Robots In, Baby Boomers Out

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  • The US government shutdown could bite soon
  • Japan, Germany and China: Same problem, same solution
  • Plus, another tailwind for this stock

Another week and the US government shutdown continues.

It’s now the longest in US history. No resolution is appearing. Markets have remained unperturbed so far.

This could begin to bite soon.

The worst part is that it’s so utterly pointless. Even if Donald Trump gets his wall, it will all have been for nothing anyway.

Why?

A wall is designed to keep immigrants out of the United States of America.

It might be a winner in national politics. But basic economics says this policy can’t last.

Today’s Profit Watch explains why…and the industry set to surge from the basic dynamic…

The Wall Street Journal cited some key data the other week. I’m sure not one person pointed it out to you.

It’s pretty simple. The number of babies born in 2017 in America was the lowest in 30 years.

These numbers put the level of births below the ‘replacement’ level for the current population.

Now, demographic shifts take years to play out.

But the United States — if it’s to remain the world’s number one power — will soon be actively encouraging people to move there.

A wall with Mexico won’t change this basic dynamic.

Already the unemployment rate is around a record low in America and wages are rising.

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These are the early hints of the labour shortage that’s only going to become more acute as the years pass.

About 10,000 baby boomers retire every day in the United States. They make up 20% of the population.

You only have to look at Japan to see the future…

The major economies are ageing — fast

The number of workers in Japan is expected to fall 12% within 12 years.

Unemployment in Japan is already around lows not seen since 1992: 2.3%.

The Japanese government is highly averse to allowing large-scale immigration.

But last year, Prime Minister Shinzo Abe conceded something must be done — and implemented a policy to let half a million foreign workers into the country by 2025.

China is also ageing fast. Even ending the one-child policy has not changed this dynamic.

The median age in China is around 37. In India, it is 10 years less.

In Germany, it is 46.

A problem for the next 10 years will be a shortage of labour globally.

This is the opposite of what most people fear.

The general perception is that unemployment could skyrocket as advancements in robotics and artificial intelligence eat white-collar jobs.

Actually, we should welcome the rise of the robots. They’re going to ease this burden and make the economy more productive…and safer.

I remember talking a while ago about Australian oil and gas giant Woodside. It’s using a robot that NASA designed to help inspect and maintain its offshore operations.

That’s a perfect example of how dangerous work can be outsourced.

China already plans to double the number of robots per worker.

At the very least, it’s going to throw up a lot of investment opportunities…

Another tailwind for this stock

Here’s a notable announcement that came out this month.

US tech stock Nvidia Corporation [NASDAQ:NVDA] is opening a robotics research centre in Seattle.

The work here is going to focus on building robots designed to work with humans.

This is an exceedingly interesting development. Nvidia’s chips make it a leader in artificial intelligence and automation. That makes it a fairly compelling hold as it is.

Robotics opens up another huge market.

Think of the implications… Once one smart robot learns something, it can be shared with every other robot at once.

The savings in time and money, just in training alone, are prodigious.

An army of robots also has other implications. It allows the potential ‘reshoring’ of manufacturing to countries like the UK, the US and even Australia.

The key cost consideration might become energy, rather than wages. This could put America at a huge advantage. It’s vast reserves of natural gas give it a massive competitive edge. 

Robots could lower healthcare costs to an incredible degree — and make government finances across the West look a lot more sustainable.

There’s a lot to like about this trend.

Every year, the latest tech is showcased at a Las Vegas conference called CES (Consumer Electronics Show).

One video I saw showed just how advanced some of this technology is.

There’s a robot playing against a human in a game of ping pong.

The robot returns the ball with ease. It even accounts for the playing style of the guy it’s playing with.

I suggest you check it out here.

All the best,

Callum Newman Signature

Callum Newman,
Editor, Profit Watch

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