R&R analyses the economic, financial and strategic impacts of the Fin-Tech revolution, in a series of papers written with Fin-Tech experts.
We are making some of these papers available to everyone: our goal is to raise public awareness of the technologies now changing our economies and societies, and to stimulate public debate.
There might, hypothetically, be a clear winner of the “Fourth Industrial Revolution”. AI systems and 5G technology are surely the revolution’s two key enablers,and the first mover - the first to successfully implement these systems on a large and sophisticated scale - will certainly gain a competitive advantage over others. This is not, however, a winner-take-all game. There is rather a potentially virtuous cycle, whereby technologies attract the talent and capital which, in turn, stimulates innovation further by utilizing the enormous amount of data generated by this technological-industrial revolution.
Nevertheless, states and private-sector participants should also start thinking about which directions we collectively wish to take these new technologies. Most companies and governments are now in the process of setting up their AI and 5G technologies; given all the blurriness surrounding this topic, we believe it would be best to pause for a moment, to first understand what we are aiming for and why.
Sooner or later, 5G and AI will deeply affect our lives, influencing sectors such as fintech, health care, manufacturing and even agriculture. Thus, 5G security and AI ethics should always be on governments’ to-do lists. Political leaders sometimes seem to forget that. A few positive steps have been taken regarding this issue, including a pledge not to develop lethal autonomous weapons by DeepMind founders, Skype founder Jaan Tallinn, Elon Musk and some of the world’s most respected and prominent AI researchers. This is particularly relevant in a world that is becoming increasingly polarised by a Cold War between the US and China, whose technological rivalry is a key (if not the key) component of their broader political rivalry.
We believe that technological supremacy will be achieved by countries that are able not only to devote the largest amount of investment to areas such as AI and 5G, but rather are also able to provide a combination of vision, strategy, resources, ethics and real applications,where emerging technologies are concerned.
Currently, the quality of engineers and the ability to attract quality employees are, along with competitive open markets and a strong influence on allies, the key advantages of the US in this race. On the other hand, China is ahead in the game, given its authoritarian state, huge domestic market, reduced privacy concerns and head-start in 5G. In spite of this, the United States will definitely not sit back and watch the Chinese continue to pull ahead.
In this contest Europe appears behind, out of the ring so to speak. Holding back on its quality research and internal states’ divergence. It is time for the Old Continent to shake up and create a clear common strategy.
Yet, this is and will continue to be one of the toughest technological fights ever .
Klecha & Co. is a private investment bank focused on Technology, including Software, IT Services, Hardware and IoT. With offices in Milan, London and New York, its clients are private-sector companies, active contributors or solution providers for the ongoing digital revolution, with the opportunities and challenges arising from the digitalization of business processes.
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