Robots and automation have the power to change the way we live and work but how can investors benefit from the rise in technological advances?
Richard Lightbound, partner and chief executive of Robo Global, which has created a benchmark index to track the performance of the robotics market, and an investment standard, said that investors and consumers “lived in an exciting era”.
Speaking to Ellie Duncan, deputy features editor of Investment Adviser, Mr Lightbound said we were “that generation which is watching robotics move from the factory to the broader economy and affecting our daily lives and the service industries around us”.
This made investment in robotics and automation exciting, he said, with medium to long-term growth opportunties, but he said it was also quite challenging in terms of understanding and tracking automation.
He said: “The sector is very broad. Investors need to understand just how broad it is and how many types of applications are involved.
“For investors, what is exciting is that same technology has been lifted out from the factory and taken into many other areas, such as distribution, warehousing, logistics, healthcare, new applications such as drones, autonomous vehicles and 3D printing.
“Therefore we think it is such a broad industry that it is too early to stock pick - there is too much change, and too many young companies.”
This is why he said the firm had created the index, as it was much better to take a broad, global, view of the industry, highlighting that a lot of institutions had licenced the index for different reasons, including an ETF in Europe.
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Mr Lightbound highlighted some interesting sectors such as logistics, warehousing and distribution, for short-term investing, as there has already been a lot of investment for efficiency in such sectors, which meant any robotic-type companies servicing these industries, would do well in the short-term
Healthcare, also, would do well, especially with demographics driving certain parts of this sector, such as long-term care, Mr Lightbound added.
However, he acknowledged there have been concerns about the human cost of advances in robotics, in terms of jobs and employment security.
Mr Lightbound said: “There is a bit of social debate around automation and robotics - it was a headline issue at Davos, for example.
“The industry has fallen into two camps: those who think it is good and those who think it is bad.
“I am in a third camp, I think there is a certain reality to this. Look at the big macro drivers, such as wage inflation, safety, productivity and output. These mean we need to embrace a new layer of technology in terms of robotics and automation.
“Automation, for example, could have big benefits across agriculture and healthcare for the whole of society. The big issue is how we adapt.”
eleanor.duncan@ft.com
