Robots aren't just for the big guys anymore.

A new breed of so-called collaborative machines—designed to work alongside people in close settings—is changing the way some of America's smaller manufacturers do their jobs.

The machines, priced as low as $20,000, provide such companies—small jewelry makers and toy makers among them—with new incentives to automate to increase overall productivity and lower labor costs.

At Panek Precision Inc., a Northbrook, Ill., machine shop, 21 shiny new robots hum as they place metal parts into cutting machines and remove the parts after they are done. It's a tedious and oily task once handled by machine operators who earn about $16.50 an hour.

One new robot doubled the output from a machine that was previously operated by a worker "because robots work overnight and don't take lunch breaks and they just keep going," says Gregg Panek, the company's president. In some cases, the robots, which are single articulated arms, can even hold a part while it's getting cut since there is no danger of injury.