Frontier technology: the next wave…

There is a cluster of new technologies in development right now that will transform the way we live – for both good and, if not effectively regulated, for ill, writes Victor Hill.

This month I’m looking at technologies which have multiple applications and can all be used to expand our mental horizons. However, they can also be used for increased surveillance. Indeed, we may all find ourselves living in surveillance states where Big Brother is not only watching us but predicting our every next move. On the other hand, we shall have more leisure time which we can use for such things as virtual-reality vacations.

The future is bright – even if slightly weird. But investors who follow the technology curve judiciously will at least get rich.

Virtual reality: the latest thinking

While many people are hugely impressed by their first experience of virtual reality (VR), sales of VR headsets have been disappointing and many purchasers discard the devices quickly like last year’s toys. If VR has not taken root as a form of home entertainment, it has been embraced in the commercial world; VR headsets can be excellent training tools for pilots and astronauts for example. Oneapplication, however, of VR technology that could make a huge difference to the way  we live is virtual tourism.

Last month, Sir David Attenborough proposed that nature lovers should use virtual reality to visit endangered ecosystems like that of Madagascar without generating carbon emissions or encroaching on the habitats of endangered species. Doug Allen, the BAFTA-winning freelance wildlife photographer who worked with Sir David on Blue Planet and Frozen Planet also suggested that filmmakers should embrace new technologies so that people can experience the natural world without damaging it and littering it with plastic.

In a small way, this is already happening. Last year Sky VR (a subsidiary of Comcast Corporation (NASDAQ:CMCMA)) generated a hologram of Sir David and offered a VR headset experience which allows users to explore prohibited areas of the Natural History Museum.

The idea of virtual tourism is not entirely new. Many readers will be familiar with Philip K Dick’s celebrated story, Total Recall, which was turned into a Hollywood blockbuster starring Arnie Schwarzenegger. In the story, the protagonist, played by Arnie, visits Mars on vacation – but it is never clear whether he literally undertakes the journey (and attendant adventures) or whether he just dreams it in a state of consciousness induced by a VR machine. (Dick’s stories are nearly always ambiguous – you can take away what you want).

I agree that many people will react negatively to this concept: after all, VR is not real. But if, as I believe is likely, many people will take against flying in the near future on environmental grounds, it is quite possible that they will want to experience the marvels of the natural world like the Grand Canyon or Victoria Falls – not to mention man-made marvels like the pyramids of Giza – through VR headsets. Such virtual travel will also be much more economical than the real thing, so it will be good for one’s wallet as well as one’s conscience.

Robots who/which feel pain

Scientists in South Korea at the Daegu Gyeongbuk Institute of Science and Technology are trying to engineer robots that feel pain. The idea is apparently that robots which are capable of experiencing pain will be more empathetic to their human progenitors (and presumably to animals too). This might make intelligent machines less inclined to kill us; and conversely more inclined to be nice to us.


They hope to achieve this by giving robots an electric skin which would be covered in sensors replicating human and animal nerve cells. These sensors could replicate touch, for example by enabling the robot to tell the difference between a hot and a cold surface. If the surface is so hot that the ’skin’ may be damaged, the robot would experience something akin to pain. Of course, whether that is really ’pain’ or an electronic replication of a human pain response is a philosophical question to be considered elsewhere.

Robot surgeons

British robotics specialist CMR Surgical is planning to launch a robot surgeon called Versius before the end of this year. The machine will be able to perform keyhole surgery on NHS patients, for example to remove cancerous tumours from organs. The Cambridge-based firm is in the process of raising fresh funds, having raised $100 million last year including, from Chinese private-equity firm Zhejiang Silk Road Finance, as well as European venture-capital funds such as Escala Capital.

CMR Surgical has competition in this space. Intuitive Surgical (NASDAQ:ISRG), a US robotics firm, has operated itsda Vincirobot surgeon in NHS hospitals for years. The NHS now has 70 da Vinci surgical robots. The US pharma, medical equipment and consumer products giant Johnson & Johnson (NYSE:JNJ) is also working on a robot surgeon. It has partnered with Alphabet/Google (NASDAQ:GOOG) subsidiary Verb Surgical on this project. Earlier this year JNJ acquired medical robotics firm Auris Health. It seems that robots are better at keyhole surgery than human surgeons because they are better coordinated and can do several things at the same time.

