Closeup of a computer chip being assembled by a machine

Digital transformation has arrived in the industrial sector. At Baird’s Global Industrial Conference this past November, Baird hosted a compelling panel to discuss the digital transformation trends that are fueling change in the industrial space.

Ted Mortonson, Baird’s Technology Desk Sector Strategist, moderated the discussion, which featured a range of institutional investor perspectives: Archie Foster, Managing Director and Head of Thematic Equities at Citi; Jessica Katz, Co-Portfolio Manager on Small and SMID-cap Growth at Goldman Sachs; John Segrich, Founder and Chief Investment Officer at Clear Sky Advisers; and Neville Shah, Founder and Chief Investment Officer at Kodai Capital Management


“In terms of automation, what’s gotten us here is the continuous evolution and use of semiconductors, sensors and software, and the increased power that you continually get from iteration over iteration of this,” said Foster. Katz added, “I think there’s a lot of low-hanging fruit on the automation side, that you can sort of stage things as you go to increase your productivity.”

Digital Design and Digital Twin Technologies

“We’re definitely seeing a lot of digital design and that’s certainly allowed for a far quicker design cycle – and a lot of the simulation as well, in terms of really improving the underlying technologies,” said Segrich. Foster feels digital twinning presents a major opportunity: “That’s going to be a major player as you go forward, especially with infrastructure, reshoring and things like that. I think that market is going to grow a lot.”

Artificial Intelligence (AI)

Shah highlighted the strengthening connection of AI and the automotive industry. “The car is essentially just becoming an AI supercomputer on wheels,” he said, calling out the growing appetite for computing technology, software and sensors in the auto sector. “I think there’s going to be a ton of consolidation in the sensor space.”

AI is also poised to find its way into edge devices, according to Shah. “You’re going to see more and more compute [power] going into each of these edge devices, and it’s going to have security and some level of AI. I think AI, which started more in the cloud, is going to proliferate more and more to the edge.”


Katz highlighted types of technology that appeal to her team, including robotics and factory automation. “[This] isn’t a new concept, but I think what we’re seeing more recently is enhancements around those robotics.” Foster echoed that sentiment: “You're starting to see an evolution of the robot coming from very specific applications… picking, sorting or in the auto industry, painting and welding and things like that. And you're going to move that to more broad applications across the factory floor.” Drivers of this trend will include a move to smaller robots or cobots, increased functionality and machine vision.


Meet the Panel

Archie Foster

Panelist: Archie Foster
Managing Director and Head of Thematic Equities, Citi

Jessica Katz

Panelist: Jessica Katz
Co-Portfolio Manager on Small- and SMID-Cap Growth, Goldman Sachs

John Segrich

Panelist: John Segrich
Founder and Chief Investment Officer, Clear Sky Advisers

Neville Shah

Panelist: Neville Shah
Founder and Chief Investment Officer, Kodai Capital Management

Ted Mortonson

Moderator: Ted Mortonson
Technology Desk Sector Strategist, Baird