Artificial intelligence (AI) and automation present enormous investment opportunities, some in ways we don't even know yet. As the world adapts to technological advances, Franklin Templeton Emerging Markets Equity's Sukumar Rajah and Eric Mok think some promising developments in Asia could dictate the pace of change in the burgeoning AI market. Alongside this, they think infrastructure for new technology is likely to be just as significant if AI development is to truly thrive. They take a look at the implications for the region.
As the race to harness new technology heats up across the globe, we've already seen signs that Asia is at the forefront of integrating automation into our everyday lives.
Asia, generally perceived to be the “factory of the world,” accounts for 65% of the world's total industrial robot usage in manufacturing.1 In our view, such a sizable investment in robotics to power an already established industry signals that change is already underway. And with further technological developments on the horizon, we expect machines to take over even more aspects of manufacturing in the near future.
The advent of what some have dubbed the “fourth industrial revolution” builds upon the foundations of the last groundbreaking period of digitization to integrate technology into almost every aspect of our lives.
It won't just bring technological innovation, though. The current speed at which we discover breakthroughs is unprecedented, and we think that could provide ample opportunity for Asia to tap into the AI market, as we've already seen the region harness AI technology—at a faster pace than the rest of the world—through manufacturing across several industries.
Look Beyond the Software
In our view, some countries in Asia could be in a prime spot to take advantage of technological advancements. There's a common misconception that the region is a combination of low-cost exporters, cheap manufacturers and a place to outsource tasks.
In fact, some Asian economies have leapfrogged the structure commonly found in developed economies, since there's little sunk capital investment in legacy technology and infrastructure. This is particularly noticeable in China which has adopted mobile payment systems at a remarkable pace. For example, there's an expectation that payments made for a meal, an online order or to a taxi driver are done through a digital e-wallet.
Residents in rural areas in particular are able to take advantage of mobile-to-mobile payments, so there's no longer a need to make a concerted effort to visit a brick-and-mortar bank branch. The penetration of these types of digital systems is much higher than we've seen in the developed world. Interestingly, across the border in Hong Kong, payments are still largely cash or card-based.
Equally, we don't think some technological advances could happen without a physical support system in place. Current hardware and infrastructure support the technology of today. We believe future technology will require better hardware and infrastructure.
This includes better silicon chips. For example, for AI to power self-driving vehicles, better silicon chips need to be developed and manufactured to support autonomous systems.
这包括更好的硅芯片。例如，对于 AI 控制的自动驾驶车辆，我们需要开发和制造更好的硅芯片来支持自动驾驶系统。
We are particularly excited about the prospects for hardware players in the industry that are building and developing semiconductors and logic integrated circuits (IC) to meet increasing demand. It's one of the major downstream effects that we have on our radar, that will likely boost the major semiconductor industry in Taiwan, and China's newer industry to an extent.
Computing power, speed and memory, are also required to support AI. We think this could drive exponential increases in computing power that can process large amounts of data and algorithms. Some smartphones are already more powerful than a PC, and with more technology aimed at smartphone apps, we see this as an area for further development .
计算能力、速度和内存也是支持 AI 所需的。我们认为这可以推动计算能力的指数级增长，使其可以处理大量数据和算法。有些智能手机已经比 PC 更强大，而且有更多针对智能手机应用的技术，我们认为这是进一步发展的领域。
Riding the Wave of Machine Learning
An increase in the use of smart devices has created a global demand for the Internet of Things (IoT), which are networks that allow devices to be hyperconnected. But, we predict demand for AI technologies will outstrip IoT, robotics and virtual reality.
Historically the push to develop AI has come from the technology sector, but now other sectors are also harnessing AI to transform their own industries.
The health care sector, for example, is looking to use AI in a number of ways, including AI-assisted robotic surgery, earlier diagnoses through the use of algorithms and speedier analysis of images and scans.
例如，医疗保健部门正在寻求以多种方式使用 AI，包括 AI 辅助机器人手术，通过使用算法进行早期诊断以及更快速地分析图像和扫描。
Financial services, telecommunications and media entertainment companies have traditionally used software to tailor products to customers. We'd expect companies in these industries to utilize AI to process masses of customer data and predict customer needs.
On a larger scale, there's scope to monitor the world's environmental challenges, such as sustainability, pollution and climate change—via the use of AI-deploying devices to monitor fishing activities, reef mapping, and the pH level and temperature of the ocean.
在更大范围内，可以通过使用人工智能部署设备监测捕捞活动、珊瑚礁测绘以及海洋的 pH 值和温度，来监测可持续性、污染和气候变化等世界环境问题。
Finally, we think the availability of 5G, the next generation of mobile internet connectivity, is important. Unlike its predecessor networks, 5G will represent something that's been purpose-built to facilitate and help implement new AI technology.
最后，我们认为下一代移动互联网连接 5G 的可用性非常重要。与其前身网络不同，5G 本身具有促进和帮助实施新 AI 技术的性质。
The Need For Infrastructure Support
Ultimately, technological advances in the AI space are exciting. However, we don't think AI can reach its full potential without a much-needed support system to drive innovation.
We've seen progressive technological developments made across the globe, but right now we think there needs to be more emphasis on infrastructure and hardware itself—and we think Asia might just have enough in its engine to power the developments required to harness AI technology.
我们已经看到了全球范围内技术的逐步发展，但是现在我们认为需要更加重视基础设施和硬件本身 – 我们认为亚洲正具有合适的引擎来驱动 AI 技术所需的开发进展。
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1.Source: International Monetary Fund, “Invest in Robots and People in Asia,” August 29, 2018.