Technological breakthrough

Technological breakthrough

ETFs
iShares

Summary:  New technologies lie at the heart of resolving or accelerating the five megatrends. Breakthrough innovation is necessary to address large-scale challenges (e.g. ageing populations, transition to low-carbon economies), while new solutions are also targeting relatively minor problems (e.g. payments, streaming). This backdrop has created a fertile ground for disruptive innovation and thematic investing.


Capital at risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

Breakthrough innovations have become more powerful in recent years thanks to globalisation and the ubiquity of technology. Together, they have lowered entry barriers for new competitors and accelerated the adoption of new technologies around the world, thereby unleashing a wave of disruptive threats across industries and economies.

There are three key areas to consider when assessing investment opportunities for this space; areas of the economy that provide the right conditions for breakthrough technologies, innovative companies with superior solutions that can boost long term growth, and assessing the lifecycle of new technologies to avoid hype by understanding the bottlenecks for new tech adoption.

Megatrend in three stats

  1. 328.77 million terabytes of data are created every day.1
  2. 50 million users reached in: 62 years for cars, 50 years for landlines, 22 years for TV, 14 years for computers, 12 years for mobile phones and 7 years for the internet.2
  3. 6bn expected number of social media users worldwide by 20273

Investing in the trend

Megatrends are broad drivers of global change, identifying more focused themes which tap into one or more megatrends allows you to invest in these opportunities. For technological breakthrough you could use a broad theme such as digitalisation, providing access to a wide range of companies involved in digitalising the global economy. Alternatively, a more targeted theme may appeal to you, such as digital entertainment and education - providing access to companies delivering streaming, gaming and learning services, or the metaverse, bringing you companies working to change the future of how we interact with each other and the world around us.

References

  1. Source: Exploding Topics, as of April 2023
  2. Source: Visual Capitalist, as of June 2018
  3. Source: Statista, as of August 2023

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