"The economic titans of the next 30 years, across all sectors, will be those that adapt quickly to increased AI potential, more intelligent and streamlined software, and the ability to utilise vast amounts of data."

The future is a polarising concept. Some tech evangelists prophesise AI-enabled utopias, while other commentators look worriedly at a future of mass unemployment and inequality. Whatever the case, change is certain. 30 years ago, tech and data analytics companies were by no means the principal economic juggernauts that they are now;[1] yet with the arrival of big tech, business landscape is shifting at a considerable rate. The economic titans of the next 30 years, across all sectors, will be those that adapt quickly to increased AI potential, more intelligent and streamlined software, and the ability to utilise vast amounts of data.

Perhaps the sector nearest to mass change is the transport industry. Self-driving cars are beginning to arrive in some cities across the globe, with transport services such as Uber and Waymo leading the charge. The self-driving movement took a hit back in March last year, when an Uber auto-piloted car (albeit with solo safety driver inside) killed a woman in Arizona, yet it has been picking up steam with renewed vigour over the past few months.[2] As of last December, Uber cars have been driving on public roads in Pittsburgh after receiving authorisation from Pennsylvania’s Department of Transportation.[3] The move to driverless cars is critical for the company that lost $865m in Q4 2018, its main expenditure being drivers.[4] Alongside Uber, Alphabet’s subsidiary, Waymo, recently launched their own driverless taxi service, Waymo One, in Phoenix, Arizona.[5] Meanwhile, Tesla’s Elon Musk told Recode that he was confident Tesla would has announced that self-driving robo-taxis will be in operation in 2020. With Uber’s IPO set to come this year, the initial share value of the company will indicate how confident investors are in the potential of driverless in the transport sector.

Alongside transport, the financial sector is currently undergoing a technological revolution with the rise of FinTech and peer-to-peer lending platforms. With the evolution of companies like Funding Circle, which has already managed the transfer of over £5bn since its inception, the ability for smaller start-ups to secure necessary capital has become significantly easier. A recent study by PWC has highlighted that 82% of incumbents in their 1308-individual survey expect an increase in FinTech partnerships within the next three to five years.[6] Meanwhile, online, app-centric bank alternatives, such as Monzo, are becoming increasingly popular with Millennials, streamlining many of the processes banks perform.[7] Traditional banking services will need to update to stay competitive.

"Babylon Health, a London-based start-up, is developing an AI that they believe will eliminate the need for some 85% of consultations."

Only slightly further on the horizon is the healthcare sector. The Economist writes that “longevity and the advance of new technologies and discoveries – as well as innovative combinations of existing ones – are among the many factors propelling patient empowerment, which is fundamentally changing how we prevent, diagnose and cure diseases.”[8] Hospitals will likely be streamlined, with AI being used increasingly for diagnostics. Already, Babylon Health, a London-based start-up, is developing an AI that they believe will eliminate the need for some 85% of consultations.[9] Fields within healthcare that rely on repeated observations and recognising patterns, such as radiology and pathology (which alone make up a quarter of a typical health budget), are likely to be conducted through intelligent machines within the near future.[10]

At the same time, human characteristics themselves may undergo serious changes over the next 30 years. Just last year, Chinese geneticist He Jiankui earned international attention, and backlash, for supposedly editing the genomes of unborn twin girls.[11] While it is still inconclusive if his gene-editing was a success, his experiment has opened a series of debates surrounding ethics and gene-manipulation – it is likely that the rulings concerning his gene-editing will shape the immediate future of genetic research.[12] Whatever the outcome, selecting or engineering the genes of unborn babies is no longer the fantasy of science fiction. The Economist’s survey of some 400 global leaders in healthcare revealed that some 60% of incumbents think “designer babies” will be a reality within the next 25 years.[13]

 

"Neil deGrasse Tyson, speaking to the Guardian, highlights the economic potential for space’s resources, predicting that future trillions will be made in the harvesting of those resources."

Another element of science fiction that might be common-place within the next 30 years is space exploration. Neil deGrasse Tyson, speaking to the Guardian, highlights the economic potential for space’s resources, predicting that future trillions will be made in the harvesting of those resources.[14] Already, global leaders are investing in space technology, most notably the United States’ “Space Force,” announced last year, that is set to be unveiled in 2020.[15] And it’s not just countries, but companies and individuals who will compete in the new space race. Elon Musk’s SpaceX is already proving how private companies can be competitive. The company’s recent Falcon Heavy rocket can lift “twice the payload of the next closest operational vehicle, the Delta IV Heavy [developed by the United Launch Alliance], at one-third the cost.”[16]

Many futurists abide by what is known as Amara’s Law: the fact that we overestimate technological advancements in the short-term but underestimate them in the long-term.[17] While the utopias are perhaps a whimsical fancy, AI and mass data are changing the way we do business across the globe. Today’s big economic class will need to invest heavily in new technological research in order to retain their pole positions, while disruptors will no doubt continue to carve out significant niches for themselves, streamlining out-of-date systems and revolutionising the everyday lives of consumers.

 

This article is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. If something has piqued your interest and you would like to find out more or discuss what investments might be suitable for you, please contact one of our Investment Managers on 020 7337 0777.

[1] CNBC, [2] NYTimes, [3] The Verge, [4] Quartz, [5] TechCrunch, [6] PWC, [7] The Fintech Times, [8] The Economist, [9] The Economist, [10] The Economist, [11] NYTimes, [12] Nature, [13] The Economist, [14] The Guardian, [15] The Guardian, [16] SpaceX, [17] The Guardian