These 7 Disruptive Technologies Could Be Worth Trillions of Dollars

June 29, 2017

Scientists, technologists, engineers, and visionaries are building the future. Amazing things are in the pipeline. It’s a big deal. But you already knew all that. Such speculation is common. What’s less common? Scale.

How big is big?

“Silicon Valley, Silicon Alley, Silicon Dock, all of the Silicons around the world, they are dreaming the dream. They are innovating,” Catherine Wood said at Singularity University’s Exponential Finance in New York. “We are sizing the opportunity. That’s what we do.”

Catherine Wood at Exponential Finance.

Wood is founder and CEO of ARK Investment Management, a research and investment company focused on the growth potential of today’s disruptive technologies. Prior to ARK, she served as CIO of Global Thematic Strategies at AllianceBernstein for 12 years.

“We believe innovation is key to growth,” Wood said. “We are not focused on the past. We are focused on the future. We think there are tremendous opportunities in the public marketplace because this shift towards passive [investing] has created a lot of risk aversion and tremendous inefficiencies.”

In a new research report, released this week, ARK took a look at seven disruptive technologies, and put a number on just how tremendous they are. Here’s what they found.

(Check out ARK’s website and free report, “Big Ideas of 2017,” for more numbers, charts, and detail.)

1. Deep Learning Could Be Worth 35 Amazons

Deep learning is a subcategory of machine learning which is itself a subcategory of artificial intelligence. Deep learning is the source of much of the hype surrounding AI today. (You know you may be in a hype bubble when ads tout AI on Sunday golf commercial breaks.)

Behind the hype, however, big tech companies are pursuing deep learning to do very practical things. And whereas the internet, which unleashed trillions in market value, transformed several industries—news, entertainment, advertising, etc.—deep learning will work its way into even more, Wood said.

As deep learning advances, it should automate and improve technology, transportation, manufacturing, healthcare, finance, and more. And as is often the case with emerging technologies, it may form entirely new businesses we have yet to imagine.

“Bill Gates has said a breakthrough in machine learning would be worth 10 Microsofts. Microsoft is $550 to $600 billion,” Wood said. “We think deep learning is going to be twice that. We think [it] could approach $17 trillion in market cap—which would be 35 Amazons.”

2. Fleets of Autonomous Taxis to Overtake Automakers

Wood didn’t mince words about a future when cars drive themselves.

This is the biggest change that the automotive industry has ever faced,” she said.

Today’s automakers have a global market capitalization of a trillion dollars. Meanwhile, mobility-as-a-service companies as a whole (think ridesharing) are valued around $115 billion. If this number took into account expectations of a driverless future, it’d be higher.

The mobility-as-a-service market, which will slash the cost of “point-to-point” travel, could be worth more than today’s automakers combined, Wood said. Twice as much, in fact. As gross sales grow to something like $10 trillion in the early 2030s, her firm thinks some 20% of that will go to platform providers. It could be a $2 trillion opportunity.

Wood said a handful of companies will dominate the market, and Tesla is well positioned to be one of those companies. They are developing both the hardware, electric cars, and the software, self-driving algorithms. And although analysts tend to look at them as a just an automaker right now, that’s not all they’ll be down the road.

“We think if [Tesla] got even 5% of this global market for autonomous taxi networks, it should be worth another $100 billion today,” Wood said.

3. 3D Printing Goes Big With Finished Products at Scale

3D printing has become part of mainstream consciousness thanks, mostly, to the prospect of desktop printers for consumer prices. But these are imperfect, and the dream of an at-home replicator still eludes us. The manufacturing industry, however, is much closer to using 3D printers at scale.

Not long ago, we wrote about Carbon’s partnership with Adidas to mass-produce shoe midsoles. This is significant because, whereas industrial 3D printing has focused on prototyping to date, improving cost, quality, and speed are making it viable for finished products.

According to ARK, 3D printing may grow into a $41 billion market by 2020, and Wood noted a McKinsey forecast of as much as $490 billion by 2025. “McKinsey will be right if 3D printing actually becomes a part of the industrial production process, so end-use parts,” Wood said.

