To enlighten investors on the impact of the breakthroughs and opportunities they should embark on, ARK Invest began publishing Big Ideas in 2017. The annual research reports seek to highlight the latest development in innovation and offer some of ARK's most provocative research conclusions for the year.
The Robots are coming…
On this latest blog, we will discuss Automation. There is a widespread fear surrounding Automation will destroy jobs, but ARK believes that nothing of that sort would happen; instead, it will empower humans and increase productivity and wage growth. As mentioned in the research paper of Ark, Automation has the potential to shift unpaid labor to paid labor. Various examples such as food services automate, transform food prep, cleanup, and grocery shopping into market activities, including food delivery. ARK believes that Automation will add 5%, $1.2 trillion, to the US GDP in the next five years.
Industrial Robot Demand Seems To Have Hit An Inflection Point
The industrial robot demand hit an inflection point following the great recession in 2008/2009. The trade tensions between the US and China may also have added to the momentum before COVID-19 created a headwind. According to ARK's research, the short-term obstacles will not prevent a rebound in industrial robot sales and encourage companies to automate and cut costs more aggressively.
Increased Automation And Productivity Can Provide Many Economic Benefits
A drop in labor relative to capital does not necessarily suggest that wages are falling. Instead, the output can grow faster than wages. Thanks to increased productivity and Automation, ARK expects a combination of the following four outcomes:
• Higher wages: benefiting employees
• Lower prices: benefiting consumers
• Higher margins: benefiting companies
• Higher investments: creating virtuous cycles
Automation Shifts "Unpaid" Labor Into "Paid" Labor
From data, we know that 82% of the roughly seven million people who lost their job in agriculture between 1950 and 2000 were unpaid family workers(members). The loss of jobs in one industry doesn't suggest that total employment will decline. Automated products and services are less expensive than their alternatives.
Read the complete research HERE
