Invest
Will COVID-19 speed up automation and digitalisation?
Investors who are taking a long-term view in disruptive processes are getting market-leading returns in products that could be accelerated due to the COVID-19 outbreak, an industry expert has said.
Will COVID-19 speed up automation and digitalisation?
Investors who are taking a long-term view in disruptive processes are getting market-leading returns in products that could be accelerated due to the COVID-19 outbreak, an industry expert has said.
During a recent video of the ETF Securities partner series, ROBO Global director of research Jeremie Capron and ETF Securities head of sales Kanish Chugh explained that investors in new technologies are outperforming global equities.
“The fact we invest in disruptors that are likely to gain share coming out of this crisis and the market is perceiving this to some extent especially in the areas of AI, automation, enterprise software and healthcare technologies.
“In short, the companies we are focused on are part of the solution. When you take a longer-term view, it is pretty clear that digitalisation is going to accelerate on the other side of this crisis,” Mr Capron argued.
Mr Capron explained that investment based around technology could see a faster adoption due to consumers seeing the advantages while being stuck indoors.
“A good example of that is what is happening around logistics and around warehouse automation.
“As you know, people being confined, e-commerce has seen a step-up increase in terms of utilisation,” Mr Capron said.
This is creating an enormous strain being put on the logistical aspects of e-commerce, which could lead to an increase in technologies being used, the fund manager said.
Mr Capron highlighted that Zebra Technologies “provides the track and trace technology that is used throughout the e-commerce chain, or Manhattan Associate that provides the software that is behind warehouse management systems”.
Mr Capron believes investors should take advantage from a valuation point of view of falling prices in the industry, even if it has been less affected by COIVD-19 than the overall market.
“This is probably the most important technological revolution for our generation. I think robotics and AI are not a niche. It is really a set of general purpose technologies that can be applied to all markets and all industries, and it’s happening now.”
“I say it’s one of the most important technological revolutions, so that you think about it as what happened to the internet in the last 20 years.
“When you think about what that created in terms of wealth, it is just enormous. I think we are on a similar pathway with robotics and automation, and this crisis is probably going to act as a catalyst for faster adoption going forward,” Mr Capron concluded.
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