4. CRISPR Starts With Genetic Therapy, But It Doesn’t End There

According to ARK, the cost of genome editing has fallen 28x to 52x (depending on reagents) in the last four years. CRISPR is the technique leading the genome editing revolution, dramatically cutting time and cost while maintaining editing efficiency. Despite its potential, Wood said she isn’t hearing enough about it from investors yet.

“There are roughly 10,000 monogenic or single-gene diseases. Only 5% are treatable today,” she said. ARK believes treating these diseases is worth an annual $70 billion globally. Other areas of interest include stem cell therapy research, personalized medicine, drug development, agriculture, biofuels, and more.

Still, the big names in this area—Intellia, Editas, and CRISPR—aren’t on the radar.

“You can see if a company in this space has a strong IP position, as Genentech did in 1980, then the growth rates can be enormous,” Wood said. “Again, you don’t hear these names, and that’s quite interesting to me. We think there are very low expectations in that space.”

5. Mobile Transactions Could Grow 15x by 2020

By 2020, 75% of the world will own a smartphone, according to ARK. Amid smartphones’ many uses, mobile payments will be one of the most impactful. Coupled with better security (biometrics) and wider acceptance (NFC and point-of-sale), ARK thinks mobile transactions could grow 15x, from $1 trillion today to upwards of $15 trillion by 2020.

In addition, to making sharing economy transactions more frictionless, they are generally key to financial inclusion in emerging and developed markets, ARK says. And big emerging markets, such as India and China, are at the forefront, thanks to favorable regulations.

“Asia is leading the charge here,” Wood said. “You look at companies like Tencent and Alipay. They are really moving very quickly towards mobile and actually showing us the way.”

6. Robotics and Automation to Liberate $12 Trillion by 2035

Robots aren’t just for auto manufacturers anymore. Driven by continued cost declines and easier programming, more businesses are adopting robots. Amazon’s robot workforce in warehouses has grown from 1,000 to nearly 50,000 since 2014. “And they have never laid off anyone, other than for performance reasons, in their distribution centers,” Wood said.

But she understands fears over lost jobs.

This is only the beginning of a big round of automation driven by cheaper, smarter, safer, and more flexible robots. She agrees there will be a lot of displacement. Still, some commentators overlook associated productivity gains. By 2035, Wood said US GDP could be $12 trillion more than it would have been without robotics and automation—that’s a $40 trillion economy instead of a $28 trillion economy.

“This is the history of technology. Productivity. New products and services. It is our job as investors to figure out where that $12 trillion is,” Wood said. “We can’t even imagine it right now. We couldn’t imagine what the internet was going to do with us in the early ’90s.”

7. Blockchain and Cryptoassets: Speculatively Spectacular

Blockchain-enabled cryptoassets, such as Bitcoin, Ethereum, and Steem, have caused more than a stir in recent years. In addition to Bitcoin, there are now some 700 cryptoassets of various shapes and hues. Bitcoin still rules the roost with a market value of nearly $40 billion, up from just $3 billion two years ago, according to ARK. But it’s only half the total.

“This market is nascent. There are a lot of growing pains taking place right now in the crypto world, but the promise is there,” Wood said. “It’s a very hot space.”

Like all young markets, ARK says, cryptoasset markets are “characterized by enthusiasm, uncertainty, and speculation.” The firm’s blockchain products lead, Chris Burniske, uses Twitter—which is where he says the community congregates—to take the temperature. In a recent Twitter poll, 62% of respondents said they believed the market’s total value would exceed a trillion dollars in 10 years. In a followup, more focused on the trillion-plus crowd, 35% favored $1–$5 trillion, 17% guessed $5–$10 trillion, and 34% chose $10+ trillion.

Looking past the speculation, Wood believes there’s at least one big area blockchain and cryptoassets are poised to break into: the $500-billion, fee-based business of sending money across borders known as remittances.

“If you look at the Philippines-to-South Korean corridor, what you’re seeing already is that Bitcoin is 20% of the remittances market,” Wood said. “The migrant workers who are transmitting currency, they don’t know that Bitcoin is what’s enabling such a low-fee transaction. It’s the rails, effectively. They just see the fiat transfer. We think that that’s going to be a very exciting market.”

https://singularityhub.com/2017/06/16/the-disruptive-technologies-about-to-unleash-trillion-dollar-markets/

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The World in 2025: 8 Predictions for the Next 10 Years

August 2, 2015

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In 2025, in accordance with Moore’s Law, we’ll see an acceleration in the rate of change as we move closer to a world of true abundance. Here are eight areas where we’ll see extraordinary transformation in the next decade:

1. A $1,000 Human Brain

In 2025, $1,000 should buy you a computer able to calculate at 10^16 cycles per second (10,000 trillion cycles per second), the equivalent processing speed of the human brain.

