Preparing Jamaica for the 4thTuesday, September 14, 2021
BY MALIK SMITH
THE fourth industrial revolution is fast approaching and Jamaica must be ready for the opportunities that will present themselves. Under this new world we will see an increase in automation and the use of more sophisticated technology that will need little to no human intervention.
In this transitionary phase we will be hearing more about upcoming industries such as artificial intelligence (AI), energy storage, robotics, genome sequencing, and blockchain technology. Most, if not all, of these industries will be platforms of innovation, according to Cathie Wood, CEO and chief information officer (CIO) of Ark Invest, an investm management firm based in New York City. Ark Invest specifically focuses on upcoming industries that will change the way we fundamentally go about our daily lives. It has roughly US$52.85 billion in assets under management as of February 2021. Wood claims that these industries are evolving at the same time in an interconnected relationship and will revolutionise the world.
Any analyst or investor could examine these trends, do their own due diligence and realise that they are indeed pointing in that direction and are, frankly, inevitable.
For too long Jamaica has been left in the dust and has missed out on multiple opportunities to achieve a higher quality of life, more significant influence on the world stage, and the much-sought after First World country status.
The industries that were previously mentioned are projected to be worth trillions of US dollars in the next 10 to 15 years, thus superseding the innovations of the Old World that brought the steam engine, internal combustion engine, microprocessor and the Internet. If Jamaica were able to significantly invest in at least half of these upcoming global industries, the generations to come would be the beneficiaries of a thriving economy because we seized these exponential growth opportunities. I believe Jamaica could realistically focus on three of the five aforementioned platforms.
Firstly, with the AI platform comes deep learning, which is software that codes itself when fed vast amounts of data, thus causing the final product to be more superior to that which is coded by humans.
This new advent of technology will build upon the information age that brought information technology and the Internet. According to Ark Invest, this platform is expected to add US$30 trillion to the global equity market capitalisations in the next 15 to 20 years and is expected to help in the reduction of human error, improve health care, increase accuracy in forecasting the weather and natural disasters, have the ability to work non-stop, and perform or support jobs that are life-threatening to humans. And these are just but a few of its capapbilities.
AI is expected to be incorporated into almost all industries; for example, health care, retail, and energy, hence the significantly high projected dollar value of this technology. Jobs using AI technology are expected to be promoted in the 2020s and 2030s, along with initiatives to encourage people to prepare themselves to fill these positions as they become available. If the Jamaican workforce readies itself to undertake these types of jobs it would mean more foreign and local capital, growth and development to Jamaica far into the 2030 and 2040s – but only if the Government can set the foundation from now.
A second opportunity exists in energy storage. In this world where the changeover to renewables and a zero-carbon future is imminent, the energy storage industry will be worth billions of dollars. This is because of a 30-year transition period due to the climate crisis which has evidently pushed climate change mitigation efforts for which one of the goals is to achieve net zero emissions by 2050. Energy storage will be a major platform that will be needed to realise said goal and will have to become more robust and efficient, even in the harshest conditions such as hurricanes and earthquakes.
According to the Union of Concerned Scientists, energy storage helps to create a more flexible and reliable grid system. There are also breakthroughs in battery technology that could significantly push down the costs of electric products, such as electric vehicles (EVs), which will also see an exponential increase in sales this decade. With a trend of more demand for renewables this will be a very lucrative industry to incentivise young people to move into. They could do this by starting companies geared towards green energy and intermediary sectors that support the energy storage platform.
Another industry Jamaica could possibly look into is blockchain technology. According to Euromoney “blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system”.
In a world that is becoming more digitised, whether we like it or not, cybersecurity has become an absolute necessity, therefore making this industry poised for the most growth. But that's not it. According to Ark Invest, “blockchain-based value transfer and storage systems” have the potential to disrupt major remittance operators such as Western Union, PayPal and Visa. For a country like Jamaica where the second-largest contributor to the gross domestic product (GDP) is remittance, this would be huge. Major cryptocurrencies, such as Bitcoin and Ethereum, run on their own blockchain networks for added security and transparency as well.
These projections may seem optimistic but every initiative starts with an idea, and anything that improves Jamaica's economic standing should be given a chance. Unfortunately, Jamaica, in its current state, does not have and adequate academic foundation on which to build in order to achieve these goals in a realistic time frame. For that to be possible we must set a solid foundation in science, technology, engineering, and mathematics (STEM) as soon as possible. If we could tap in from now and build out the platform to support these industries by delving into public-private partnerships to support these infant industries and providing incentives for start-ups such as easing debt- and equity-raising requirements on the capital markets we could put our nation in an economically viable position unlike any other country in the region. This would also result in the economy becoming less reliant on tourism and remittances.
Jamaica does not have the luxury of being able to allow such a significant opportunity to pass us, again, because if we do, we will surely regret it.
Malik Smith is currently pursuing a double major in economics and banking and finance. Send comments to the Jamaica Observer or email@example.com.