Future of the Tech Economy
Dive into the global tech economy and explore how investors can benefit from its disruptive power.
Where are we now?
Where are we now?
Digital lifestyles are no longer a choice, but a necessity. We remain connected to our screens while trying to maintain healthy digital habits. The COVID-19 pandemic and the resulting lockdowns came as a major shock to many companies. To maintain business continuity, firms had to act quickly to ensure employees could work seamlessly from home. The consumer impact was much milder, as people took the measures in stride by enhancing their digital engagement.
We live in exciting times. While a potentially transformative innovation used to be a once-in-a-century phenomenon, the pipeline is now packed. Technology breakthroughs like quantum computing and fuel cells offer incredible potential to upend the global economy. Closer to the ground, areas like drones and 3D printing are already providing a glimpse into what the future holds.
This confluence of technology and economic forces is what we call techonomics, or the tech economy. In our latest report in the 'Investing in the Future' series, we navigate through both the current and future digital trends as well as providing investment opportunities in technology.
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Dive deeper into the topic "Future of the Tech Economy"
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Dive deeper into the topic "Future of the Tech Economy"
Moonshots: What are the next breakthrough technology trends?
Moonshots: What are the next breakthrough technology trends?
In a technology context, moonshots are innovations that, conceptually, have tremendous disruptive potential. We see 4 moonshots that, though commercially unviable today, hold significant long-term promise:
- Quantam computing: Quantum computing has the potential to transform the high-end computing market, with consumers leveraging the technology through cloud-based business models. We anticipate multiple use cases for quantum computing across sectors like financials, healthcare, industrials, materials and energy.
- Neural interfaces: Widely spoken of as the next step in human evolution… but we're not quite there yet. But with governments and companies investing heavily, and with significant progress being made in technologies like AI, we are hopeful that by end of this decade neural interfaces will become a mainstream technology.
- Battery technology: Significant progress has been made in battery technology over the past few decades and companies are working hard to address challenges. Assuming most hurdles are cleared over the next 5–10 years, solid-state batteries could revolutionize the way electric vehicles, smartphones storage systems, and other consumer electronics are powered.
- Fuel cells: Although fuel cells have often been praised for their many advantages, predictions of major breakthroughs in their mass application have so far proven broadly premature. But we think that the search for sustainable sources of energy should give fuel cells a new lease on life.
How to invest in the tech economy
How to invest in the tech economy
- Faster rates of change and growth come with higher rates of failure. Investors should diversify across trends and technologies, and can consider both mainstream and moonshot technologies. Choose disruptors, avoid laggards. Diversify among leaders in different spaces and across the themes identified in this report.
- The fourth industrial revolution is just beginning, and yet it has already reshaped entire industries. Meanwhile, the COVID-19 pandemic is accelerating e-commerce and digital data penetration. Seek exposure to big platforms and key enabling technologies like mobile, cloud, big data, and social, as well as emerging ones like blockchain and AI.
- Everything is going digital, even money. This shift has significant ramifications for the global economy, from retirement ages to productivity. The Fintech Longer-term Investment theme offers exposure to the transforming financial industry.
- The world’s major regions have developed unique strengths in technology and labor. In the race to secure technological leadership, governments are looking to enhance their competitive advantages. Investors should diversify among regions to combine these diverse strengths in their portfolios.
- Promising new tech areas like AI, 3D printing, drones, and cybersecurity are in the midst of becoming mainstream. Even the big IT platforms will need to adapt in the decade ahead. Select leaders in each of these spaces. Attractive opportunities can be found among mid-cap and big platform companies alike.
- Sustainability is a key tenet of the tech economy, whether the focus is on education, agriculture, automation, or energy. Investors can support this trend through sustainable investing strategies, which aim to achieve a positive environmental or social impact while delivering market-rate returns.
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