2. A Trillion-Sensor Economy

The Internet of Everything describes the networked connections between devices, people, processes and data. By 2025, the IoE will exceed 100 billion connected devices, each with a dozen or more sensors collecting data. This will lead to a trillion-sensor economy driving a data revolution beyond our imagination. Cisco’s recent report estimates the IoE will generate $19 trillion of newly created value.

3. Perfect Knowledge

We’re heading towards a world of perfect knowledge. With a trillion sensors gathering data everywhere (autonomous cars, satellite systems, drones, wearables, cameras), you’ll be able to know anything you want, anytime, anywhere, and query that data for answers and insights.

4. 8 Billion Hyper-Connected People

Facebook (Internet.org), SpaceX, Google (Project Loon), Qualcomm and Virgin (OneWeb) are planning to provide global connectivity to every human on Earth at speeds exceeding one megabit per second.

We will grow from three to eight billion connected humans, adding five billion new consumers into the global economy. They represent tens of trillions of new dollars flowing into the global economy. And they are not coming online like we did 20 years ago with a 9600 modem on AOL. They’re coming online with a 1 Mbps connection and access to the world’s information on Google, cloud 3D printing, Amazon Web Services, artificial intelligence with Watson, crowdfunding, crowdsourcing, and more.

5. Disruption of Healthcare

Existing healthcare institutions will be crushed as new business models with better and more efficient care emerge. Thousands of startups, as well as today’s data giants (Google, Apple, Microsoft, SAP, IBM, etc.) will all enter this lucrative $3.8 trillion healthcare industry with new business models that dematerialize, demonetize and democratize today’s bureaucratic and inefficient system.

Biometric sensing (wearables) and AI will make each of us the CEOs of our own health. Large-scale genomic sequencing and machine learning will allow us to understand the root cause of cancer, heart disease and neurodegenerative disease and what to do about it. Robotic surgeons can carry out an autonomous surgical procedure perfectly (every time) for pennies on the dollar. Each of us will be able to regrow a heart, liver, lung or kidney when we need it, instead of waiting for the donor to die.

6. Augmented and Virtual Reality

Billions of dollars invested by Facebook (Oculus), Google (Magic Leap), Microsoft (Hololens), Sony, Qualcomm, HTC and others will lead to a new generation of displays and user interfaces.

The screen as we know it — on your phone, your computer and your TV — will disappear and be replaced by eyewear. Not the geeky Google Glass, but stylish equivalents to what the well-dressed fashionistas are wearing today. The result will be a massive disruption in a number of industries ranging from consumer retail, to real estate, education, travel, entertainment, and the fundamental ways we operate as humans.

7. Early Days of JARVIS

Artificial intelligence research will make strides in the next decade. If you think Siri is useful now, the next decade’s generation of Siri will be much more like JARVIS from Iron Man, with expanded capabilities to understand and answer. Companies like IBM Watson, DeepMind and Vicarious continue to hunker down and develop next-generation AI systems. In a decade, it will be normal for you to give your AI access to listen to all of your conversations, read your emails and scan your biometric data because the upside and convenience will be so immense.

8. Blockchain

If you haven’t heard of the blockchain, I highly recommend you read up on it. You might have heard of bitcoin, which is the decentralized (global), democratized, highly secure cryptocurrency based on the blockchain. But the real innovation is the blockchain itself, a protocol that allows for secure, direct (without a middleman), digital transfers of value and assets (think money, contracts, stocks, IP). Investors like Marc Andreesen have poured tens of millions into the development and believe this is as important of an opportunity as the creation of the Internet itself.

Bottom Line: We Live in the Most Exciting Time Ever

We are living toward incredible times where the only constant is change, and the rate of change is increasing.

http://singularityhub.com/2015/05/11/the-world-in-2025-8-predictions-for-the-next-10-years/