In an earlier commentary, we discussed the potential of 5G, providing a perfect springboard into the discussion of Artificial Intelligence (AI) and automation. While 5G, AI, and automation are completely different, they have a symbiotic relationship: 5G is the network that will allow vast amounts of data to be shared rapidly – exactly what is needed for AI to be effective evolve as a technology to refine automation.
The perception of AI among the general public is still formative. In a 2019 survey, only 46% of respondents felt “they have a strong understanding of AI.” And of that 46%, the majority associated the technology with robots and self-driving cars.[1]
While those assumptions are not entirely unfounded, they are a bit surprising. Few of us have self-driving cars and we assume that even fewer of us live with a robot. On the other hand, a majority of us do use Siri on the iPhone, watch Netflix, bank online, and have made purchases through e-commerce companies such as Amazon and Wayfair – all of which use AI and automation in one form or another.
The issue of AI-enabled machines and devices will most likely continue to draw different opinions from consumers, especially as we welcome the technologies into our homes. But it’s the technologies’ impact on businesses and entire sectors that interests us most at Reynders, McVeigh.
Prior to COVID-19, the proliferation of AI and automation offered promising benefits in terms of efficient production with less environmental damage. In agriculture, for instance, AI and automation have the potential to significantly enhance the way we produce and cultivate food. By optimizing seed planting, fertilization, and irrigation the technologies can increase yields considerably while simultaneously reducing the sector’s negative environmental impacts from water waste to carbon emissions, which according to the EPA, accounted for 9% of all US emissions from 1990-2017.
In the context of the current COVID-19 environment, it is already clear how the pandemic is accelerating AI and automation – from telehealth and commuting to digital payment processing. But more importantly, we are experiencing the benefits of AI and automation in healthcare.
AI is currently being used to predict the spread of COVID-19, offering assistance, and proper allocation of resources for healthcare providers and governments. It is also being used to find new molecules capable of treating novel coronavirus as well as crunching immense pieces of data to analyze computed tomography (CT) scans to identify infected patients.
Looking toward the post-pandemic world, projections show that key clinical health AI and automation applications can potentially create $150 billion in annual savings for the US healthcare economy by 2026.[2] Beyond the efficiencies and cost savings, we believe that leaders in healthcare will be those that enable better interaction among patients, providers, and payers. We see AI as a solution to facilitating more fluid communication and collaboration across the healthcare ecosystem, ultimately alleviating the tremendous strain the industry is currently under for the benefit of the business and patients.
AI and automation have offered an intriguing investment avenue for quite some time, and as we have been able to witness in real-time, these technologies can improve peoples’ lives, our world, and contribute to a more resilient economy in the future.
Disclosure: This material is proprietary and is produced by Reynders, McVeigh Capital Management, LLC (“RMCM”) for educational and informational purposes only. This should not be construed as a research report, a recommendation, or investment advice, and should not be relied on as such. The opinions expressed in this material are subject to change and represent the current, good-faith views of RMCM at the time of publication (June 2020). All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed, and RMCM disclaims any duty to update any of the information and data contained herein. Certain statements may be deemed forward-looking, but any such statements are not guarantees of any future performance and actual results or developments may differ materially from those discussed. There is no guarantee that investment objectives will be achieved or that any particular investment will be profitable. Past performance does not guarantee future results.
[1] https://www.blumbergcapital.com/ai-in-2019/
[2] https://www.accenture.com/fi-en/insight-artificial-intelligence-healthcare