In many respects this looks like a time of opportunity. Growth has returned to major economies, business confidence is on the rise across the United States and Asia, and China is increasingly opening its markets to the world.

However the global recovery has been largely aided by government stimulus on an unprecedented scale, which has pushed interest rates to historic lows and left investors struggling to find yield. Questions persist about the ability of central banks to soft-land their economies, triggering uncertainty around monetary policy, while fears of a global trade war and geopolitical unrest mean market volatility is an ever-present risk.

Amid such conditions it’s crucial to identify the trends that will fuel long-term future growth, and shape investment strategies accordingly. The technology sector, which outperformed most major markets in 2017, is poised to unleash the disruptive impact of artificial intelligence (AI) and build shareholder value by empowering companies to innovate, and to enhance productivity and profitability.

Consider this: PwC predicts that AI will drive global GDP gains of US$15.7 trillion by 2030, making it the biggest commercial opportunity currently available to investors. According to data provider Tractica, worldwide revenues from AI are projected to grow to nearly US$37 billion by 2025 – an annual growth rate of 57%.

Simply put, AI is the ability of a machine or a program to think, learn and perform tasks like a human in real-time. Apple’s Siri, Amazon’s Echo or Google Translate are just a handful of the AI technologies we already use today. By 2021, AI will be an even bigger part of our daily lives, with the machine to machine (M2M) connections that make up the ‘Internet of Things’ accounting for half of the over 27 billion devices connected globally.¹

With rapidly diminishing constraints on processing speeds, and memory and storage costs, AI will reshape industries well beyond robotics. Already, machine-learning software is allowing online retailers to tailor their advertisements to highly specific demographics and helping farmers improve crop yields by predicting changes in the environment. Automakers are mainstreaming features such as lane-departure warnings as they push to make self-driving cars commercially available by as early as 2020. Some AI systems are learning how to pilot aircraft while others accurately diagnose ailments. In the world of finance, AI and blockchain are revolutionising lending practices.

A recent survey conducted by MIT Sloan Management Review in collaboration with The Boston Consulting Group highlighted the value companies attach to AI’s potential, finding nearly 75% of respondents believe AI will enable their companies to enter new markets, while 84% see it as a source of a competitive advantage.

While Silicon Valley drove the early development and adoption of AI, Asia’s demographic and regulatory trends make the region an ideal place for the technology to advance and evolve. China has already emerged at the forefront, with its massive connected population and rapid adoption of digital payments giving it unmatched data resources.The government is aiming for nothing short of making the country a global innovation hub for AI by 2030, with a domestic industry worth $150 billion.²

Baidu, known as China’s answer to Google, is a prime example of how Asian companies are channeling resources into AI. The Beijing-based company employs several hundred AI scientists and operates two AI labs in California. It has deployed some of the world’s most advanced natural language recognition and translation technology, and recently received the go-ahead to test autonomous vehicles.

New technologies have always challenged incumbent enterprises. In 1960, the average lifespan of a typical company listed on the S&P 500 was 60 years. By 1990, it had fallen to 20 years, and has since shrunk further to about 12. Similarly, not every company experimenting with AI will succeed. Some may fail to deploy the right technology at the right time, or to anticipate how AI will impact their business models and the broader competitive landscape.

This is why in exploring AI-related investment opportunities, research at the individual company level and active management will be essential to identifying the best-positioned firms. The pace of technological change means relatively passive investment options such as exchange-traded or quant funds, which cannot react quickly enough to exploit rapid, innovation-driven sectoral changes, will be at a distinct disadvantage to actively managed products.

Fully tapping into AI-driven growth also means looking beyond the technology sector to other industries that will benefit from AI deployments. These include areas where data mining and analysis has strong potential to boost efficiency and outcomes, such as logistics, healthcare and genomics. Since Asia, and China in particular, is set to play a leading role in the development of AI going forward, it is also critical that investment strategies are global in scope, zeroing in on established and emerging companies with clear capacity to innovate across a range of markets.

The transformation being wrought by AI is just beginning. The technology is expected to really come into its own over the next few years, as governments and businesses around the world pool their collective resources into taking AI to the next level. At the same time, there is a social aspect to the growth story of AI, which like the disruptive technologies preceding it, will have profound implications for the way world works and plays.

Just as the Industrial Revolution triggered an unprecedented wave of growth and prosperity in a different era, we can expect AI to reinvigorate both the global economy and many aspects of daily life, by paving the way for more informed decisions, better delivery of services and enhanced end-user experience. Investing in AI therefore has the potential to cre ate value in more ways than one.