GOVERNMENT incentives and subsidies have been the driving force for a variety of industries all over the world.

Without subsidies, a lot of industries, such as robotics engineering, could raise the capital to commercialize their operations and enter the market.

Simply put, it is the building block for many innovation and automation efforts — from the expansion of infrastructures to tax exemptions. In fact, in China, the subsidies rationed by the government have an impact on the overall net profit – precisely at 20 percent.

However, prolonged dependence on incentives and subsidies can be heavily disruptive on overall progress and independence in the long run. Despite the challenges that the digital wave presents, China must leverage robotics engineering without government aids.

More importantly, capital should be generated from market activities itself as the cost of research, development, and production far outweigh available aids. This, among other insights, was expressed by a Chinese robotics expert who foresees a weak link between continuous dependency on government incentives and robotics innovations.

China, the world’s largest robot market, has recently announced plans to locally manufacture 100,000 robots annually by 2020. Naturally, these plans are backed by government aids which are exciting for industrial engineers and startups.

Revenues may seem promising and lucrative now, but soon enough, progress will be stagnant and the margins will be down due to overproduction and low-value production. This can be factored by companies failing to identify and benefit from their strengths.

As more businesses ride the wave of robotics innovation, the competition will decrease and quality of production will plummet – further worsened by the trade wars. Further, many companies are solely relying on government grants and funds in order to operate, which is counterproductive.

Funds may not meet expectations and approvals may not be aligned with production plans, so such dependency is only disruptive to their workflows. Even worse, the “stalling” may result in missed opportunities to innovate and keep up with the market’s needs.

While subsidies are made available to fuel innovation efforts and speed up digital transformation, it is becoming more evident that a large number of operations are exploiting the aids. By eliminating incentives, China can better mitigate manipulation within the industry.

Not only that, the overall ecosystem of the industry can be improved once aid-dependent and slow-moving companies are no longer influencing the market. This further highlight how China needs to better regulate copyright laws and intellectual property protection policies to motivate both, innovators and investors.

Another perspective to consider, suggested the expert, is the collaboration in research and development between academics and innovators to create the best industrial robotic solutions.

In many ways, learning institutes promote different uses of robotics compared to industrial innovators, creating a gap between the two. The collaboration will increase product quality and bridge the knowledge gap, resulting in more progressive innovation efforts.

Ideally, this will not only foster local partnerships but also boost productivity and market value.

Government efforts are definitely important to support digital transformation and foster an innovative nation, but without independent efforts, original thinkers, and effective funding efforts, industrial robotics engineering will not be able to move forward.