Cambridge is the centre of what is now called ‘Silicon Fen’which is home to an estimated 430 life-science companies as well as the internationally renowned teaching hospital, Addenbrooke’s Hospital. Historically, Cambridge was a centre of excellence in therapeutics; but these days it is primarily a centre for medical research, combining engineering skills, materials sciences and life sciences. It is reported that Silicon Fen companies have raised over £500 million this year.

Voice recognition technology: enter the dragon

Amazon (NASDAQ:AMZN) is developing a voice-activated wearable device which can read human emotions and determine whether people are angry, happy or sad depending on their tone of voice. The device, code-named Dylan, which is being launched as a health and wellness tool rather like those which monitor athletic performance, might be adapted to offer people counselling on how they should interact with others.

Amazon is developing the device in collaboration with Lab126, the hardware research group which helped to develop Alexa, Amazon’s virtual assistant, of which 100 million have been sold since becoming available in 2014. Speech analysis can even be used to determine if someone is ill even if they are not present (ie over the phone). We know that Amazon has been making inroads into the healthcare sector. Last year the tech giant bought PillPack, a US start-up which delivers medication through the postal system.

Facial recognition technology

Last month it was announced that Gatwick Airport will become the first British airport to use facial- recognition technology on eight departure gates after its main runway extension is completed in 2022.Heathrow is expected to make a similar announcement later this year.

The technology will allow passengers to walk through security control and to board their flight, potentially without queueing or scanning their boarding cards. Gatwick is already trialling iris- recognition technology which can detect the unique pattern of passengers’ eyes from some distance. This technology has the potential to make passengers’ airport experience smoother and more enjoyable.


Two years ago, Dubai International Airport replaced security screening with a VR aquarium tunnel in which 80 integral cameras scan passengers’ faces. The top 20 airports in the US will use facial- recognition technology to allow passengers to board their flights by the end of 2021.

A survey of over 4,000 adults by the market-research firm YouGov on behalf of the independent research organisation, the Ada Lovelace Institute, reported last month that two thirds of people in the UK approve of facial-recognition technology by the police so long as it is regulated. There is far less tolerance of its use by private companies, however.

Computers that can read body language

Recently I’ve noticed a lot of online posts about the body language of political leaders when they meet. A good example was when UK Prime Minister Johnson met French President Macron on 22 August. Expert body-language analysts can read all kinds of significance into small, unconscious hand or facial gestures which, even if the humans involved are good liars, involuntarily betray what is really going on inside their heads.

Now consider if all of that expertise, exhibited by body-language specialists like Judi James, could be fed into a computer. Given that computers can capture information faster and process it more intricately than mere human experts, they could become extraordinarily effective tools for analysing human interactions. And it’s already happening.

A team of researchers at Penn State University is investigating whether modern computer vision systems could match the cognitive ability of humans to interpret human body language. Such technology has many applications. Computers and robots in the future will be interacting constantly with people. Robots and computers will be required to act more like partners to humans and work together with them. To that end, they’ll need to understand human emotions.

It turns out that people are quite effective at manipulating their facial expressions, but much less effective at controlling their bodies. Researchers at Penn State used computer vision methods to track people’s gestures. They were available to train the system to recognise a very wide and subtle range of emotions[i].

Surveillance, Chinese style

It is estimated that across the UK more than one million CCTV cameras have been installed which are made in China. These are now in place in hospitals and universities, as well as on buses and in trains. Most of these devices are manufactured by a few Chinese companies which are probably just as much a part of the Chinese state apparatus as Huawei. Hikivision (SHE:002415) has a market cap of $322 billion. An estimated 176 million of its video surveillance cameras are used on Chinese streets according to HIS Markit. All of these cameras are connected to its facial-recognition systems, not least in the province of Xinjiang where elements of the indigenous Uighur and Kazakh populations have been in near revolt. Dahua is a Chinese tech company which excels in surveillance, drones and thermal cameras. Lincoln City Council uses their equipment. SenseTime (private) produces software which underpins facial-recognition systems. CloudWalk has sold its facial-recognition software to the government of Zimbabwe.

