Having our global headquarters in the midst of California’s Silicon Valley gives Franklin Templeton a particular insight into the development of the technology sector. And often, new technologies can influence more than just a single industry or sector. We believe investors should consider potential market impacts although how these technologies will play out remains to be seen.

AI Underpins Growth Potential

In recent years, the evolution of artificial intelligence (AI) has rarely been far from the headlines. Its sphere of influence now reaches into nearly every sector and geography.

AI technology uses “machine learning” to allow computers to perform tasks that usually require human intelligence, such as data analysis, speech recognition, decision-making and translation. AI technology can help make sense out of vast amounts of data so humans can leverage it—in many cases more quickly and efficiently than humans could ever accomplish.

But the tentacles of opportunity that AI presents extend significantly further than just the technology arena.

Franklin Equity Group’s Matt Moberg and Serena Perin Vinton explain the pervasive pan-sector influence of AI in this article.

They outline some examples of the convergence of technology with other sectors to drive innovation.

There is already plenty of evidence that technology-driven innovation is affecting a wide range of sectors, from automotive to defense.” – Matt Moberg and Serena Perin Vinton, March 23, 2017

According to Serena and Matt, this convergence trend has been born out of necessity. Many industries have found that they must innovate as productivity gains have become increasingly important.

Companies in many industries have been adopting technology to eke out incremental growth or productivity to drive earnings growth and to better address evolving consumer needs.

In this article from July 2017, Matt Moberg explains how he thinks AI underpins positive growth potential. In particular, Matt suggests that innovation in AI, in addition to biotechnology, medical device technology and alternative energy, will likely bring us closer to having further integration of technology in our day-to-day lives.

He points out that the financial, industrial and energy sectors are leaders in the development of innovative products or prominent suppliers of ground-breaking technology.

What we’ve witnessed in on-demand technology and services is early evidence of what could be possible in these industries.” – Matt Moberg, July 7, 2017.