As technology develops it can have a financial implication both in terms of opportunities in certain sectors and the removal of opportunities in the ones they’re replacing. It therefore pays to keep a close eye on the emerging technologies that could potentially impact your business; for better or worse. We take a look at some of the trends you should be paying attention to in 2016 and beyond.
Smartwatch-controlled car image from Shutterstock
The emerging tech of 2016 is poised to disrupt the financial market in the near future. Sometimes it's a general industry-wide trend; for example, the threat to demand for oil caused by the emergence of alternative energy sources such as fracking and electric and hybrid power for cars can cause two things:
- Opportunities for growth investments in companies involved in emerging technologies.
- A decline in investment opportunities in the ‘old’ technology companies as their stock value declines.
Here are some emerging technologes and the implications for financial markets.
Mobile web use on smartphones, tablets and wearable tech is swiftly becoming widespread with over 50% of mobile users accessing the internet from their devices.
That translates to money too. A study from PayPal and IPSOS suggests that 42 per cent of Aussies shop online using a smartphone. PayPal says one in three of transactions involving its six million-plus users in Australia takes place on a mobile device.
The impact on the financial markets cannot be overstated; as increased numbers join the ‘connected world’ it widens the scope for more and more people to be productive and generate revenue.
Mobile apps make it easier for people to do their jobs more effectively and for services to be delivered more efficiently, so companies and organisations that embrace this could see their bottom lines and market values increase.
Automation of knowledge
The way computers can ‘learn’ things means many tasks can be automated — or part automated. Analytics tools are evolving that can remove the time and effort it takes qualified people to do the same thing.
For example, analysing financial markets for activities like CFD trading can be more efficient and accurate utilising newer analytics.
Automation clearly has a financial impact. Not only is the technology powering this sought after, but it will change the nature of the workforce too. One study estimates that about half of all jobs could be automated in the next 10 to 20 years. Industries that adapt best to this fundamental change will be in a strong position to cash in.
Internet of Things
The general connecting up of devices so they can communicate with each other is increasingly widespread in use. An example is in ‘smart heating’ apps enabling householders to remotely control their heating system.
The Internet of Things heavily features the use of sensors and actuators to enable devices to be connected, and it’s likely that companies involved in this particular technology will see growth. This includes giants like Sony - already a popular supplier of sensor technology - and smaller companies alike.
This demand should increase as the ‘driverless car’ concept gain traction in the coming years with companies involved in this tech may see their stock value strengthen.
Intel reckons that the Internet of Things amounted to about two billion objects in 2006 and will shoot up to a projected 200 billion by 2020, the equivalent of 26 smart devices for every human being on earth.
The costs and time taken to sequence a human genome has tumbled drastically to the point where it takes a mere few hours now. This, coupled with forthcoming technology, such as the ability to customise organisms by ‘re-writing’ their DNA, could have profound effects on medicine, agriculture, drug development and maybe even biofuel production.
The DNA sequencing market is well on its way to exceeding its predicted value of $20 billion.
Stock in science-based organisations could be a good option as they see a sharp rise as gene-related research bears fruit.
The self-driving car is in many ways already upon us, with many carrying out automated functions including sensing when a collision is likely and braking accordingly.
As discussed in the Internet of Things above, companies involved with in demand technology such as sensors could be a financial growth sector.
Also, companies new to the industry and majoring in new technologies such as Google and Apple with their driverless cars may be attractive investments.
The technology could be truly transformative and, if so, that will translate to big money too. That’s why US President pledged to spend $4 billion on this sector before leaving the White House.
Estimates vary, but it is thought that we will see at least some form of driverless cars by the end of the decade with a view to them becoming commonplace by 2030. By then, the market is likely to be worth upwards of $100 billion – the sort of growth that investors are unlikely to want to ignore.
Other future technologies
Some technologies to watch in the years to come include; advanced water purification, next-generation nuclear fission, carbon sequestration - to reduce carbon dioxide concentration in the atmosphere - and more.