In today's Autumn Budget, Philip Hammond, Chancellor of the Exchequer, declared that the world was on the brink of a technical revolution, with Britain at the forefront.
He claimed that digital technologies have enormous potential to transform the economy, citing artificial intelligence (AI), which has the potential to increase productivity by up to 30% in some industries. AI could also benefit households across the UK by up to £2,300 per year by 2030.
He stated that the government wants to see fully self-driving cars, without a human operator, on UK roads by 2021 and predicted that the UK driverless car industry will eventually be worth £28 billion to the UK economy and employ 27,000 people.
He's not alone in his enthusiasm. Back in September 2016, Accenture and Frontier Economics predicted that AI has the potential to double annual economic growth rates in terms of gross value added (a close approximation of GDP).
And a recent paper by AI experts, which was brought to our attention by BNY Mellon, suggests that machines may be able to translate languages by 2024, write school essays by 2026, drive a truck by 2027 and work in retail by 2031. Only slightly further into the future, it suggests machines could write a best-selling book by 2049 and work as a surgeon by 2053!
Some fund managers we talk to today believe that artificial intelligence could change our lives as much as the internet has.
So how can we make these technologies of the future work for us today in our portfolios? An artificial intelligence fund would be an obvious answer and a few have been launched in recent times.
Smith & Williamson Artificial Intelligence is one example. It holds Nvidia - a company which has a background in gaming, but has now gone into automotives as a new business area. It is currently one of the most strategically important component companies in the AI world.
More generalist fund managers are also backing AI opportunities. Woodford Equity Income has a number of investments in small tech start-ups. L&G UK Alpha Trust has a position in Seeing Machines, which makes intelligent sensory algorithms to help machines to understand people. It is being used to monitor drivers and increase safety. Meanwhile, it is also involved in the move towards driverless cars because it helps machines to make instant decisions, based on what is happening inside and outside of the car.
It's certainly a trend that is attracting a lot of attention – and is one that is on the government’s agenda. Time will tell if the predictions are correct.
Past performance is not a reliable guide to future returns. You may not get back the amount originally invested, and tax rules can change over time. James's views are his own and do not constitute financial advice.