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ROBOTICS AND TECHNOLOGICAL CHANGE

American Robot is one of the leading manufacturers of robots in the United States, founded by Romesh Wadhwani in the early 1980s. American Robot employed only 25 workers in 1982. Five years laterthe young company's work force had grown to 250,and in spiteof severe competition its sales had increased from $3 million to $20 million.

Wadhwani, an immigrant born in Bombay, India, assessed the potential market for robotics in the US. At that timethe competition was strong as there existed many robotic compa­nies, most of them Japanese firms. However,relatively few industrial contracts were available.

MeanwhileWadhwani also recognized that American Robot would have to overcome two obstacles to succeed in this highly competitive market. First,the company had to secure enough capital because it needed to finance an aggressive

marketing campaign. Second,the company needed to finance the research and development of a product so that it couldbe distinguishable from and superior to existing robots on the market.

In the first placeWadhwani secured financial backing from corporate giants such as Ford and BMW (Bavarian Motor Works). The money invested in these firms is called venture capital. Large companies often take a risk in promis­ing new business in order tobenefit directly from the techno­logical breakthroughs made by the new company as the investors expect a high return of the investment in return for - their money.

The next yearthe major attraction of American Robot a"second-phase" robotic system came into the market. Second-phased robotics is a computer-integrated manufacturing ■ (CIM) system, what is moreit involves the total automation of a factory, including administrative tasks.

By the mid-1980sAmerican Robot's CIM system, dubbed Merlin, has captured the imagination of major businesses worldwide. To begin withMerlins were the only American robots being marketed in Japan. In additionmajor European automotive producers, such as Volkswagen and BMW,were using Merlin to monitor different aspects of auto production. FinallyMerlins were being used by 40 of the world's top 100corporations.

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