Robotics
Investing in the Future of Robotics
For many people, the term “robot” brings up a lot of preconceived notions, ranging from the stereotypical humanoid robots of 1950s science fiction films, Luke Skywalker’s android companions from “Star Wars,” or even the friendly and loveable Wall-E. But the Hollywood version of robotics has always leaned heavily on the fiction side and light on the science.
In the popular imagination, they remain the types of machines that only exist in some far-off future timeline. But today’s robots are, in fact, more capable than ever. They’re being used in everything from automotive manufacturing, to heavy machinery, to logistics and supply chain handling, order picking, meat processing and much more. Anywhere there is a repetitive, isolated task, you’ll likely find industrial robots picking up at least some of the workload in order to free up their human coworkers for more complex, higher value tasks and protecting them for dangerous work.
According to the Robotic Industries Association, there were more than 250,000 robots in use in the United States as of 2017, mostly in the form of heavyweight “automated arms” that can be used to perform industrial tasks such as welding, painting or assembly. And their ranks are growing rapidly. The association also found that the North American robotics market grew 7.2% in the first half of 2019, with U.S. and Canadian companies ordering nearly 16,500 robots in that time, worth nearly $870 million.
Automotive manufacturers accounted for most of this growth, followed by the semiconductor and electronics industries, the life sciences, and food and consumer goods. And this is the continuation of a trend that industry watchers have noticed since at least 2010. The ongoing trend toward automation, paired with new innovations in robot technology, have ushered in a golden age for robotics, driving record-setting sales across the industry and helping it grow at a compound annual growth rate (CAGR) of 19% between 2012 and 2017, according to the International Federation of Robotics.
Demand for robots is rising, and it isn’t slowing down anytime soon.
What Is Robotics?
In terms of specifics, the Oxford English Dictionary defines a robot as: “A machine capable of carrying out a complex series of actions automatically, especially one programmable by a computer.” It is, in effect, a machine that can carry out physical tasks in the real world. Just as R2D2 and C3P0 in “Star Wars,” they can be programmed to function both alongside and in place of human labor.
But none of this is particularly new. Industrial robots have been commonplace in workplaces around the world for decades. In fact, the industry traces its roots back to an industrial robot named Unimate, which was installed on a General Motors assembly line in New Jersey in 1961, tasked with moving die castings from an adjacent assembly line and welding them onto automotive body panels. Its work helped save its human counterparts from a dangerous and labor-intensive job.
Since then, robots have only become more capable.
The robotics industry today is considered an interdisciplinary branch of both engineering and science that brings together a wide range of different specialties and skills in the production, development and maintenance of robot machines. This typically includes the work of mechanical engineers, electronic engineers, computer scientists, artificial intelligence experts and more, to “oversee the design, construction, operation, and use of robots, as well as computer systems for their control, sensory feedback, and information processing.”
Why Invest in Robotics?
In short, we’re still just scratching the surface of what is possible in robotics.
Advancements in Artificial Intelligence are leading to smarter, more capable robots; miniaturization is shrinking the size of these machines dramatically, opening them up to vast new markets and applications; and of course the continuing trend of falling prices across all hardware segments due to modern efficiencies means robots are becoming available to far more buyers than ever before.
According to Mordor Intelligence, a market research firm: “The robotics market was valued at USD 31.78 billion in 2018 and is expected to register a CAGR of 25% over the forecast period of 2019-2024. In the past decade, industrial robots used to be high priced, due to which, the ROI is expected to be achieved after a decade. However, presently, smaller collaborative robots are priced for companies to receive ROI in months, instead of decades, often costing around USD 20,000. Declining sensor prices and increasing adoption have further aided lower costs.”
How to Invest in Robotics
But how can investors get involved in this growth opportunity for modern robotics? A search on Magnifi suggests that there are a number of different ways to profit in robotics, including ETFs, thematic funds and more.
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The information and data are as of the October 17, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.
Fintech Stocks & ETFs
Uncovering New Opportunities in Fintech
The banking and finance industries don’t have great reputations when it comes to innovation. And why should they? Their products and services – including both personal and commercial banking, lending, advising and investment services – are tried and true businesses, having stood the test of time and returned profits for generations.
Frankly, for many years there was no good reason for finance to try new things. But that’s changing, and the age of technology-driven financial services has officially arrived. It’s changing how and where we bank, how consumers borrow and even how assets are transferred internationally. Legacy institutions like JPMorgan are on board, investors are pumping billions into the space with more than $25 billion invested in the segment through the first half of 2020. For those interested in investing in this fast-growing sector, however, there are a few details to understand first.
What Is Fintech?
At the highest level, financial technology – aka fintech – refers to the application of digital and online technologies to the banking and financial services industries. But that means far more than just mobile access to your checking account.
According to the World Bank, the industry is: “creating new opportunities and challenges for the financial sector – from consumers, to financial institutions, to regulators. Fintech offers many opportunities for governments, from making their financial systems more efficient and competitive to broadening access to financial services for the under-served populations.”
Why Invest in Fintech?
As mentioned, the industry is growing very rapidly. A total of 668 fintech companies were founded in 2014, the high watermark to date, encompassing those working on technologies for Banking & Capital Markets, Investment Management, Insurance and Real Estate. And, although that growth has slowed in recent years, an increasing amount of venture capital investment is finding its way to larger, more established companies than in the early days, indicative of a mature market coming into its own. According to Deloitte, 722 fintechs raised $34.4 billion through September 2020.
There’s room for this trend to continue. After all, the total market cap of the fintech sector as of today is roughly $1 trillion, and PayPal accounts for $285 billion of that total. That might sound like a lot, but when you consider the fact that the traditional finance industry has a market cap in the range of $68 trillion USD worldwide, according to The World Bank, it becomes clear that fintech still has a lot of room to grow.
And it makes sense. To date, we’ve just begun to scratch the surface of the many ways that technology can and will disrupt traditional financial services. We’re now living in a world of digital payments, mobile services and even virtual currencies, but we’re about to enter an era of real, personalized automation that has to-date been impossible.
How to Invest in Fintech
Given all of this opportunity for growth, let’s look at a few ways to invest directly in the fintech sector. After all, the majority of the fintech companies out there today are still private and closed off to most investors. But a search on Magnifi suggests that there are other ways to profit off of the growth of this red-hot new industry.
Unlock a World of Investing with a Magnifi Account
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. Open a Magnifi investment account today.
The information and data are as of the October 9, 2019 (publish date) unless otherwise noted and subject to change. This blog is sponsored by Magnifi.