Share Prices & Company Research


22 July 2019

March of the robots

It’s been around 20 years since the dotcom boom but the technology sector is still an ever-growing and now virtually all-embracing industry. Companies under this tech umbrella include online supermarket chain Ocado, food delivery company Deliveroo and digital transport app Uber.

And investment in innovations such as artificial intelligence (AI) is transforming the way these companies work.
Not long ago, this would have been a scene in a sci-fi film, but automated hands could be picking products in Ocado’s warehouses in the not-too-distant future. While human hands have traditionally been deemed the best tools for picking goods, the sophisticated robotic limbs being considered by Ocado will be capable of handling fruit and vegetables with minimal chance of damage.

Technology has, at times, been blamed for the loss of jobs within retail; for many years, automated supermarket checkouts have been replacing human cashiers, and the British Retail Consortium (BRC) said the number of roles in the industry could be reduced as much as 60% over the next 20 years because of developments in this arena. 

However, Tye Brady, chief technologist at Amazon Robotics, argues that resisting change will not help; instead, the relationship between humans and machines needs to change.

Amazon has debuted its Pegasus robot at the re: Mars conference in Las Vegas. Bright orange, two feet high and three feet wide, the creation is designed to help customers receive their orders even sooner. This is not to say that the robots are entirely running the show – the machines’ ‘traffic flow’ as they carry the parcels through the warehouses is monitored by humans to ensure all runs smoothly. Robots will never completely replace humans, said Mr Brady, but the ultimate vision is for a “symphony” of humans and machines. A further example of robots and people collaborating can be found at Walmart, where CEO Judith McKenna claims that mechanical floor cleaners have freed staff to focus on selling goods and providing customer service.

The healthcare sector is also seeing the impact of AI. In November last year AIM-traded health software provider EMIS Group, one of the four principal system suppliers to the NHS, announced the launch of a cloud-based platform, EMIS-X. When this product is rolled out, patient data will be moved to a cloud-based system and will give clinicians across the NHS a far easier way to safely share information. The group also announced the testing of voice recognition technology. This would use AI to ‘interpret’ conversations between clinicians and patients, turning them into medical codes. This would enable doctors to concentrate on the patient rather than spend time retrieving data from their computer. AI is likely to remain high on the healthcare agenda - last month, NHS chief executive Simon Stevens called for technology firms to share ideas on how AI could free up staff and cut waiting times for patients’ test results.

Investors seeking ways to take advantage of technology’s rise have various ways to do so. Investment trusts capitalising on the growth of technology include the Allianz Technology Trust, which is exposed to the likes of Microsoft and Alphabet, and the Polar Capital Technology Trust, with holdings in BAT stocks Alibaba and Tencent.
According to the McKinsey Global Institute, the increase in company productivity offered by AI could boost the UK economy by more than 22% over the next decade. However, the report warns that companies that don’t adopt AI as part of their day-to-day business risk losing around 20% of their cash flow. The message seems to be that resistance is futile and only by embracing innovation and new technology can businesses thrive.

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March of the robots
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