More surveillance worries: digital ’fingerprinting’

’Fingerprints’ are the digital traces that your laptop and smartphone leave behind as they browse the internet. These include, as well as your IP address, the make and model of your device, your screen resolution, operating system, browser settings, language and your time zone. Most of us resent the tech titans trailing us around the internet so as to “harvest” (horrible verb) our data for their own purposes. But you can be sure they are always at least one step ahead of us.

Fingerprinting is an undetectable technology that was first unveiled in 2010, since when it has become smarter and more subtle. All the data that you leave behind when you browse the web can be calibrated so as to create a unique online signature that identifies you and your personal profile in a much more precise way than advertisers’ cookies which (have you noticed?) you have to approve before viewing most sites these days. Apparently, even installing an ad blocker, deleting cookies or enabling “do not track” on your browser can leave traces. What seems clear is that huge numbers of websites are collecting information from your system that will allow them to construct a fingerprint.

A study undertaken by Royal Holloway University of London and Manchester Metropolitan University found that some of the most enthusiastic collectors of personal data include Russian browser Yandex, DoubleClick (offered by Google, now known as GMP) and Skimlinks.


In May this year, Google’s advertising and commerce supremo Prabhakar Raghavan, said that the company would make it harder for advertisers to use “opaque tracking techniques” such as fingerprinting. Last year, Apple said it would be cracking down on fingerprinting by updating its Safari browser such that it would supply websites with only generic data about MacBook users.

Apple up

Apple’s (NASDAQ:AAPL) new iPhone 11 and iPhone 11 Pro, unveiled at Apple’s Silicon Valley HQ in early September, have cameras fine-tuned for the age of Instagram (owned by Facebook (NASDAQ:FB)). It can take photos in minimal light, for example at concerts – and even slow-motionselfies(whatever they are). iPhone sales are now thought to account for less than half of the tech giant’s revenues.

Cars that monitor their drivers

If we are being tracked by advanced face-recognition technology, do not imagine that you can escape surveillance while driving your car. Very soon, cars will be monitoring your driving habits and assessing your competence to drive.

Within the next few months the EU is likely to approve proposals that will make 15 in-car monitoring devices mandatory within the next three years. It calls these devices advance driver assistance systems (ADAS). Other parts of the world are considering similar measures.

Five of the monitoring devices are as follows: an intelligent speed assistant will recommend the appropriate speed for the road you are driving, given traffic and weather conditions and so forth; sensors will analyse your breath for its alcohol content and will stop you from starting the car if it determines that you have had a drink too many (or at all); then cameras will use eye-tracking technology to warn you if you are getting drowsy (one in five European drivers admits to having fallen asleep at the wheel in the past two years − in some cases causing accidents); cameras which monitor road markings will assist drivers to maintain better lane-keeping discipline; and black boxes will record all relevant data, which can be consulted in the event of an accident – just as black boxes are used to determine the cause of aeroplane crashes.

The EU estimates that the new monitoring technology will save over 7000 road deaths and nearly 40,000 serious injuries a year by 2030 (the current level across the EU is 25,300 road deaths and 135,000 serious injuries a year). If this estimate is correct, then the introduction of ADAS will have an equivalent impact to the advent of mandatory seat belts in the early 1970s. Most road-traffic accidents occur, so it is argued, because drivers either involuntarily or deliberately break the rules.

Driver-assistance systems are not entirely new. Automatic braking systems – which slow the vehicle down if it gets too close to another one – are already fitted to some new cars. One study in the US shows that automatic braking halves the incidence of rear-end crashes. Moreover, in the US, insurers have incentivised drivers to fit black boxes to their cars by reducing their insurance premiums accordingly.

The main concern about ADAS is that drivers might become complacent about their driving, thinking that the machines will always correct their mistakes. Another is that by adding more advanced technology to vehicles, they could become potential targets for hackers. A third concern is that drivers will be monitored by the government. But it’s worth noting that the proposed EU rules require that drivers cannot be identified from any of their recorded data except in the case of an accident.

