The Economist writes on January 16, 2021 that "the pandemic has ushered more robots into factories, warehouses and back offices." and that "they are here to stay."
The article cites information surveyed from a variety of manufacturers and shows that the increase is marked for these firms' increase in digital consumer interaction and collaboration along with Artificial Intelligence and automation. So, in short, what does that mean for society and how will that impact investing into the future?
Society continues to find new and innovative ways to make our lives better with technology. The amazon effect on retail has translated into the destruction of brick and mortar. Many people are happier with this setup. For advocates of online shopping, they are spending less time doing these errands and more time on hobbies, with family, or able to do other things that they feel are a better use of their time.
Amazon continues to forge ahead with its use of technology, using robotics and artificial intelligence to improve the entire supply chain. However, if the article is to be believed, they are at the beginning and this trend will continue into the future. Some would be concerned that Amazon has destroyed jobs with the use of robots, but at the very least, there is some evidence that is not the case. Amazon Employee Growth shows that amazon is continuing to add employees within the firm. Indeed the jobs to build, maintain, and innovate such complex systems are undoubtedly higher skill jobs than packing boxes. This trend is exciting for the future.
Tesla, another high flying stock is producing large returns while showing that there continues to be lots of room for growth. Artificial Intelligence is often conflated with the concept of big data. And the two are certainly linked. That is, often sophisticated systems require large data sets in order to derive meaningful insights. For that reason, Tesla is far ahead of the curve, with many more millions of miles of data to feed their models than any other competitor. This data itself is an asset. If properly used, it could result in successful self-driving cars.
As exciting as all of these developments are, the question that remains is whether or not they are making things better. In a world after covid, will enough people be driving enough hours that this time recaptured represents a real benefit to society? Similarly, will the green technologies push the boundaries of what we're able to achieve to improve our overall well being. Obviously, investment gains do not always translate into overall well being.
As I consider companies that have real prospects of fundamentally changing their business models and deriving true exponential growth as a result of these technologies, I remain excited and optimistic about what these types of changes can mean for our quality of life over the longer term. But more important than the investment returns, to me, would be seeing a real translation of these things into improvements on important societal issues like income inequality, health care, climate and education. If we're smart, we'll be able to harness these forces to improve key areas in our society for all and in the end, produce a valuable result.
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