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The idea of a robot invasion first triggered anxieties around 200 years ago, when textile workers in England called "Luddites" destroyed factory machinery that they feared would replace them. The name has come to describe opposition to all forms of technology, but the original Luddites were merely concerned with saving their livelihoods.
The reality of a robot takeover today is less threatening. When machines can be used to perform tasks that previously required humans, it not only gives those humans the freedom to be more productive, it also creates entirely new economic opportunities that didn't exist before.
And that means new opportunities for investors, too.
"People instinctively fear change," Money Morning Chief Investment Strategist Keith Fitz-Gerald says, "especially when it comes to robots, which are not well understood.
"What they forget is that robots are not just about productivity. They're also about progress, which means, from an investment standpoint, what you really want to be thinking about is how you harness that."
With that in mind, we've got three stock picks for you that are already using automation not just to lower costs, but to expand the capacities of their human employees, expand their enterprises, and deliver better products and services to customers.
But first, let's look at this myth of a robot-dominated dystopia...
Here's the "Dystopian" Future We're Headed For
Imagine a distant future when we've achieved maximum automation; when the "robot invasion" is complete and is old news. Machines dominate our - or, rather, our great-grandchildren's - lives.
- Food is delivered to us in restaurants via automated conveyors and delivered to us at home via driverless vehicles.
- That same food is harvested by machines, which can then load it onto driverless trucks for transport.
- Transportation of any kind, short distance or long distance, requires no drivers, no pilots, no conductors, and no captains.
- To the extent that we ever go to brick-and-mortar stores, they are stocked by machines and require no cashiers. The Internet of Things means we can just grab an item and get an electronic bill automatically.
This is not a dystopia in which robots have completely replaced humans.
True, it's a lot of machines doing a lot of work. But we're going to need a lot of people whose jobs are to install, train, oversee, and repair the millions and millions of machines in the world.
And given the value of those machines and the wealth they generate, those jobs working with them should fetch pretty enviable salaries and benefits.
This new class of workers is going to demand high-quality goods and services, creating brand-new opportunities for...
- Chefs and agricultural specialists to create high-quality foods
- Artists, producers, hosts, and event planners to create high-quality entertainment
- Tourism and hospitality professionals to create high-quality travel options
- Architects and interior designers to create high-quality places to live and work
- Product designers of all kinds to create high-quality devices, games, and software
- Teachers and counselors to provide a high-quality education, empowering the next generation to meet the demands of the new economy
- A slew of professionals in fields no one has even imagined yet
In other words, forget about mass unemployment. Robots are job creators, not job destroyers.
That's borne out by a Deloitte study that found that, while automation had eliminated 800,000 jobs in the United Kingdom over 15 years, it had also created 3.5 million new jobs. Those new jobs paid an average of $13,000 more than those that were eliminated and provided a net boost of $185 billion to the economy.
Mass Unemployment Make No Sense - and That's Important for Investors
If robots were really putting us on a path to mass unemployment, they would end up producing a whole lot of products that nobody could afford to buy.
The economy as we know it would die.
That would be devastating for investors, too, since businesses depend on consumers to thrive.
It is true, of course, that the work people will be doing in the future is different than what it is today. And that's scary in the transition period.
After all, if you told someone a century ago that we would soon be able to produce more food than ever before with a fraction of the agricultural labor force that existed at that time, you probably wouldn't get a friendly reaction.
But we're much more prosperous today than when the majority of the population worked on farms.
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Likewise, the transition away from jobs that can be automated may seem scary, but some companies are already finding new ways to make their employees more useful in the robot age. Because they value the ingenuity and adaptability of the people working for them, these are the companies that are going to get the most out of the rise of the machines and deliver the biggest gains for shareholders.
Let's take a look at them now...
This Company Has Transformed the Retail Sector and Is Still Expanding at a Blistering Pace
About the Author
Stephen Mack has been writing about economics and finance since 2011. He contributed material for the best-selling books Aftershock and The Aftershock Investor. He lives in Baltimore, Maryland.