JANUARY 23, 2019 • Paul Dellaquila
With new technologies often come new experiences that can snowball into a larger cultural transformation and impact how we experience our everyday lives. But from an investor’s perspective, it can be difficult to predict which firms working in a new and disruptive technologies will emerge victorious. For example, when the mobile phone was first produced a number of companies came into the market but few could have predicted which company would emerge victorious. What people did know was that this technology was here to stay.
We see new technologies and trends that are transforming how we live and work, and the following five are already making waves and are potentially worthy of investor attention in 2019:
5G Transforming Mobile
A 5G mobile network will be the next major phase of mobile telecommunications standards beyond the current 4G LTE. All four major providers—Verizon, AT&T, T-Mobile, and Sprint—have promised to make 5G a reality this year. This technology will be the backbone of much of the future tech including autonomous vehicles, remote patient monitoring (telehealth) and smart cities. It will also take technology like augmented and virtual reality to the next level by allowing users to access them from a standard—and much more capable—mobile network. It is estimated that by 2035 the 5G value chain will result in $3.5 trillion in output and 22 million additional jobs.
Greater Adoption Of Augmented And Virtual Reality
Augmented and virtual reality make for fun games, but beyond entertainment it is becoming ever clearer that these technologies will soon change the way we work. The U.S military, for example, has already purchased Microsoft Hololens goggles to be used for combat missions as well as training. In retail, Walmart purchased 17,000 Oculus headsets to train associates and managers in three main areas: new technology, soft skills like empathy and customer service, and compliance. Elsewhere, Apple has continued to make a commitment to augmented and virtual reality with many augmented reality features built into the latest iPhone lineup.
The Predictive Power Of AI And Machine Learning
Artificial Intelligence and machine learning have been talked about for years, but 2019 is poised to be the year that businesses begin to adopt the technology in much larger numbers. The U.S Army is currently using machine learning to predict when combat vehicles need repair, and that same technology can be applied to vehicles in the civilian world. In addition, many Wall Street firms are hiring machine learning and AI experts to enhance their portfolio management and risk management capabilities.
Cyber Security Enhancing Your Business
2018 saw a steady wave of security breaches at major retailers, hotel chains and other industries. In a recent survey of risk managers, the Depository Trust and Clearing Corp. found the biggest risk to markets is the threat of a cybersecurity attack. AI and machine learning-powered approaches are poised to play an ever-expanding role in improving cybersecurity offerings, helping companies stay one step ahead of bad actors. Additionally, quantum computing approaches—which are in the inchoate stage of development—could also have a major impact on cryptography and security in the near future.
Automation Changing The Way We Think And Work
Whether it is having Alexa order you a pizza or having a robot pack your item for shipping so that a drone can deliver it to someone’s doorstep, the world continues to move towards a place where humans are going to rely more heavily on robots, often powered by AI, to enhance our daily lives. As more job functions become automated, it will necessitate the creation and adoption of a new wave of hardware to go along with the AI “under the hood.” The very nature of work is likely to change for many, requiring new skills and approaches to the workplace that will themselves have a disruptive effect for many.
While it is impossible to predict the future of these technologies, one thing is certain: change will continue unabated across numerous segments of the global economy. Investors would be well served to research and understand these new disruptive approaches and the opportunities they may present.
Paul Dellaquila is the global head of ETFs with Defiance ETFs LLC.
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