Simply put, it’s the technology that enables a process to happen with minimal human interference or assistance. Zooming out, automation also describes the technological advances that allow machines to perform increasingly sophisticated tasks. The ultimate goal of automation is to increase productivity and efficiency, while minimizing errors, improving safety, and reducing labour intensity. In other words, one of automation’s aims is to replace low-skilled tasks, and in doing so free people up to do more complex and rewarding things.

Why automation is here to stay

Robotic police officers, parcels delivered by drones, flying taxis, and driverless cars would once have sounded like science fiction or a distant reality, but all these things are already in the here and now – and are prevalent in smart cities like Tokyo, Singapore, and Dubai. And that’s just the beginning: the entire world’s becoming more automated, whether in the manufacturing industry, the services sector, or in our very own homes. Automation is undeniably one of the biggest trends of this millennia: it’s no wonder the world’s largest investment manager BlackRock noted technological breakthroughs one of its investing megatrends. These advances make our lives more convenient, sure, but they also offer huge potential investment returns. ✨

What’s driving automation?

You are. We all are, whether we’re investors or consumers. Investors, naturally, make demands of the companies they’re invested in – and want to see them consistently grow their earnings. In response, companies – also battling against competitors – have looked to automation as a way of reducing costs and boosting profits. Consumers, meanwhile, demand ever-faster service and higher-quality products (partly thanks to the likes of Amazon and Alibaba raising expectations about what’s achievable as far as things like delivery times go), pushing consumer-facing businesses towards automation. And as income levels and living standards rise globally, there’s a greater demand – and ability to pay – for in-home automation services too.

Automation itself, of course, isn’t new. In manufacturing, for instance, the major trend of the last decade’s been a shift towards more mechanisation. And in retail, the disappearance of brick and mortar stores and the rise of ecommerce brings with it greater need for warehouse and logistics automation.

Can I profit from this trend?

Many high-profile institutional investors are already betting big on the potential of automation and robotics, and frankly there’s no reason you can’t join them. Technology advancing at an exponential rate makes investing in automation both exciting and risky. Nevertheless, we’ll dive into a few pockets of opportunity you might want to take a closer look at. 🔎