Assessing AI and emerging markets
Artificial intelligence and machine learning are not terms limited to developed markets, but will play an increasingly important role in emerging markets, especially where margins on labour intensive manufacturing are being squeezed by rising wages, according to latest research into the trends put forward by BNP Paribas Asset Management.
Michelle Fan, analyst, Global Emerging Market Equities, and David Choa, portfolio manager, Greater China Equities, note, for example, that: “In China, the use of AI will particularly play an important role in the shift from a capital-intensive model to a consumption-based economy.”
“Most EM countries have favorable policies toward AI adoption and demographics act as a tailwind in many EM countries.”
China has shifted from a population in 1982 where a third were under the age of 15 to one now in which half are middle aged, and to drive its GDP forward in future it is going to be less capital intensive and more focused on productivity improvements. Doing so will require more use of AI-derived business strategies. While for those emerging markets where populations are still younger than those on average in developed markets, there is a correlation to adoption rates of new technology.
Elsewhere in emerging markets there are examples of micro-level implementation of AI across all sectors. For example, healthcare companies in Korea are using AI to sift through millions of data sets relating to dissertations and clinical test data; in Russia the oil and gas sector is looking to AI to reduce costs of seismic surveys; and semiconductor makers in Taiwan look set to benefit from the rise of autonomous driving that AI makes possible, because of the estimated increase in demand for memory chips and processors to handle the data required for self-driving cars to work.
Click here to read the full report: AI, China and Emerging Markets