 21, 2014.
  4. Softbank, Alibaba, Team Up on Robot, The Wall Street Journal, Alexander Martin, June 18, 2015.
  5. IBM’s Watson Turns Japanese and Moves Into Robots, Quentin Hardy, New York Times, February 19, 2015.
  6. Sprint Shareholders Approve Sale to Softbank, Michael de la Merced, New York Times, June 23, 2013.
  7. At Softbank and Alibaba, Robots are Family, Alexander Martin, Wall Street Journal, June 19, 2015.
  8. Softbank’s Robot Sells Out in a Minute, The Wall Street Journal June 23, 2015.
  9. How Contact and English Proficiency can help Japan’s immigration policy, David Green, www.eastasiaforum, March 25, 2015.
  10. Who is Pepper? Aldebaran website
  11. Softbank buys $1.5 billion stake in Finnish mobile games maker Supercell, Reuters,   Oct. 21, 2013.
  12. Brisk Sales for Pepper, but Romeo is Primed to be the First Hit Humanoid, ZDNet, July 10, 2015.
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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, www.thesoundingsgroup.com. The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.

 

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