Across Asia, early adopters are reshaping business models in industries such as retail, logistics and healthcare. While these changes will prove disruptive for some incumbents, they will also enhance efficiencies and create value for consumers, end-users and, ultimately, investors.

China’s online grocery market is expected to triple to US$178 billion in 2020. Smart logistics and big data analytics are expected to help companies save costs by achieving greater supply chain efficiencies, while delivering a more convenient shopping experience for the consumer.

From an investment point of view, it’s important to recognise these shifts mean technology, and Asian enterprises, are no longer governed by traditional sector boundaries. Chinese Internet giant Alibaba is now an important provider of financial services. Some home appliance makers are venturing into robotics. Exploring this trend therefore means going beyond dedicated AI or tech stocks to explore a wide spectrum of companies in Asia driving, or benefiting from, technological innovation in myriad different ways.

At the same time, past experience has shown innovation is often accompanied by periods of high valuations – such as the dot-com boom of the late 1990s, when, swept up in the excitement, investors effectively overpaid for chances to enjoy future growth potential. It’s critical to keep in mind that innovation by no means automatically results in the productivity or business enhancements that drive equity gains – and that such gains can take years after an innovation emerges to surface.

The difficulty of assessing the investment impact of technological change, particularly with the pace of change increasing, is a clear argument for a hands-on asset management approach that identifies the ‘disrupting’ companies and sectors poised to benefit from innovation over the long term.

This is particularly true in Asia, given the complexity and dynamic nature of the region’s markets, as well as the rapid overturning of once-entrenched business models. Passive strategies tend to be tied to just a few key companies or sectors, meaning they struggle to capture the full range of opportunities on offer, and to predict and capitalise on change quickly enough.

Asia’s new realities require active and holistic asset management informed by experts who can collaborate across industries and geographies to identify the likely winners and losers in the region’s innovation drive; draw connections that may not be immediately apparent to reflect the blurring of traditional sector lines; and anticipate rather than respond to the forces that will foster future value.