Supertrends: Technology at the Service of Humans
Faster than ever speed of technology development offers indefinite range of investment opportunities.
In recent years, technology has increasingly been regarded as a threat, with cheap robots, algorithms and programs seen as eliminating jobs and making human talent redundant. Yet, it is essential to remember that positive aspects of technology outweigh the negative ones and that technology and innovation also help make workplaces safer, increase productivity and provide better products and services for people.
In the coming years, the big winners are likely to be so-called digitizers that offer sales growth and rising operating margins owing to economies of scale and efficiency.
The Big Players
Internet platform companies in particular should continue to be the major beneficiaries. They constantly innovate to cater to the structural shift toward more enriching online experiences. Furthermore, web advertising agencies, companies that create new ecosystems based on the Internet of Things (IoT) and cloud computing should gain in the long term.
Digitalization also has negative sides, with data theft a prominent risk. In this respect, we think that cybersecurity will continue to be among the most resilient areas of IT spending. Also, the exponentially growing flood of data that is automatically stored might lead to increasing costs. This could be a growing area of new business for companies that help to qualify, manage and clean data storage.
It Goes Beyond IT Sectors
Digitalization provides equally compelling opportunities in non-IT sectors. The need to innovate and increase operational efficiency is going to drive long-term trends such as big data (which can be used for example in medical research), IoT (which will have its applications in house appliance) and virtual world. Technologies like virtual reality (VR) / augmented reality (AR), IoT and robotics offer tremendous opportunities in this regard.
A very promising area for applying VR and AR is education. Thanks to the latest technologies, it can become a more enriching and interactive experience. The primary idea for virtual worlds is that they enable immersive learning, which will assure higher attention and active involvement from students. For example, students can virtually be among native Italians while learning the language or can tour space while studying astronomy. The studies show that this approach can speed up the process of learning tenfold comparing to the traditional methods.
However, the power to innovate is highly dependent on incremental investments that companies make to become digital. Any macroeconomic weakness could impact IT spending and investments in innovation, which, in turn, could dampen growth. Therefore, it is essential to follow a disciplined lifecycle management of investments in digitizers and preferably use managed investment products.