July 5, 2019
While persistent innovation maintains its foothold in the fields of robotics and automation, effects are felt throughout most industries as the need to maintain a competitive edge drives implementation of new technologies.
- Machine learning
- Cloud computing
- Online/mobile ordering and delivery
It should come as no surprise that information technology (IT) is one of the most influenced industries by the ever-changing technology landscape. While innovations in robotics and artificial intelligence (AI) have negatively affected job markets in some industries by unintentionally eliminating traditional job functions, the IT job market continues to thrive1.
Demand for programming architects and those who are well-versed in code is skyrocketing as a skills shortage is boosting global competition as well as pay for a shallow pool of tech meisters. Our experts from Walter Scott believe the next generation of the workforce cannot learn coding soon enough as some of the businesses they have spoken with expect to hire full-fledged coding professionals as young as 20.
As IT professionals direct their focus towards programming and coding, some of the more mundane tasks that had historically taken up more time are disappearing. One company perpetuating that trend is IT solutions company Cisco Systems with intent-based network system, which uses a blend of machine learning and automation to streamline business needs like operational processes and application service levels. Cisco reports that through its system, it has reduced the amount of time that IT departments spend on reactive troubleshooting by 43%2.
Microsoft has been implementing machine learning capabilities in different areas, including a strong push towards healthcare. This is reflected in its product Project InnerEye, which is aimed at helping oncologists, radiologists and surgeons identify and map out where tumors are in relation to surrounding healthy tissue. The real value-add is this can take place within minutes while without the technology, it could take a human hours to complete3.
The success of some radiation treatments is largely dependent on accuracy of tumor contouring4. To perform tumor contouring and segmentation, InnerEye uses machine learning capabilities to train on images from medical institutions and hospitals. Machine learning is used to reduce human error in other industries5 so it is not difficult to see how it could be beneficial in the healthcare industry.
Business insurance companies have been using cloud computing to speed up the rate at which they are able to conduct risk calculations. Hiscox, which provides insurance to businesses in a variety of industries like landscaping, real estate and marketing, currently uses cloud computing technology from Microsoft’s Azure cloud to predict flood risk. Through faster data analysis made possible by Azure, Hiscox is able to perform calculations in 12 hours that otherwise could take up to eight months to perform6.
According to the Hiscox, the use of Azure has given the company the ability to improve the quality of its risk assessments while allowing it to market more tailored products to its clients. Other insurers to use Microsoft’s Azure include health insurer MetLife, personal and business insurance firm Towergate Insurance and UK insurance premium finance company Premium Credit.
Food retail industry
While the effects of technological disruption on the food retail industry have been widely followed in the U.S., especially after Amazon’s acquisition of Whole Foods in 2017, the trend is also transpiring in China with Amazon’s rival, Alibaba.
There is a recurring theme of online retailers going after businesses still operating with more of a physical presence in an effort to increase their reach. For example Alibaba’s push into offline, or ‘new retail’ involves its high tech supermarket (and distribution center) Hema. It has grown from zero to over 60 stores in just three years.
Customers order food on Hema’s app and, if they live within a three-kilometre radius, should have their shopping bags delivered within 30 minutes. Payments are made via Alibaba’s Taobao or Alipay platforms and at a number of its stores, customers can pay through facial-recognition technology installed at kiosks.
What Walter Scott thinks:
“As bottom-up and resolutely long-term investors we view technology in a particular light. Although exciting growth opportunities may be arising, we are wary of lofty valuation multiples associated with tech companies and therefore tread lightly. We believe in focusing on business models that bring strong recurring revenue and sustainable margins at reasonable valuations.
“While the market is typically drawn to things shiny and new, businesses that are likely perceived as pedestrian ‘legacy’ tech have actually reinvented themselves and are innovating in many areas. We believe it is possible to maintain an embrace of change, without succumbing to undue speculation.”
1 CNBC: The fastest-growing job in the US is expected to grow 105% by 2026—here are the other 19, 6 March 2019
2 Forbes: Could Cisco be one step closer in delivering its network intuitive vision, 30 January 2018
3 The Guardian: ‘It’s going to create a revolution’: how AI is transforming the NHS, 4 July 2018
4 National Center for Biotechnology Information: Tumor delineation: The weakest link in the search for accuracy in radiotherapy, October - December 2008
5 Acre: AI takes the human error out of the workplace, 19 January 2018
6 Computing: Hiscox replatforms to Microsoft Azure, 29 June 2018
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