Automation and artificial intelligence: The rise of the clever robot

The Port of Singapore has recently confirmed that plans to build the world’s biggest automated mega-port by 2040 are going ahead. We are now at the cusp of a robotics and artificial intelligence revolution, that will impact all areas of our lives – and create new opportunities for businesses to grow and prosper.

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Covid-19 is making the transition from pandemic to endemic. This means that the infection will still be transmitted, but at a level that will not cause significant disruption to our daily lives – or our healthcare system. Nevertheless, despite its minuscule stature and the diminishing health emergency, the impact of this virus is becoming a significant driver of technological progress.

Supply-chain disruptions are one of many complex factors that have conflated to drive inflation significantly higher, as it caused a shortage of finished goods and essential components used by manufacturers all over the world. At the end of last year, thousands of ships were queuing to get into ports such as Los Angeles, Shenzhen, and Melbourne, with costs mounting every extra day they failed to secure a berth.

Covid still impacts world trade

The virus continues to damage world trade. The Chinese mega-port at Shanghai started to emerge from its latest gruelling lockdown in June. This brought the city of 26.3 million people to a standstill between March and June. Beijing refuses to abandon its strict ‘zero-Covid’ policy – even in the case of the city that contains the port handling one-fifth of China’s shipping volumes, which was allowed to operate at a severely reduced capacity. Many shipments have either been cancelled, postponed or rerouted. Besides Shanghai, other major Chinese ports such as Shenzhen have also been affected by lockdowns. Further restrictions are likely if outbreaks occur. Although the shipping situation was supposed to improve this year, the imbalance will take time to recover and the challenges for global trade may get worse before they improve.

The pandemic cast a light on the inherent weaknesses in long-and-distant supply chains

To deal with the logistical nightmare and cost of congestion at harbours all over the world, the Port of Singapore aims to make itself the most efficient place for ships to carry out all their potential needs. All processes will be automated and paperless at the automated mega-port – including banking, refuelling, and the management of unloading container cargo and storage, all managed by AI. It will have drones and driverless vehicles helping to ensure it all runs smoothly.

But making systems more productive by taking away the human factor may not be enough and can introduce problems of a new nature. The pandemic cast a light on the inherent weaknesses in long-and-distant supply chains, with some industries unable to operate – or forced to run manufacturing sites at a reduced capacity, which is usually a bad sign for margins. This has forced company boards to assess whether having new suppliers closer to home may be more suited for the task, despite the higher costs involved. While not exactly hailing the end of 20th-century globalisation, clearly this trend is going into reverse. When companies decide about developing new manufacturing capabilities, supply chain management will now be a major component in the deliberation.

The return of cold-war tactics

As Russia and China’s relationship with the west deteriorates, governments are looking at strategically important supply lines – and the potential that they could be weaponised against them. Right now, Vladimir Putin is using the threat of cutting off Europe’s gas supplies as leverage in Moscow’s battle against the sanctions introduced following its invasion of Ukraine.

In April, US President Joe Biden invoked the Cold War-era Defense Production Act (DPA) to expand domestic production of certain critical minerals involved in the manufacture of large-capacity batteries. The five minerals specifically identified in the President’s memorandum were lithium, nickel, cobalt, graphite, and manganese.

No one on Earth had an iPhone until 2007. Today, it is estimated that there are 1.8 billion active Apple devices globally.

The DPA allows the President to expedite and expand the supply of materials and services of American companies. Rare earth elements are integral to many devices we use daily, like smartphone screens, computers, and flat panel televisions. If the supply of these is restricted, a country’s technological progress could be halted in its tracks. This matters because although the rate of technological progress has already been staggering, it’s about to accelerate to break-neck speed.

No one on Earth had an iPhone until 2007 (except maybe Steve Jobs). Today – just fifteen years later – it is estimated that there are 1.8 billion active Apple devices globally, with more than 1 billion of those being iPhones. There are more than 3 billion active smartphone users in total. Most of us have watched the development of mobiles as these devices have now embedded themselves into our daily lives. It is difficult to imagine what the acceleration in the rate of progress will eventually look like. Nevertheless, the drivers of progress are clearly in place.

The mother(s) of innovation

There are two main factors that drive innovation. The pace of technological development is accelerated by rivalry and by crisis. The move to automation by the Port of Singapore is a good example of how a crisis can force a change to be made and how innovation can make the solution viable. But it is the ideological rivalry between the western democracies and the autocratic block, led by Russia and China, that is likely to be a key driver of progress over the medium term.

Such clashes of cultures and civilisations often lead to significant technological breakthroughs. Many of these would not have been possible without the sense of urgency that such friction creates. Without a battle for ideological supremacy between Moscow and Washington in the mid-20th century, the technological race that propelled Neil Armstrong to the Moon probably wouldn’t have happened. The 1960s space race can be viewed as a demonstration to show that the machines created by capitalism in the west were ultimately superior to those devised by communism in the east.

The latest round of geopolitical competition is even more important than the space race. The trade war between America and China, which was started by Donald Trump and continues under Joe Biden’s presidency, is really a conflict about technology. Donald Trump’s administration claims – probably quite rightly – that Chinese high-tech companies have only managed to grow and succeed because of the “systematic theft” of US inventions and ideas. Beijing also used its ability to direct Chinese companies' research and development in areas it considered useful for the state.

...intelligent technology will soon be in almost all parts of our lives. Recent events will make this happen much sooner than previous developments and potentially sooner than we think.

These alleged violations of US intellectual property resulted in the rapid development of Chinese technology companies, with Huawei initially in the firing line because the world is currently building the infrastructure that will drive the economy of tomorrow – 5G infrastructure and the “Internet of Things” (IoT). Washington couldn’t let Beijing get ahead in this race.

The world is currently in a state of significant flux with geopolitics impacting business to an extent not seen since the mid-20th century. The Covid-19 pandemic, Russia’s invasion of Ukraine, and a deteriorating relationship between China and major democracies are partly responsible for the inflation that is troubling central bankers, politicians seeking re-election and consumers alike. It has also accelerated numerous trends that were already in place. From driverless cars to smart cities that adjust street lighting depending on the number of people in the area, intelligent technology will soon be in almost all parts of our lives. Recent events will make this happen much sooner than previous developments and potentially sooner than we think.

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Automation and artificial intelligence: The rise of the clever robot

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