Post #68: Rise of the robots - Heptagon Capital – Production

COVID-19 has already led to massive changes in working practices. Expect more though. Few would have imagined at the start of the year just how commonplace and…

Post #68: Rise of the robots

COVID-19 has already led to massive changes in working practices. Expect more though. Few would have imagined at the start of the year just how commonplace and normalised homeworking has now become. Many firms are naturally grappling with how to cut costs in the face of reduced demand. Streamlining production makes sense. Increased automation is also likely to be a key element of this approach. Indeed, in a post-pandemic world, many people might prefer to deal with a robot rather than a human.

Robots can help increase social distancing and also reduce the number of people who may need to come to work. Robots are already being used to perform roles that some workers cannot practically do from home. Consider that Walmart is now utilising robots to scrub the floors of all its retail outlets. Similarly, in South Korea robots have been deployed to measure temperatures and distribute hand sanitisers in hospitals. Health authorities in several countries in Europe as well as in China have also begun to explore this possibility.

Where next for robots? The possibilities are potentially endless, but two interesting scenarios spring immediately to mind. First, consider food service. McDonalds has already begun to trial robots both in cooking and service roles. Meanwhile, we all recognise that air travel is unlikely ever to be the same again. Hong Kong airport perhaps gives a provoking insight into the future. On arrival, passengers might be forced to enter a machine that can fully sanitise them within 40 seconds, using sprays to kill bacteria and viruses on skin and clothing. The system is currently in trial phase. Additionally, don’t be surprised at the sight on autonomous cleaning robots at the airport, apparently capable of killing microbes by zapping them with ultraviolet light.

Many industries (particularly large online retailers such as Amazon or car production plants) have, of course, been using robots in parts of their processes for years. Once you start, though, it’s hard to turn back. Jobs that were once performed by humans and are now carried out by robots rarely go into reverse. Robots don’t get sick, request holidays or expect pay rises. A more efficient (and arguably safer) world certainly sound enticing for many but how society deals with a potentially lost generation of unemployed workers is another matter. 

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The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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