A bull market in the Rust Belt, fueled by technology
Don’t look now, but some industry sectors are hitting new highs after tech stocks collapse. Technology, automation, and investment conspire to fuel a renaissance in industrial markets. Expect this to be a big topic in the future: efficiency and growth through industrial automation.
Cutting-edge technology promises to boost profits and growth when applied in well-established industrial areas. Examples include autonomous driving of automated vehicles and machinery, and retail logistics using technologies such as drones. All of these have the potential to not only make industries more efficient, but also to create new value-added services.
Wall Street tuned in to this activity. Traditional big-cap tech companies like Microsoft and Amazon have taken a hit, however Caterpillar shares hit an all-time high this week And John Deere’s stock isn’t far behind. Big industrial companies are being propelled in part by large investments in infrastructure, but optimism about them becoming tech companies is also part of the picture. This trend may be within the next decade.
Caterpillar, der doubling on automation
I didn’t get to attend the recent CES show in Las Vegas, but industrial automation was a major topic. Giants of agricultural and industrial machinery John Deere and Caterpillar took center stage.
The John Deere booth featured a giant Deere 412R sprinkler with a 120-foot boom. The device has 36 cameras and See & Spray Ultimate technology that takes advantage of Deere’s massive weed database, powered by NVIDIA GPUs. Tractors are now smart enough to identify specific weeds.
Dir already produced Fully automated tractors The dam is full of satellite navigation, data analytics, and automated driving technology. It hopes to grow a huge new business in data and navigation technology services.
Caterpillar has its own line of high-tech jumbo dump trucks, some with remote piloting capabilities. New services have been taken advantage of, such as annual maintenance and operations programs as well as autonomous mining vehicles.
Automotive looking for software enhancement
Another industry looking for opportunity in the arm is the automotive industry. Traditionally a cyclical industry, the automotive industry has the potential to transform itself by selling value-added services such as navigation and autonomous driving with annual recurring revenue. Automakers can also take advantage of new markets such as self-driving taxis.
Brad Rosen, COO and Co-Founder Autonomous driving technology company NODARHe said there is excitement about the new growth potential derived from autonomous technologies. Some of the examples he gave: construction cranes, last-mile deliveries, and self-driving.
“There are a lot of markets that stand to benefit from automation,” Rosen said in the video interview. “There’s a lot of automation coming in for construction, air taxis, trains, heavy machinery, last mile deliveries. Air taxis are far away but this is exciting.”
While some expectations for fully autonomous driving have been scaled back, Rosen said even additional autonomous driving, such as Level 3 (L3) automated driving, has great potential. “L3, which is ‘parked in plain sight’, will create new monetization opportunities for automakers. There will be a quarter of a billion vehicles with L3 on them.”
BNEF has acquired it from Bloomberg. The research unit estimates that the Advanced Driver Assistance Systems (ADAS) market could grow to a $220 billion annual market globally by 2030.
Full self-driving has great potential in markets such as robot taxis and trucks, Rosen says. Autonomous trucking is expected to reach parts of the US by 2026. This is compelling because of the return on investment – 60% of the cost of operating a truck is the cost of the driver, and there is currently a shortage of drivers.
Robots increase profits, and pose business challenges
As technologies like cloud-powered artificial intelligence (AI), advanced data analytics, and automation infiltrate many different industries, we are likely to see increased technology efficiencies and new opportunities in many categories. According to a recent study by McKinsey, automated systems will account for 25 percent of capital spending over the next five years. Affected industries include logistics, retail, life sciences, healthcare, automotive, and food and beverage, Mackenzie says.
There is ample precedent for this. Technological progress is widespread and can improve any industry. For example, the railroad industry has been almost completely reshaped by automation and improved technology—much to the chagrin of labor unions. newly The New York Times The article noted that major railroads based in the US and Canada – which include CSX – Combined net income was $27 billion, up from $15 billion a decade earlier.
Of course, sometimes automation has a cost. The rail unions are not happy about this. But the efficiency of technology is inevitable, and it is the duty of our society to find ways to create new jobs, which we usually do. Humans are creative.
What will the trade unions think? My grandfather and great uncle both worked in a steel mill in Pittsburgh, so I’m sympathetic. Those posts are mostly gone. But I’m not sure there is a way to stop the technological process. The best hope is retraining for new systems or for new industries, as the workforce is constantly being reshaped.
This automated injection could have many benefits for the industry and its customers. Business becomes more profitable and efficient, while customers get a better product.