The Future of Tech Investments

From the invention of the PC in the 1990s, technology has quickly made waves with the introduction of the Internet, followed by GPS, mobile phones, smart technologies and most recently artificial intelligence.From one moment to another, technology evolved into a surreal parody of a children’s cartoon with flying cars set in the future. From the ‘simpler times’ of automated machines, we have leaped into the age of virtual assistants, digital clouds and genetic fortune telling.

The world is in the midst of the 4th industrial revolution, one that is radically changing our societies and way of life. Already, the millennial workforce has an entirely different approach to getting work done than their parents. Automation, collaboration, and knowledge sharing has become imperative for this smartphone wielding generation that demands evermore powerful and personalised experiences.

Riding this wave of change, tech investors who have stayed abreast of the latest disruptive innovations and taken a risk have struck gold. A few such notable achievements include, Ben Delo of BitMex becoming the youngest bitcoin billionaire in the world through the cryptocurrency trading platform, the acquisition of WhatsApp by Facebook’s Mark Zuckerberg, the universal takeover of Netflix that put brands like Blockbuster out of business, the demise of brands like Nokia and Blackberry due to lack of innovation, the online shopping giant Amazon developing a trillion dollar concept that put brands like ToysRUs out of business, Steve Jobs and his Apple empire revolutionizing consumer electronics and of course, the most recent headliners by Elon Musk launching autonomous Tesla cars, the Hyperloop as well as many groundbreaking innovations that are set to change the way we live.

The reality is almost all sectors of the modern economy rely upon the technology sector to improve quality, productivity, and profitability. However, certain fields of technology have drawn greater attention of investors in the recent years due to their potentially disruptive nature.

3D PRINTING

We’ve all encountered the fascinating bi-products of 3D plastic printing over the last few years. What began as a futuristic and fun tool for artists soon catapulted into a technology that brought ease to industrial design and prototyping. And today, advances in this technology means that instant metal fabrication is quickly becoming a reality. 3D metal printing gives manufacturers the ability to produce customised and complex shapes at limited quantities, for a fraction of the cost of the traditional mass-produced metal parts.

According to International Data Corporation, the 3D printing market is projected to reach $35.4 billion in 2020.In the UAE, the Dubai Municipality has launched a ‘Dubai 3D printing’ regulation stating that by 2025, every new building will be 25% 3D printed. With applications ranging from the healthcare sector to manufacturing and aerospace, it is becoming very clear that the 3D printing industry will be at the forefront of high-performance investments in the near future.

ARTIFICIAL INTELLIGENCE

Artificial intelligence, which lets machines perform complex tasks traditionally done by humans, is definitely the next global frontier. In a recent interview with CNN, Mohammed Al Gergawi, UAE Minister of Cabinet Affairs and the Future said, “If we look at the next 12 years, Artificial Intelligence will add $12 trillion to the global GDP. That’s much more than oil will add to any economy”. This comment was made as part of Al Gergawi’s signing of a cooperation agreement with the World Economic Forum, which establishes Dubai as a center for the Fourth Industrial Revolution, beginning with the training of 500 Emiratis in Artificial Intelligence technologies. On the other end of the world, the United States Department of Defense (DARPA) recently announced a $2 billion investment into AI, as part of its 60th anniversary celebration. 

While until recently AI was mainly the plaything of big tech companies like Amazon, Baidu, Google, and Microsoft, the arrival of cloud-based AI is making this technology cheaper and easier to use. Sectors such as medicine, manufacturing and energy could also be transformed if they were able to implement the technology more fully, with a huge boost to economic productivity. Which is why Amazon and Google are also setting up AI consultancy services.

CLOUD COMPUTING

Cloud computing uses remote servers to store, deliver as well as manage data and applications over the Internet. It eliminates the need for local servers and often the cumbersome installation involving an IT department. While there are still some concerns over security, cloud computing is definitely here to stay. It allows businesses to save big on hardware and infrastructure costs while allowing easy access to information from anywhere with an internet connection – both key factors for fast moving industries.

According to a survey done by growth equity and venture capital firm North Bridge and research firm Wikibon, public cloud spending is expected to soar from $75 billion in 2015 to $522 billion by 2026.Those are definitely forecasts worth investing in, especially considering the shift that companies across the world are making towards storing their data on a cloud and drastically reducing costs of expensive servers in-house. From cloud email and VoIP solutions to cloud data storage and apps, the versatility of this technology is unprecedented.

ROBOTICS

Robotics is a branch of technology which deals with programmable machines that are usually able to carry out a series of actions autonomously, or semi-autonomously. Robotics have vast applications in the medical devices, automotive, industrial, agriculture, and manufacturing industries. Although robots have been around for a long time, we are now seeing smarter automation systems at very low prices. This dynamic is creating a larger market opportunity than ever before, which could explain the rising interest in robotics equity investments.

While robotics for automation has existed for decades, adding IoT (Internet of Things) into the mix has changed the game for the industry. IoT is basically the connectivity between devices. Every piece of technology should be able to talk to every other piece of technology to produce some sort of decentralised super-system. We can already see the beginning of this technology when your mobile phone downloads your emails or when your GPS wrist watch tracks your morning run and then uploads it to your computer when you enter a WiFi network.

So how does one take a decision on investments when the technology industry is making such gigantic leaps into the future? The great economists, innovators and businessmen of our time believe that there will be much more to see in terms of technological innovation in the coming years. Cutting edge technology is the foundation for many companies to achieve their success matrix. While this does not come as a surprise, investing in the technology sector still remains an intimidating venture for many. This is mainly due to the fact that it is hard to keep up with the hurtling evolution of technology, which is already a complicated beastto begin with. Technology changes quickly, and one-time leaders can quickly fall behind, or even go out of business.

Globally, few investors have successfully managed stocks, mutual funds or even invested through venture capitalists. Notably, one of the most prudent ways to invest in new technology is through Exchange-Traded Funds (ETFs).

Manoj Krishnan, Chief Financial Advisor at Continental says, “New Tech ETFs are the best your money can buy. Identifying the best scalable industry disrupter is a task in itself and involves a lot of risks. Access to the best fund managers at the cheapest cost is possibly the selling point for our clients.”

As indexed investment, ETFs on average perform better than actively-managed mutual funds. They offer much lower expense ratios and higher option and short-selling opportunities. Compared to any other form of investment ETFs also offer more trading flexibility and transparency. Some of the high-performing ETFs include: 

ARKW Ark Web – Investments in innovative internet technologies including cloud computing, big data, digital media, e-commerce, bitcoin and blockchain technologies, and the Internet of Things (IoT).

SPDR State Street Global Advisors – Investments in technology companies and technology-related companies, including Electronic Media companies.

HACK - A portfolio of companies providing cyber security solutions that include hardware, software and services.

FINX - Giving investors access to high growth potential through companies that are applying technological innovations to disrupt and improve delivery of financial services.

ROBO - the first robotics and automation ETF to market, providing investors access to rapidly evolving robotics, automation and artificial intelligence (AI) companies.

SKYY – Offering investment opportunities in the leading companies in the cloud computing industry.

We are living in the greatest age of technology that can potentially take the world’s economy to the next level and transform our way of living. Investment at the right time in the right technology can be an absolute game-changer. Investing in new technology that could shape the future can be made profitable with an open mind, a penchant for tech and the right team of experts to get you there.