W H I T EP A P E RS E P T E M B E R2 0 2 5 Contents Foreword3 Executive summary4Introduction51What’s new: Breakthroughs in intelligent robotics61.1Technological breakthroughs redefining robotic capabilities61.2Enhanced capabilities enabling end-to-end automation71.3Limitations yet to be resolved102Where it is working: Frontier applications112.1Revolutionizing the manufacturing value chain122.2Spotlight on the pioneers – transformation journeys13of early adopters3How it scales: Technology platforms and partnerships163.1The new physical AI technology stack163.2Strategic partnerships are essential174Who leads it: Empowering the new industrial workforce184.1A target picture for robotics and workforce development184.2A shift in skills and roles184.3The new workforce imperatives20Conclusion: Time for action21Contributors22Endnotes25 Disclaimer This document is published by theWorld Economic Forum as a contributionto a project, insight area or interaction.The findings, interpretations andconclusions expressed herein are a resultof a collaborative process facilitated andendorsed by the World Economic Forumbut whose results do not necessarilyrepresent the views of the World EconomicForum, nor the entirety of its Members,Partners or other stakeholders.©2025 World Economic Forum. All rightsreserved. No part of this publication maybe reproduced or transmitted in any formor by any means, including photocopyingand recording, or by any informationstorage and retrieval system. Foreword Daniel KuepperManaging Director andSenior Partner, BostonConsulting Group (BCG) Kiva AllgoodManaging Director,World Economic Forum Amid mounting global pressures – from economicvolatility and geopolitical disruption to growingsupply-chain complexity, and labour and talentshortages – industrial operations are entering atransformative new phase. While these challengesare not new, heightened uncertainty has significantlyintensified their impact, forcing a fundamentalrethink of how work is organized, executedand scaled. Economic Forum’s Next Frontier of Operationsinitiative in collaboration with Boston ConsultingGroup – builds on a tradition of strategic foresightand multistakeholder engagement to chart a boldpath forward. The insights presented here draw on the collectiveexperience of global manufacturers, roboticsinnovators and leading academic experts.Grounded in real-world use cases and, moreimportantly, the transformation journeys theyrepresent, the paper explores how physical AIis reshaping operations, enabling new forms ofhuman–machine collaboration and unlockingproductivity at scale. At this inflection point, a new era of industrialautomation is emerging – powered by physicalAI. These intelligent robotic systems combineperception, reasoning and action, enabling a levelof autonomy and adaptability that marks a criticaljuncture in industrial automation. By bridging thedigital and physical realms, physical AI promises toreimagine how industrial systems function – fromfactory floors to supply chains. But this transformation is not solely abouttechnology. It also requires the industrial workforceto be equipped with new skills to collaborate withintelligent systems and take on emerging roles. Weinvite all stakeholders – including manufacturers,policy-makers, researchers and technologists – toengage with this agenda. Together, through boldand coordinated action, we can shape a future inwhich intelligent automation drives inclusive, resilientand sustainable industrial growth. As physical AI becomes increasingly viable andstrategically essential, industry leaders are seekinga deeper understanding of how to make useof these innovations for sustainable, long-termcompetitiveness. At such a pivotal moment,this white paper – developed through the World Executive summary Technological breakthroughs are pushingthe boundaries of automation – tasks thatwere once too variable or cost-prohibitiveto automate are now both technicallyfeasible and economically viable. Automation is expanding opportunities across theentire industrial value chain. Early adopters arealready achieving significant results. For example,Amazon, operating the world’s largest roboticsfleet, has demonstrated how the integration ofmobile robots, AI-based sortation and generativeAI-guided manipulators can improve fulfilmentcentre performance. By orchestrating theseautonomous systems, next-generation facilitieshave realized 25% faster delivery, 30% more skilledroles and a 25% boost in efficiency.3Similarly,Foxconn applied AI-powered robotics and digitaltwin simulation to automate high-precision taskssuch as screw tightening and cable insertion,previously considered too complex for automation.Through real-time adaptive force control andsimulation-based deployment, it cut deploymenttime by 40% and reduced operational costsby 15%. Although traditional industrial robots arefoundational to automation, they have long beenconstrained by limited adaptability and highintegration co