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Think of machine vision, and several thoughts come to mind. Those with a proclivity for science fiction will conjure up images of a utopian future where cyborgs use their mechanically enhanced vision to accomplish mundane everyday tasks with extraordinary precision. Although humanity is unlikely to realize this vision of the future anytime soon, the movement to empower machines with vision capabilities will likely continue to accelerate. Even the most adamant disbelievers and opponents of this technology have to admit that machine vision already plays a tremendous role in today’s global economy. So the question remains, do investing opportunities still exist, or has the ship already sailed?

Over the years, developments in advanced robotics have led to remarkable leaps in manufacturing efficiencies. Making all of this possible is machine vision, a technology that typically operates quietly behind the scenes and rarely captures front-page headlines. That said, without this vital technology, even the quickest and most advanced machine in the world would ultimately be bottlenecked by the limitations of its human operator.

Machine vision allows machines to see their work. Many factories these days have advanced machinery that is capable of churning out products at blazing speeds – often many times greater than what a traditional human worker can accomplish. These machines handle a wide range of tasks, many of which require vision of some sort. Barcodes need to be scanned to ensure a proper inventory, so that production materials can be reordered and replenished in a timely fashion. Machines responsible for moving and handling materials obviously need to have pin-point accuracy during the assembly and packaging processes. Even in the quality control stage, computers use advanced optics to analyze whether product parameters are within specifications, capable of capturing minute, but important manufacturing defects that the human eye might have otherwise missed.

Vision enables the full automation of many tasks by providing machines with the information that allows them to adapt to the variability that naturally occurs in the production process. In the majority of cases, the adoption of vision-enabled automation increases output while simultaneously lowering failure rates. This translates into drastically improved margins and higher-quality products.

Many companies have already jumped onto the automation trend, as the obvious top- and bottom-line benefits far outweigh upfront costs. That said, an even greater number of companies, especially those in developing countries, still rely primarily on human labor. For these places, cheap labor continues to outweigh the benefits promised by factory modernization. As the costs of advanced technology continue to fall, however, more companies will make the conversion in order to remain competitive. Well aware of this trend, companies offering machine-vision solutions, like Cognex (CGNX), have developed a full spectrum of products that cover a broad price range. This will provide potential customers with the flexibility to choose an affordable solution appropriate for their specific business needs.

Affordability was certainly not always the case however, as this promising technology once commanded an exorbitant premium for early adopters. Back in the 1980s, Automatix was the first to develop and market industrial robots with built-in vision capabilities. These were huge stationary pieces of capital equipment, and bear little resemblance to the humanoid robots that today’s scientists are racing around the clock to develop. Unfortunately, in the 1980s, these promising technologies were cost prohibitive. With slow demand, the budding industry experienced massive consolidation towards the end of the decade. Automatix was no exception to this, as it merged with Itran Corp., and was subsequently acquired by RVSI. In 2005, global heavyweight, Siemens (SI), acquired RVSI, and later sold it off in 2008 to its current owner Microscan Systems Inc., a member of Spectris plc. Throughout this market realignment, scientists continued to develop the technology, and with the dawn of the now ubiquitous digital camera, implementation costs have fallen precipitously.

Having established themselves as vision experts, companies that made it through the great consolidation, like Cognex, were able to take advantage of the growth in automation efforts within the semiconductor industry, and the survivors are equally well situated for the next wave of automation. Manufacturing centers in Asia and Latin America already have begun to see rising labor prices. As the cost differential between labor and capital continues to diminish, companies will eventually reach the threshold where upgrading to fully automated systems will be the more cost-effective course of action. Additionally, as average wages rise in these regions, consumer expectations for the quality of the goods purchased will also go up. The use of vision-enabled automated systems will allow manufacturers to attain and sustain this higher standard of quality over the long haul.

As has been true throughout history, as machines take over manufacturing jobs, negative sentiments and fear will rise among disgruntled employees. However, companies will be hard pressed to favor their line workers unless there are significant cost advantages to do so. This is unlikely to happen, as labor stoppages over wages and benefit concessions have been recently increasing in frequency across the world. If this trend continues, the divide at the negotiating table could grow wider, and companies may lean toward a mechanized workforce even more, despite the up-front costs. With increasing demand for vision-enabled machines likely to occur, companies  that specialize in machine-vision technology will probably experience an outsized benefit, especially as manufacturers look for proven external solutions that can minimize disruptions to their business. All told, affordable machine vision is here to stay, and its growth should accelerate in the coming years. Investors who agree with this forecast will definitely want to be along for the ride, as vision-enabled machines continue their steady march into the future.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.