It’s time to prepare for the most significant technological change since the advent of the personal computer.#-ad_banner-#

It was predicted in science fiction books and film of the 1950s, and is already established in some industries.

Just as the automobile destroyed the horse-and-buggy business, this technology will forever alter the way we look at work and the economy. Currently valued at $100 billion, this industry is projected to quadruple by 2020, creating numerous opportunities for savvy investors.

Radical changes in the underlying technology are creating the next explosive growth sector. And investors with the foresight to jump on this trend could have a solid chance at significant, long-term profits. [My colleague Andy Obermueller explores exactly these kinds of finds, revealing the next big, life-changing investing idea in his Game-Changing Stocks newsletter.]

I am talking about automation and the robot revolution.

Here are the sparks igniting this explosive growth…

Declining costs
Industrial robots are getting cheaper and increasingly attractive to businesses. Lower costs for capital equipment and software in Asia, as well as advances in automation, are driving expenses to affordable levels.
Artificial intelligence innovations
This is the robot’s brain. The ability to process huge amounts of data is on its way to allowing robots to take on nearly human characteristics. More sophisticated sensors are fine-tuning robots to nearly mimic the human brain.

The shifting of relative capital and labor costs
Low-interest rates with the higher relative cost of labor have created demand for robots. In other words, a robot is becoming cheaper than keeping a human on the payroll. At the same time, many experts say more jobs will likely be created by the use of robots.

“The expansion of robotics is likely to mean a big boost in productivity and faster economic growth,” said Erik Brynjolfsson, a professor of information technology, and the director of the MIT Center for Digital Business at the MIT Sloan School of Management. “Over time, it also could create millions of new jobs, as computers and the Internet did in the 1990s,” he added.

Investors can explore traditional automation/robot opportunities with manufacturers such as iRobot (Nasdaq: IRBT), the maker of the famous iRobot vacuum cleaners, and Intuitive Surgical (Nasdaq: ISRG), which makes robotic-surgical instruments. In fact, opportunities in this booming niche market are deep and wide.

But my favorite niche in this arena is 3-D printing: A process that uses digital technology to make 3-D objects by layering material (usually plastic) into different shapes. It’s truly an amazing example of robotic technology.

I think Proto Labs (NYSE: PRLB) best exemplifies the potential in this new use of robotics. The company’s market capitalization stands at a little more than $1 billion, and recent fourth-quarter earnings shined.

Revenue of nearly $34 million and earnings of just above 30 cents a share readily beat the consensus estimates of 26 cents a share and less than $33 million in revenue. That was more than a 30% increase compared with the same quarter in 2011. Gross margin advanced from close to 57% to more than 62% year over year.

Shares of Proto Labs have sharply uptrended since mid-November 2012. A short-lived earnings spike pushed the price above $52 in February, with the price falling back but continuing the uptrend. I like this one as a breakout play with a close above the $50 level (as I’ve outlined in the chart below).

Note that Proto Labs doesn’t make 3-D printers; it offers 3-D printing services to companies without their own equipment. If you, as I do, think the 3-D niche will revolutionize the U.S. manufacturing, then other companies to consider are printer makers Stratasys (Nasdaq: SSYS), 3D Systems Corp. (Nasdaq: DDD) and ExOne (Nasdaq: XONE).

Risks to Consider: Robotics, and 3-D printing in particular, are emerging technologies with tremendous potential but also risk. There is no telling when something better will be invented or a hot new tech will be dismissed as a fad by the marketplace. Always use stops and position size properly when investing.

Action to Take –> Proto Labs is a good buy on a breakout close above $50. I find the growth projections in the 3-D printing niche to be the most compelling fact about this stock. With earnings per share expected to grow by more than 145% this year, 26% in 2014 and 30% in the next five years, I would not be surprised to see this company at $75 in the next 18 months.

P.S. — When you get in on the ground floor of a promising new trend or technology, the profits that can follow can change your life forever. Andy Obermueller’s Game-Changing Stocks is entirely devoted to finding the next big, life-changing investing idea. See his latest report for more ground-breaking investment plays.