29 Jun 2020
Investcorp, a leading global provider and manager of alternative investment products, today outlined the key economic benefits and growth opportunities that could be brought about by a third wave of productivity improvements driven by digital automation in a newly released white paper, “Digital Process Automation: Driver of future economic growth”.
In its latest Insights series, Investcorp explores the value creation opportunities that the growing digital automation industries present, looking to machine-learning, AI, data lakes and business applications. Digital automation addresses a critical need for most companies allowing them to increase output and optimise costs, leading to both new revenue opportunities and higher profitability. Although the sector has shown itself to be crucial to growth and cost optimisation, we have witnessed disparities in adoption levels across industries and geographies. With digital potential realisation at only 12% in Europe, there is still significant white space, providing strong headroom for further penetration and scalability of these technologies.
Daniel Lopez-Cruz, Managing Director and Head of Investcorp’s European Private Equity business, said, “Despite significant digital transformation in recent years, we are still at a relatively early stage of adoption of a whole range of technological advancements that have the potential to impact all sectors across the world, albeit at varying rates. Digital adoption is a time-consuming and often capital-intensive process which deters many companies from taking the leap. We are encouraged however, by the attractive investment opportunities shown by automated technologies in large, growing and underserved end-markets. The slow and uneven diffusion of digital technologies across companies and countries suggests that the digitalisation process is likely to accelerate, as digital acceptance in most firms and sectors becomes irresistible. We have identified automated technology as a mega-trend which will provide attractive investment opportunities over a very long period of time.”
The white paper concludes that automation technologies are transforming businesses and will contribute not only to economic growth via productivity gains but will also create significant growth opportunities for individual businesses exposed either directly or indirectly to digital transformation.
Investcorp has been investing in tech-enabled businesses for 20 years and focuses on identifying companies that it considers to have established business models and are supported by long-term secular growth trends such as automation technology. The Firm is one of the leading European investors in lower mid-market technology companies with a specific focus on B2B, mission-critical software companies across the Data / Analytics, Cyber Security, Fintech / Payments and Internet / Mobility sectors.
For more information, download the complete white paper here.