Posted on 06/19/2017 12:28:42 AM PDT by 2ndDivisionVet
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.”
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.”
Thanks while im not sleeping.
Opportunities for wealth and improving the human condition will abound given the ongoing revolution in technology. Yet will the average Joe be able to participate in this wondrous future as the nature of employment and income change in America? Then again, maybe the Luddite in me is showing and that the 1950’s social order that many of us cling to is already passing into the dustbin of history.
Far out
This is a fast-growing bubble. Will we ever learn that bubbles burst?
TC
After reading the list, looks like “Mark of the Beast” technology has a terrific stock future. They will combine the “Smart Payment” tech with the genetic stuff and create a “Wearable Transaction” product. He will have the option of wearing it either on your hand for forehead.
Skynet.
Colossus.
4. CRISPR Starts With Genetic Therapy, But It Doesn't End There
Unless you are talking about genetically engineering embryos, CRISPR is actually way overhyped. Our bodies have evolved to very efficiently detect and destroy foreign DNA--and use of CRISPR involves introducing foreign DNA into the body. There are already many gene delivery methods, each of which was supposed to be the big breakthrough, and none of them have, for the reason that I just mentioned. There are other biological reasons, as well.
must read
Mark
All of this is great, but what are people going to do for jobs in the future? I’m sure these advances will “create all sorts of opportunities,” but I’m not sure that the people being replaced are the ones who will be qualified to leverage the new opportunities.
Thanks. very interesting.
The crypto currency thing is certainly a high potential. But also a high risk. Companies like BitCoin can vanish totally almost instantly with zero recoverability.
Bitcoin and crytocurrencies are in direct opposition to “Mark of the Beast”.
They keep transactions anonymous.
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Paper currency is just as likely to vanish.
Nothing is safe.
A currency being separated from government control has a better chance of being valuable if there is a global collapse.
I believe Bitcoin, Etherium etc. have a really good chance of being the next standard. They don’t depend on government employees creating dollars for their own protection. We’ll see how it plays out but a small investment has the possibility of being YUGE.
I hold none, but agree on that approach.
Note: this topic is from 6/19/2017. Thanks 2ndDivisionVet.
Such lists are always amusing, at least. R & D for most big ideas is only available to big-cap companies, so privately-held startups containing the real talent can only go just so far, then get bought out, rather than turning up as an IPO. And getting hold of an IPO at the starting line is, to say the least, difficult. Roku has been around for over a decade by now, just had its IPO, and as happens with so many, the first day flipped price spike didn't last, and won't be seen again for years, if ever.
Amazon, AMD, Apple, Google, Microsoft, Nvidia, and probably others (including Chinese and possibly Indian companies; in at least a couple of these categories, Israeli companies) are definitely involved in numbers 1, 2, 5, and 6, and probably 7.
3D printing will be in many a local shop, pretty much everywhere in the US, in a year, and will be the lower-end stuff found in most homes five years from now. SpaceX already uses high-end 3D printing to build engines and components, and I'd be very surprised if a huge, relatively fast 3D printer won't soon exist to extrude custom-length one-piece rocket fuselages, if not at SpaceX, then somewhere.
Number 7 is one where political difficulties will arise internationally, and mobile transactions (#5) are much more important. Mobile transactions will be in most hands in developed countries (if they aren't, it's my fault, old flip-phone user; hey, I grew up watching Star Trek) and in a good many hands in developing countries like India, and exchange rates are all handled by some unseen distant computer. The US, EU, China, and India make up pretty close to half the Earth's human population.
Putting Johnny Cabs all over the place might be convenient (or might not, considering they'll have to be expensively licensed in at least some polities), but they'll also put an end to a bunch of part-time and full-time jobs. And those cabbies, they do more than just drive you around when they get good and ready, they also keep the cabs spotless.
Okay, bad example.
Numbers 2, 3, and 5, at least, will displace a lot of employees, who will then be *liberated* from having to work, yeah, right, and there will be a political imperative to *create jobs* that can't be done with automation (at least, not now), such as drug counselling. That'll be just in time, because both illicit drugs (I understand that a lot of meth cooking is done in Mexico now; it's always been more of an outdoor and rural activity; heroin is made in a labor-intensive, multi-step process; powder cocaine and crack lie between the two in terms of cost and stimulation) and prescription painkillers and the like will probably boom boom boom.
Med stocks remain highly speculative though, almost as bad a crapshoot as airline stocks. :^)
- Deep Learning Could Be Worth 35 Amazons
- Fleets of Autonomous Taxis to Overtake Automakers
- 3D Printing Goes Big With Finished Products at Scale
- CRISPR Starts With Genetic Therapy, But It Doesn't End There
- Mobile Transactions Could Grow 15x by 2020
- Robotics and Automation to Liberate $12 Trillion by 2035
- Blockchain and Cryptoassets: Speculatively Spectacular
tech ping
Thanks for emerging tech information
BFL
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