Investing in the ‘Fourth Industrial Revolution’: Why I joined White Star Capital as a Vice President

I started my career in investment banking, advising large companies in the technology, transportation, infrastructure, engineering, and fintech sectors, before joining CDPQ in their private equity team, investing and supporting portfolio companies of local entrepreneurs with global ambitions.

With this transactional background in the industrial and technology sectors, I’m excited to share more about my decision to join White Star Capital’s team in Montreal — a move that’s not just a step forward, but a leap into a world where industry meets innovation, and one in which I’m eager to make an impact.

Having started in this new role in early 2023, I’m delighted to share some of our research on the ever-evolving landscape of the fourth industrial revolution — a growing sector and upcoming investment focus for the team — a field where advancements in automation, robotics, AI, and data analytics are reshaping the world.

The shift is gaining momentum due to technological upheavals and overarching trends and anxieties associated with a potential worldwide recession, reshoring, skilled labor shortage, and sustainability initiatives.

The shifting landscape of industrial automation

There has been a gradual evolution in industrial automation in recent decades, accompanied by minimal shifts in the market framework. The drivers behind the adoption of industrial automation are shifting from cost reduction and productivity improvements to focusing on resilience, flexibility, and sustainability. The following technologies represent an outsized potential for impact in the coming years:

• Artificial intelligence and machine learning are redefining the business model by leveraging software development, real-time data analysis, predictive maintenance, safety risk detection, computer vision, and natural language processing, enhancing efficiency and enabling intuitive human-machine interaction.
• IoT adoption becoming widespread by small and medium enterprises seeking analysis of their IoT data with the decreasing cost of devices.
• Cloud computing excels in advanced analytics with large historic data sets, while edge computing enables real-time AI-powered decision-making tasks with millisecond precision and high data security.
• Teach-less robotics, enabled by AI, reduces programming time and enables smarter robots and cobots with little training. This area could benefit from tighter labor markets, exceeding current growth estimates. Advancements in environmental sensing would further accelerate adoption.
• Immersive technologies are reducing the developmental costs associated with design and demonstration processes, ultimately improving profitability for industrial enterprises.

Increasing productivity through intelligent process automation (IPA)

While robotic process automation has certainly reached full market penetration, we are seeing the explosion of AI-powered automation platforms and automation tools across the business and IT landscape.

The rise of intelligent process automation comprises:

1. Robotic process automation,
2. Artificial intelligence, and
3. Machine learning to streamline processes using advanced technologies and enhancements.

The growth of IPA is driven by several forces, including:

• Expected emergence of low-code technology to bypass lengthy manual coding processes and reach the final product more rapidly without putting extra workload on IT, developers, and data scientists.
• Widespread integration of AI-augmented natural language processing models designed for intelligent document handling. Automated software agents convert disorganized data into actionable content, facilitating the training of NLP models.
• Democratization of intelligent automation with small and medium-sized businesses (SMBs) quickly embracing various solutions as they become more affordable and increasingly easier to integrate.
• Increased adoption of smart workflow software tools for real-time, cross-platform work tracking with reduced overlap and miscommunication.
• Increased investments in hyper-automation with improved integration ease, user-friendliness, and applicability to achieve maximum efficiency and effectiveness by automating repetitive and routine tasks and more complex and decision-based processes.

For those interested in reading more on the subject, please check out our full report on the Fourth Industrial Revolution here.

In line with the trends above, White Star Capital has invested in leading companies such as:

• Vention is the first digital manufacturing platform dedicated to machine design. The company became the first and only design software and hardware platform certified by Universal Robots, the world’s largest collaborative robot manufacturer.
• Wrk is an enterprise software solution focused on automating tedious and time-consuming internal processes, freeing up time and energy for businesses. It is an abstraction layer on top of complicated automation frameworks, enabling users to drag and drop together pre-configured blocks called Wrk Actions.

As a global investment firm operating across North America, Europe, and Asia, White Star Capital is very well placed to become a leading investor in the space of industrial technology (among others) no matter where the next wave of innovative startups emerges from.

Please reach out if you’re interested in catching up or discussing some of the themes outlined above!