Self-driving cars: the problem of bugs (as in insects)

Last month the global car giant Ford (NYSE:F) announced that it was facing a new challenge in the development of self-driving cars: insects. Other operators, including Uber (NYSE:UBER) have developed systems to counter the problem of bugs (the American term for insects) which arises because the sensors can be splattered by dead insects adhering to their surfaces. One possible solution is to use tiny air jets to deflect the bugs from landing on the sensors.

New thinking about the rise of robots

Many people fear that the rise of robots will cause mass unemployment as robots displace people in the workplace, from unskilled labour to highly skilled professionals. Some people, including Bill Gates, the founder of Microsoft, have argued that robots should be taxed so as to finance the social consequences of this new wave of unemployment. Others, like the economist Roger Bootle in his new book[ii], think that this is the wrong way to look at the issue. He envisages that robots will empower people to do the work that they want to do and will give them more options in terms of weighing up their life-work balance.


The fact is that people are currently working as hard as they ever did – and many people would appreciate more leisure time. Roger Bootle cites the work of the Harvard historian Juliet Schor who estimated that in Europe around 1300 ordinary peasants took about one third of the year off on account of holy days (note the etymology of the word holiday) and feasts. People only started to work very long hours after the onset of the industrial revolution, though average hours worked have been in decline for about 150 years. Between 1870 and 1998 in the industrialised world the number of hours worked per employee per annum almost halved (from 2,950 hours to 1,500). In the UK the average working week has declined from about 59 hours in the mid-19^thcentury to about 32 hours today.

There is some evidence, however, that since the advent of the digital age (which can be dated to the mid-1990s) people have tended to work longer hours. This is because they are answering work-related emails from home in what is officially their leisure time and so forth. In the internet age the distinction between time at work and time at leisure has become blurred.

While it is true that many people in part-time work would welcome more hours of work and thus more income, there are also many people who crave more leisure time. Moreover, in some countries the working week is still extremely long. Danes work on average just 1,595 hours per year (200 hours fewer than the OECD average), while Koreans work 2,232 hours annually (473 hours more than the OECD average). It is not surprising then that social scientists report higher levels of happiness and well-being in Denmark than Korea. This is partly because countries with the shortest working weeks also have the largest number of volunteers (think of the charity-shop sector in the UK) and thus more social capital.

How will shorter working hours be reflected in work practices? The idea of a two-day weekend is a rather recent one. Most societies historically operated a six-day working week with a day of rest – the Sabbath – being observed for both religious and social purposes. Most workers worked on Saturday mornings in the UK until the mid-20^thcentury and in Japan right up until the 1980s.

Now the idea of a hard and fast two-day weekend is being challenged. In 2018, the New Zealand estate-management company Perpetual Guardian (ASX:PPT) adopted a four-day working week with a three-day weekend. In the UK, The Wellcome Trust experimented with a four-day week for its 800 employees but eventually decided against it, citing disruption of work schedules. Glasgow-based marketing firm Pursuit Marketing switched to a four-day week three years ago, giving all employees Fridays off without cutting pay. The company claims that productivity has increased by 30 percent. TUC General Secretary Frances O’Grady is among those calling for a four-day week and it has been considered as a potential electoral promise by the Labour Party.

On 18 September the House of Commons Business, Energy and Industrial Strategy Committee reported that: “The real danger for the UK economy is not that we have too many robots in the workplace but that we have too few”.

Robotics hubs: Bristol versus Boston

The city of the great engineer Isambard Kingdom Brunel (1806-59) is now one of the UK’s most important tech hubs. Today, Bristol is home to giant British tech champions such as Dyson (private), BAE Systems (LON:BA), Airbus (EPA:AIR) and Rolls-Royce (LON:RR). It is also home to Bristol University and the University of the West of England (UWE). Their symbiosis is proving highly effective. It has resulted in 3D-printed bionic limbs, robotic animals and futuristic wheelchairs.

