Editor's note: This interview has been recorded and published as part of a content project in collaboration with the Japan External Trade Organization (JETRO).
Esben Østergaard is a prominent figure in the Danish robotics ecosystem. Back in 2005, he co-founded Universal Robots, which became a pioneer in building collaborative robots, or cobots, and was acquired by Terradyne for $350 million. A few months ago, Østergaard stepped down as the CTO of Universal Robots to focus on a new project, REInvest Robotics. In a conversation with tech.eu recorded at the Digital Frontrunners conference in Copenhagen, he talked about his entrepreneurial career, the global robotics landscape, and the future of VC funding in this industry.
The interview has been edited for clarity.
Q: Who are you and have you been doing over the past years?
A: I'm a curious nerd. I was always interested in technology and changing the world; I didn't take the most obvious career choices in my life, but at some point, I was working at a university here in Denmark, and I decided to start Universal Robots together with a few other people. We wanted to make a robot that was easy to program and move around, but also easy to be around for people.
We spent some money and some years building the robot, we ran out of money, we got more investors on board, we sold part of the company, the company grew, we managed to start selling the robots, then the company grew a lot — and four years ago we sold it for around $350 million to a US-based company called Terradyne. After that, I'd been working still as the CTO at Universal Robots, but I quit my job a few months ago, and now I'm a doing a lot of things
Q: What's a cobot, and how is it different from a robot?
A: The industry at the time we started the company was characterised by these big heavy robots that were very good at welding car bodies together. Robotics grew up in the automotive factories and became a popular technology there, but we saw a need for another kind of robot, which was more flexible and understandable by humans. Not all companies are automotive companies — there are a lot of small ones that have a quicker changeover of what products they're producing, and they can't handle these big unwieldy machines very well.
There was a need for a new kind of robot. That's what we wanted to make with Universal Robots and that has since grown into an entire industry with 150 models of similar robots. This new industry is called collaborative robots, or cobots.
Q: Are there any particular industries in which these collaborative robots are mostly being used?
A: The cobots are used in all sorts of industries. We initially intended them for small and medium-sized companies that had to change the production frequently, but it turns out that even the big automotive companies have this need for flexibility of their manufacturing equipment. We've also recently seen the cobots being used in new industries that wouldn't traditionally employ robots such as hospitals, logistics, restaurants, entertainment, a lot of others.
Q: How hard was it for you as a hardware company to grow and develop in Denmark?
A: It was pretty hard to grow a company because making hardware requires more money and also different type of skills than if you make a pure software product — like supply chain management, quality control, and so on. It's a different kind of people, a different kind of team, a different perspective and timeline — and also the amount of money you need to put into it to make it sustainable.
However, I don't think in Denmark it was particularly hard. Denmark has a long history of producing machines, like windmills, pumps, thermostats, and a lot of other equipment, including ships. It is a machine-building country, so it was a good place to make this kind of a startup.
Q: What's the industry like right now in both general robotics and collaborative robots?
There is uncertainty in the financial markets, which means that big companies are often reluctant to invest in new manufacturing technology, so there's a small dip right now.
But if you take a broader view, there's a huge potential for growth. The traditional robot industry has grown 30 percent year-over-year over many years, and the collaborative robot industry has grown at anywhere from 80 percent to 100 percent year-over-year. We're witnessing an explosion of new robot companies, technologies, and solutions.
And it's not only manufacturing. More and more new industries are beginning to adopt robot technology. We see a lot of drone technology; self-driving cars are also part of this industry — there is huge potential for growth in the future for robotics.
Q: And if we look at the global scale, are there any particular countries that would be leading the effort?
A: Some countries are really focused on robotics. China has an ambitious plan of becoming one of the world leaders in robotics by 2025, they have robots as one of the top five priorities. It has been downplayed a little bit recently because it was misused by some of the companies in the country to basically get money from the government. But the government is still pushing hard to become a robotics hub. Also, Japan has very strong robotics, and Korea as well. Both the EU and US are also pushing robotics a lot — so there's a big push everywhere.
