Thematic Report

Theorality – The intersection of business theory and business reality

by Shaun Cochran / Sep 1, 2019


CLSA’s Theorality thematic bible (T19) will explain to investors why the ongoing rapid digitisation of healthcare is permeating not just diagnostics, but now treatment protocols and even the partial automation of robotic surgeries. This will direct investor attention to a crucial question, the trade -off between exponential progress of knowledge and practice and privacy. If an insurance company will become able to estimate a growing probability of you developing a disease that is expensive to treat, years before major symptoms, should they be allowed to use that data and are they obligated to tell you?

Intelligent factories and autonomous driving
These expressions of artificial intelligence in the physical world via robotics have long held massive promise. T19 will update investors on where we are for intelligent factories and autonomous driving. Having moved past the peak of the hype cycle, both industries are moving through the hard yards of development that will define competitive leadership over the next decade. Intelligent robots continue to make steady progress in line with our expectations. T19 will explain why roboti cs companies will increasingly become software companies.

Autonomy business models
T19 will breakdown what we got wrong, how that informs our future expectations and why China (and possibly Baidu’s Apollo) may have a greater edge in the commercialisation of the industry than we first thought. The other transport industry at a major inflexion point in 2019 is drones. The key question is: If air-based transport is developing faster than we thought and road-based solutions more slowly, do the autonomy business models, as currently conceived, face an existential threat?

AI in the services industry
Of course, all of this is made possible by artificial intelligence which is progressing most quickly in the services world that imposes no physical, or public safety hurdles, to impede cognitive progress. T19 will update why it was correct to focus on Advanced Services and why areas such as call centres will remain the field where executives ‘get religion’ on the future and commercial value of AI.

Rendered realities offer huge potential
Of our remaining themes, we continue to see Rendered Realities as a sector with amazing potential but where the concepts are too far ahead of what the tech can deliver. This is why Enterprise is the logical focus for Microsoft as the logical leader and Apple is, and will remain, late to the commercialisation train.

Digital banking set to disrupt
As to the infamous blockchain, we continue to see payments as the areas of greatest potential disruption in the Fintech space, and Facebook’s Libra as the strongest validation of our view. In Asia, a wave of digital-banking disruption is about to get underway. Shaun retains the view that sovereign wholesale digital currencies are inevitable and will outline the building case to support that.