INNOVATION
A Changing World

INVESTMENT CASE
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INNOVATION

 

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Innovation is becoming core in many industries, allowing companies not only to reduce costs thanks to automation (artificial intelligence, robotics), but also to come up with new products, enjoy higher pricing power (smart products) and to develop new business models (sharing economy)
 

This digital evolution has the potential to reshape markets faster than perhaps any force in history, with the spotlight being currently on the Internet of Things, virtual / augmented reality, artificial intelligence, robotics, medical devices
 

The Innovation theme gathers our top ideas among innovative technologies that are impacting current businesses and transforming the economy
 

The investment universe is naturally composed of Tech, Biotech and MedTech players, it can also include more traditional companies whose business model shifts thanks to innovation

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WHAT IS IT ABOUT?
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THE FINAL STAGE OF
TECHNOLOGY EVOLUTION

 

We have reached the 3rd step of technological evolution ->

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TECHNOLOGY ADOPTION HAS
ACCELERATED OVER THE YEARS

 

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The rate of technology adoption has materially accelerated over the years as costs have been going down and as technology has become more user (and developer) friendly
Consumers now have an open mind when it comes to technology, with many of them being even eager to try new technologies

 

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Source: Michael Felton, The New York Times

 

 

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INNOVATION IS BECOMING CORE IN ALL
INDUSTRIES AND FOR GOVERNMENTS

 

Innovation is not exclusive to consumer electronics and healthcare industries anymore

In traditional industries, innovation emerges as a way to confront rising competition from. Low-cost countries and products and to drive growth

The cloud and IoT are major breakthroughs

 

 

 

 

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TECHNOLOGY IS BECOMING UBIQUITOUS

 

The self-lacing technology from the 1989 “Back To The Future 2” movie is now real. Smart apparel is on its way. As are smart home appliances. Consumer products companies will get a massive revenue boost thanks to the higher selling prices of smart products

 

 

 

WHAT IS HAPPENING NOW?
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WHAT’S HOT RIGHT NOW?
THE INTERNET OF THINGS

 

 

 

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The IoT will soon be at the crossroads of basically everything and will spark the advent of a smart, connected world allowing the remote monitoring of devices feeding Big Data and AI systems. In return, AI systems will make objects smarter

Starting as a simple tracking solution, the IoT now allows to extract and record a variety of data (speed, temperature, pressure, humidity) from an unlimited number of items: from consumer and industrial products to basic materials, food and drugs

 

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The IoT will soon power smart homes, with digital assistants (Alexa) making the link between humans and machines

Smart factories will be another major field of application

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Connecting every single object to the Internet. 80bn objects will be connected to the internet in 2020 vs 15bn today (Source: Idate Consulting)

 

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WHAT’S HOT RIGHT NOW?
AUGMENTED REALITY

 

Both Facebook and Apple are reportedly working on AR glasses and cameras
 

The upcoming iPhone 8 is believed to be Apple’s first foray in AR, with a camera expected to allow depth sensing, picture manipulation and virtual effects on images
 

Wide number of AR applications ranging from gaming to driving or shopping
 

AR needs tech content, i.e. semiconductors for improved processing power, connectivity, power management and higher resolution displays and media content (video games, rich maps)

 

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WHAT’S HOT RIGHT NOW?
SMART CARS

 

The auto industry is becoming the next battleground of tech giants, as illustrated by the recent acquisition of Mobileye by Intel
 

The autonomous driving market is expected to reach $50-100bn in the medium term:
 

  • assuming tens of millions of cars come out of the factories each year equipped with such technologies
  • and an ASP around $1,000

DEFINED LEVELS
OF AUTOMATION

 

 

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Many technologies are vying for the car of the future:
 

  • from the Intel Xeon CPU - Mobileye vision sensors combo
  • to Google’s LIDAR sensors and NXP’s BlueBox
  • and to graphics cards for the computing power

 

PERSPECTIVES
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INNOVATION DRIVES LONG-TERM
ECONOMIC GROWTH

 

There are 3 main types of innovations:

  • Process (cost saving opportunity, e.g. robots)
  • Product (revenue opportunity, e.g. iPhone)
  • Business model (e.g. sharing economy)

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R&D INVESTMENTS ARE
STRONGER THAN EVER

 

In recent years, R&D spending has been growing at a 5% pace, well above global GDP growth around 3% suggesting that many innovative products are about to hit the market soon

Unsurprisingly, artificial intelligence, robotics, data analysis and new medical technologies rank high in terms of R&D priorities

R&D Spending CHARTSource: Bloomberg data, CapitalQdata, Strategy & Analysts

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A HUGE POTENTIAL AHEAD OF US 

 

McKinsey Global Institute estimates the positive economic impact of technologies on global GDP ($80 trillion) in a range of 17%-41% by 2025

Reducing by 50% the number of years for major economies to double in size by 2035

 

 

Artificial Intelligence could double economic growth over the next 20 years in 12 developed economies (Accenture)

 

PLAYERS
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NEW PLAYERS KEEP POPPING UP

 

As the cost and complexity of technology keep going down, new players are coming from out of nowhere in many industries contributing to the global innovation effort as they come up with original ideas, products and business models… and putting continued pressure on the cost and complexity of technology.

After the GAFA (Google, Apple, Facebook and Amazon), the newcomers to the Tech world are the NATU (Netflix, Airbnb, Tesla and Uber).

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HOW TO PLAY INNOVATION?

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