Q: Do you feel a lot of support from the government in Denmark?
A: There's certainly a willingness to help. Personally, I'm not a big believer in too much help from the government. I think the industry can help itself, but of course, having good universities and lawmakers willing to listen to the problems of new types of businesses around robots .
For example, drones have been hindered by many years: in the US, it's not allowed to fly a drone if you couldn't see it, and that of course limits the applications for drone technology. So, we want the lawmakers to open up a little bit and be more pragmatic on how to adopt this new technology without being unethical.
There needs to be a balance between allowing the technology to fulfil its potential but also taking care of the society. I think that one of the main things our country can do to help is to be willing to listen, and learn, and adapt to the benefits and also the risks of new technology.
Q: And what are the main ethics challenges for collaborative robots?
A: What's for sure challenging for cobots are the standards and norms for robot safety. The traditional way of dealing with it has been to completely fence robots away and not have people and robots mix, which is of course a crude way to do it, but it works. It also removes a lot of potential for collaboration, however, because clearly robots are good at some things and humans are good at some other things, and if you don't have a fence, you can combine the strength of humans and robots. We had to deal with navigating this and “breaking down” the fences of traditional robot cells.
Q: How hard is it to ensure that the interaction between the cobots and people will be as safe as possible?
A: It's not very hard. However, you can always get hurt — if you drop a hammer on your foot, it hurts a lot, and similarly, a robot may also tip because it wasn't bolted correctly and hurt a person. You can also have a robot with a sharp tool or workpiece, and wrong handling of the parts will create a hazardous situation. So, the bottom line is that you have to do a risk assessment and use common sense.
In addition to that, a lot of cultural and emotional acceptance of dealing with all these hazards is involved. Do we want robots to be much safer than a door we walk through? You can really hurt your fingers in a door, and most kids have done that. So how safe should a robot be compared to doors, and stairs, and traffic in general? How many accidents can be accepted what is acceptable? Is it acceptable to get a bruise once in a while? Or should the robots be pain-free or injury-free? That's difficult to answer right now.
In Europe, the law says that the machines should be safe. There are a lot of standards describing how to make them safe, but standards are not laws — they are ways to make the machines safe, which are commonly agreed upon by a lot of people. So, in principle, it's okay to try finding a new way, which is not written in the standards. And there's a reason why it works like this: if you wrote everything into the law, you could not innovate, you couldn't evolve, you would be stuck with the technology we have today.
Of course, creating new ways of thinking is sometimes difficult, especially in regards to safety. The general consensus is that we start very carefully and conservatively and hope that the innovation will be adopted and grow from there.
Q: Let's move to your current position. What is REInvest Robotics?
A: We sold Universe robots around four years ago, then I had still worked there for a couple of years, and then I decided it was time to try to do something new. So, my wife and I started a company together, where we want to do something good for the world. I personally strongly believe that there is a lot of good to be gained from technology. I believe humans have a right to be on this planet, I believe we should help humankind as much as possible through technology, and I strongly believe that we can do something good with robots to help humanity.
That's why we have created this kind of technology accelerator, REInvest Robotics, that wants to invest and help robot companies to become more successful, especially the ones that have some kind of positive social aspect. We also have a setup where half of all the earnings goes to a charity.
Q: Are you mostly focusing on Danish companies?
A: Not really; so far, we have invested in one non-Danish and one Danish company.
Q: Is there any particular part of robotics that you're focusing on?
A: We looked at the UN goals, and we think that education is very important for humanity to move forward. But there are also many other problems that we can solve with technology, so we don't limit ourselves.
We also believe that a company has to be a business; if you just do good things with technology, but it's not a viable business, then it won't scale and won't grow. We have this belief in doing good and doing well at the same time with getting a return on our investments, and then use the money we earned to do more good and well and accelerate the humanity that way.