HSBC’s highly rated equity strategy team dusted off its crystal ball in a recent report to work out what might be the next big thing in technology. In particular it focused on ‘disruptive technologies’: defined as “any innovation that is liable to revolutionise an industry and challenge the dominance of its incumbents”, with a major focus on the convergence of “telecoms speed, data capacity and network effects”.
The analysts warn that “the winners [in a disruptive technology] take many years to emerge and… it is well-nigh impossible to identify them early… Conversely, the losers tend to be both more obvious, and more obvious at an early stage”. Quite.
Spotting the winners in the technology sector early on is incredibly difficult. But at least if you know where to look, you have a better chance of getting on board a trend early. The report pinpoints a long list of potentially disruptive technologies. I’ve pulled out some highlights here, many of which are developments that the big tech companies mentioned above are benefiting from, or are well-placed to capitalise on.
The internet of things
The “always-connected internet of things” will enable sensors and new interfaces to digitise the analogue world (ie, everyday devices will be equipped with sensors that enable them to share data with one another).
Cloud/big data/analytics
“Cloud computing is an all-encompassing concept used to describe a technology shift to centralised computing as a service… Beyond services, cloud has implications for hardware, software, infrastructure, storage, security, and ‘big data’ analytics.” You can read a lot more about ‘big data’ specifically in this week’s cover story.
Mobile payment and near-field communication
This is about the rising use of mobile phones in making and taking payments. “A dramatic increase in the use of mobile devices for financial transactions is creating a complex new ecosystem.”
Insurance telematics
Telematics is the use of ‘black boxes’ in cars to track individual drivers’ behaviour. This “should lead to more accurate pricing as insurers rate individual risks based on detailed driving habits, and could result in significant premium changes for mis-priced drivers”.
Flexible screens
“We expect competition to start shortly with the release of smartphones with curved screens. Apple, Nokia and HTC may find this new technology difficult to commercialise quickly.”
Biosimilars
In the pharmaceutical sector, these will open the way to “more affordable ‘generic’ versions of highly effective biologics for severe diseases”.
Stem cells
“Stem cells offer curative treatment for severe diseases that could previously only be treated supportively. In Korea, heart attack, degenerative cartilage and Crohn’s disease patients [already] have access to regulator-approved stem cell treatments.”
Fully automated driving
“By 2025, driverless cars will be in widespread operation, which could revolutionise individual mobility. This will enable people to drive until an old age; fuel efficiency will increase; and accidents will be reduced to close to zero.”
Small mobile telecoms cells: This is all about handling the rapid growth in telecoms traffic. “Diminishing network efficiency gains steer focus towards small cells as a solution to the global mobile data ‘capacity crunch’.”