The fourth industrial revolution has the potential to transform economic and financial activity at global, national, firm and household levels. We discuss some of the key transitional challenges that are unfolding via digitisation, automation and artificial intelligence.
Change has been a fascinating constant in the relationship between capitalism and consumption. It has underpinned the theories of economists from Karl Marx to Joseph Schumpeter. It has been both bleak and uplifting. Sometimes it has been incremental, and sometimes it has been radical.
Today it is very much the latter. Powered by the advent of data ubiquity, the emergence of cyber-physical systems and the rise of robotics, the fourth industrial revolution – widely known as IR 4.0 – is well under way and undeniably radical in nature.
This global phenomenon is already having a profound effect on issues such as growth, inflation, wages, productivity and employment. Going forward, it is also likely to have a profound effect on investment decisions – not just in terms of the rudimentary attractions of identifying “the next big thing” but in terms of the need to understand fully the sweeping transformation that is taking place.
As with any episode of innovation-led disruption, there are likely to be winners and losers. In this paper we argue that change has become an accelerant rather than a constant and that this must be reflected in asset allocation decisions.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.