Robotics presents strong investment case

The investment case for robotics, automation and artificial intelligence (AI) is much more diverse than currently realised and is still in the early stages of what will prove to be a long-term trend, according to index developer and research company ROBO Global.

Speaking at an ETF Securities webinar, Jeremie Capron, ROBO Global director of research, said robotics wasn’t a niche and it was a general-purpose technology that could be applied to every market and industry much in the same way the internet had been.

“We think we are in the early stages of a technology shift that offers tremendous investment opportunities,” Capron said.

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Capron said the biggest problems investors had was choosing stocks in the sector, understanding its diversity and staying on top of developments, so there was a strong case for using a managed fund or exchange traded fund (ETF).

Kanish Chugh, ETF Securities head of distribution, said the world was entering one of the most transformational periods in robotics, automation and artificial intelligence.

“Robotics is no longer a niche theme but rather a foundational technology that will soon be applied to virtually all industries and markets,” Chugh said.

“The investment opportunity here is significant and if captured correctly the growth prospects from companies within the industry is huge.

“We believe it is important for investors to ensure their portfolios have early exposure to this theme.”

According to Capron, some of the advances in the sector included:

  • Advances in sensing combined with precision technology had opened up the field of robotic surgery. In the near future, AI would be deployed to enhance diagnostics and analyse patient data and clinical trial data;
  • 5G was leading to a number of “smart city” developments, such as cloud-based traffic control;
  • In agriculture and food production, facial recognition systems were being tailored to analyse plants for their level of hydration and their need for fertiliser and pesticides;
  • More advanced cleaning robots were playing an important role in supporting the aged;
  • In the energy industry, robots had been developed to inspect and maintain power lines.

Capron said over the past decade performance capabilities had reached a high level and the costs were coming down, so there was an explosion in the range of potential applications.

“We have the data centres that can process enormous amounts of data in milliseconds, and we have the communications networks that can deliver intelligence to machines wherever we need them,” Capron said.

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