The Future Space building at UWE is home to a number of tech start-ups such as Open Bionics (private) which manufactures mechanical arms for child amputees. Since offering its products in the US five years ago, the company has raised $8 million there in capital. Another player in town is Consequential Robotics run by designer Sebastian Conran, which makes animal-like robots. These can be used, amongst other things, to assist in the care of the elderly. Then there is Service Robotics which is also testing robot-carers. Other Bristol-based tech start-ups include Graphcore (semiconductors for machine learning), Ultrahaptics (which can create the sensation of touch in mid-air), Immersive Labs (cyber-security) and FiveAI (driverless cars).


In the US, the Massachusetts Institute of Technology (MIT) in Cambridge has developed the most nimble robot yet. It is a nine-kilogram mobile ’cheetah’ which can cope with almost any terrain and, if not as fast as a real cheetah, it is twice as fast as a human. At the other end of the scale, MIT has been working on a micro-robot that could be put into a capsule and swallowed. Once it unfurls inside the body it could be used to perform internal surgery.

It is estimated that there are now about 200 companies working on robotics in the Cambridge-Boston area. iRobot has commercialised robots that can perform domestic chores such as vacuuming the carpets and mowing the lawn. Tenants at MassChallenge, a robotics accelerator in Cambridge, have developed prototype robots that can crawl through pipes to detect cracks and leaks; drones used in agriculture; and an interface that makes programming robots to perform tasks more straightforward.

Brain-machine interfaces

In the March edition of this magazine, in my article about emerging cyborg technology, I mentioned that Elon Musk, the founder of both SpaceX and Tesla (NASDAQ:TSLA) has an interest in the new field of brain-machine interfaces (BMI) It seems that his BMI start-up, Neuralink, has already been experimenting on rats and monkeys. Neuralink wants to start trials on humans next year. It has reportedly raised $150 million in capital (of which $100 million from Mr Musk) since its foundation in 2016.

In July Mr Musk announced plans to implant computer chips into human brains.Let’s be clear: Mr Musk is afraid that AI might surpass human reasoning very quickly. He has talked and tweeted about “summoning a demon”. Therefore, he regards enhancing the human brain through computer science as an essential defensive strategy to ensure our survival.

Neuralink claims to have produced a 4×4 millimetre chip which would connect to about one thousand synapses through four holes drilled into the human skull. The chip would then be connected to a smartphone. All this would require the imprimatur of the US Food and Drug Administration (FDA), which is questionable. More significantly, critics suggest that the trials are entirely experimental: there is still no proof that intelligence can be enhanced by implants.

At the same time human beings’ interaction with technology is already changing their performance. Most people use their smartphone as constant companions. So, we are already in a state of brain-machine interface without having intrusive surgery. How far it might go is a function of ethics and philosophy as much as of technology.

Action

The above is a brief and non-exhaustive overview of the welter of new technologies which are going to change the way we live quite soon – within the next five-10 years. Most of these technologies are well beyond the research phase and into the engineering and design phases.

Regarding VR vacations, it seems to me that Netflix (NASDAQ:NFLX) and its rival in subscription entertainment, Apple (NASGAQ:AAPL) are well placed to run with this particular ball.

Given that all of the start-ups cited in this article are unlisted entities, the only way to get exposure to the next wave of technology is through an investment fund which allocates to incubators. Or, for those with big enough wallets, this is a good moment to allocate to private equity firms with a frontier tech bias like Escala Capital Investments, based in Madrid. For those with smaller wallets, Scottish Mortgage Investment Trust (LON:SMT) invests in companies that are disruptors in their respective fields, with many of its holdings unlisted entities.

At the same time, Alphabet/Google and Amazon are  increasingly acting as technology incubators. A good technology fund like the Janus Henderson Technology Fund allocates to all the usual suspects and was up in value by 8 percent to the end of August.

For more proactive investors with specialist knowledge, it might well be worth a visit to Silicon Fen.

[i]See: https://techxplore.com/news/2019-09-body-language.html

[ii]The AI Economy – Work, Wealth and Welfare in the Robot Age, by Roger Bootle. See: https://www.amazon.co.uk/AI-Economy-Wealth-Welfare-Robot/dp/147369616X/ref=sr_1_1?crid=1Y45UIC7KD5CG&keywords=roger+bootle&qid=1568714138&s=books&sprefix=Roger+Bootl%2Caps%2C327&sr=1-1