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New momentum and investment opportunities in technology
While the use of digitally enabled tools at home and work has grown since the start of the pandemic, the technologies driving some of the biggest changes in society and industry are hardly new.
Technology is the overarching term for the digital innovations that are reshaping entire sectors and providing solutions in support of the UN Sustainable Development Goals (SDGs). Our Technology Supertrend delves into some of the most interesting areas for long-term thematic investing, including artificial intelligence (AI), Industry 4.0 and Healthtech – which have all experienced a recent boost.
3 technology trends to watch:
AI, Industry 4.0 and Healthtech
This is a Financial Promotion
The impact of AI or machine learning continues to spread across sectors. AI proved to be instrumental in both identifying COVID-19 treatments and delivering vaccines at record speed. Online education and edutainment have also benefited. Other industries have ramped up their AI capabilities as well.
According to IDC (International Data Corporation), worldwide AI market revenues – driven largely by software – are expected to surpass USD 500 bn by 2024.1 The US, Europe and China have been competing in the AI space, with China leading in the number of businesses focused on AI-driven services and applications, such as autonomous driving and natural language-based education apps.
In the past year and a half, the 4th Industrial Revolution has also taken a clear step forward. From the deployment of collaborative robots to quantum computing, industrial automation technologies are fast replacing traditional manufacturing practices. In the aerospace industry, high-powered quantum computer models have helped optimize the manufacturing of individual components within the overall system. Further partnerships between industrial and tech firms should be a boost for this disruptive technology.
Digital twin technology is also on the up, used for example in building information modeling (BIM) to construct greener, more efficient structures. The digital twin concept is defined by General Electric as software representations of assets and processes that are used to understand, predict and optimize performance in order to achieve improved business outcomes. More broadly, a Gartner survey revealed that 18% of the companies implementing the Internet of things (IoT) have already adopted digital twins, with an additional 70% planning to do so by Q4 2021.2
It is no surprise that the pandemic propelled innovation in healthtech. According to McKinsey, sector revenues are projected to jump to nearly USD 600 bn in 2024 (from USD 350 bn in 2019).3 One well-known driver has been the successful deployment of mRNA vaccine technology. Beyond COVID-19, this development bodes well for regenerative medicine and personalized cancer vaccines.
Other innovations that could change health outcomes for the better include precision medicine and liquid biopsies. Telemedicine should continue to flourish as 5G mobile technology and AI chat bots facilitate connectivity. At this point, it looks like tech firms will play a dominant role in the healthcare of the future.
Opportunities to explore:
Providers of AI solutions and services for use in healthcare and education
Companies focused on industrial automation solutions and the manufacturing of collaborative robots as well as providers of quantum technologies
Healthcare companies using digital technology and big data analytics to improve execution in diagnostics, therapeutics, sequencing, mRNA technology, care delivery and medical devices
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1 “IDC Forecasts Improved Growth for Global AI Market in 2021” (IDC), February 2021, Credit Suisse
2 “Tech Monitor” (Gartner), Credit Suisse
3 “Healthtech in the fast lane: What is fueling investor excitement” (McKinsey & Company), December 2020, Credit Suisse
Source: Credit Suisse, unless otherwise noted.