02Rethink Innovation Investments
We don’t use crystal balls to predict the future
- but data and brains
Investing in fast forward technology has been limited to relying on the obvious tech companies so far. However, this strategy is not only rather expensive, but also short-sighted. Our approach is different. We have mastered the art of screening for future viability: The core of our services is our investment methodology. Let’s explain why our philosophy is as pragmatic as it gets when it comes to identifying the impact of innovation and why true value creation is our main indicator.
Our philosophy: Applied innovation in a set of selected tech sectors has a positive impact on future earnings, and with that - on performance. We aim to detect those companies with innovative processes, products and services in place, as this is more likely to lead to exponential growth in the future.
Our funnel is based on data analysis and expert insights to identify the 3.000 companies out of almost 50.000 that have already implemented pioneering technologies. We call it the Singularity Universe: a set of listed companies across all countries and industries, contributing to and benefitting from exponential innovation in 12 Singularity Sectors as identified by our Expert Advisory Board.
Our approach is holistic and mid-to long-term-oriented.
It takes into account that true growth is exponential and rooted in early adopted transformation processes. We look for actual value creation. Once a new tech hype surfaces, it comes with two variables: Firstly, it’s uncertain whether the technology makes the long-term breakthrough and secondly, if so, at which point in time existing companies implement it as part of their growth strategy and at which point in time this results in revenue. That’s exactly what we look at: the moment when a technology’s integration into an existing business leads to exponential innovation. As a result, we also identify those established companies that have incorporated new technologies and proven marketability allowing for technology-focused investment approach without needing to invest in overpriced new tech companies or technologies themselves.
Selected Singularity Sectors
3D printing, also known as additive manufacturing, is the process of printing, layer by layer, any three-dimensional object based on a digital file. In a 3D printer, one or more print heads extrudes a small amount of materials in precise locations to build objects point by point from the bottom up.
Today we can 3D print in full color and in over 250 different materials ranging from titanium to rubber, leathers and even chocolate. 3D printers can create very complex structures of mixed materials and print almost anything, from jet engines to jewelry to houses and even medical prosthetics.
Artificial Intelligence (AI) is defined as an area in Computer Science dedicated to install human intelligence in computers and other machines. AI is the core Singularity Sector, combining processes, data collected, and applications from other sectors to improve intelligence beyond humans. AI is also applied in most Sectors, being the key to Big Data analysis, Smart Homes, Autonomous Vehicles and Aircrafts, to name a few.
AI will change the way most things are done at work, at home, and in life in general. To stay up to date, companies are heavily investing in AI technologies, often in smaller companies to get a head-start vs starting form scratch. AI is one of the fastest growing Singularity Sectors.
Big Data (BD) is defined as high volume, high velocity and/or high variety information that requires new forms of processing and, if well processed, can significantly enhance insight and decision making.
Primary drivers for companies to invest in Big Data are better resource management and insights into customer behavior and trends. Hindering the widescale and faster growth of Big Data are safety concerns and system barriers between departments and current tools used. As these concerns get addressed, there will be nothing standing between exponential penetration of Big Data systems in many industries.
Big Data is inherently at the same time the reason, the driver, and the potential for Blockchain Technology. The tremendous potential for change is brought by the link of Big Data with the Internet of Things (IoT) and AI. IoT has substantial potential for data generation by 2020, with 21 billion IoT endpoints estimated to be in use. The aera of Machine to Machine (M2M) is born.
Bioinformatics interlinks computer science, statistics, mathematics, and engineering to analyze and interpret biological data. The range of application is fairly wide. In 2015, genomics was the dominant piece of the market with 27.2% market share.
The introduction of bioinformatics has greatly reduced failed R&D expenditure: The majority of drugs fail in the latter phases of clinical trials and Bioinformatics’ predictive drug discovery and drug design processes have helped reduce the risk of dedicating too much time and resources in a wrong area.
To effectively link and study genome, protein sequences, microorganisms, and their link to bodily functions and malfunctions (such as disease), biological data must be organized and combined to form a comprehensive picture. As such, Big Data plays a major role in Bioinformatics, so does the use of AI (for example to predict trends and identify patterns).
A blockchain is an open, distributed ledger that automatically processes transactions and creates a flawless digital database shared by everyone on the network. The blockchain is constantly growing as completed blocks and new transactions are added in a linear, chronological order.
The decentralized structure for certifying information means transactions don’t have to pass through e.g. banks, avoiding the risk of manipulation. Instead, the validation is accomplished via network consensus and cryptography. Blockchain technology could emerge to be the Internet of the financial world.
Internet of things
Internet of Things (IoT) is a system in which objects are connected to the Internet by sensors. After 1999, IoT has expanded beyond such definition to include the connectivity of anything. Smart TVs, wearable health monitoring devices and IoT traffic lights are just a few examples of its applications.
IoT systems serve at least four functions: capturing data, transforming data into usable information, sharing such information via the Internet, and storing it in the cloud. IoT applications range from Human to Home, Retail Businesses, Offices, Factories, Vehicles, and Cities.
Our Advanced Materials focus includes materials with novel or enhanced properties or functions, as well as new device architectures.
Neuroscience is the scientific study of the nervous system (the brain, the spinal chord, and peripheral nerves). It now involves several fields such as chemistry, engineering, medicine, and genetics.
Neuroscience can be divided into three major fields: neurobiology (the chemistry of neuro-cells), cognitive neuroscience (the interaction between the brain and behaviors), and computational neuroscience (the creation of computer models). The three fields can be further subdivided into 16 areas of specialization, including cellular, clinical, cognitive, and molecular neuroscience.
A multitude of new energy systems have emerged over the past decades. Only in the last few years clean energy has in some areas reached a state of lightweight, flexible nature that has allowed it to become decentralized and used at the household or community level. As the cost of these units goes down, their sophistication will also increase, and as they are increasingly built on digital technologies, some already speak of the ‘Internet of Energy’.
A key hurdle in new energy systems is storage. Innovation in this area will need to be closely watched along with developments in Smart Grid technologies and Electric Vehicles.
Articulated robots can adapt to various applications, such as pick and place, palletizing, painting, and welding. The ease with which these processes can be replaced by robots has already had an impact on the job market.
As industrial robots increasingly get used in drilling, casting, welding, forging, bending, stamping and grinding, and laser cutting in the metals and machinery industry, this is the next leg of growth in industrial robotics. APAC is expected to hold the largest market share between 2017 and 2023. The low cost of production isn’t anymore the key driver to move to Asia.
The Space industry manufactures and services products (hardware and software) going into earth’s orbit and beyond. While its revenues represent about 1% of the world’s GDP, its impact is by far more widespread: transportation (e.g. GPS), banking (e.g. Data Management), Telecoms (e.g. Satellites), Healthcare (e.g. weight-free research), and Defense among others.
Space research has led to many down-to-earth applications. The industry can be divided into at least three main fields: Satellite, Support of ground equipment (e.g. broadcast satellite dishes), and Launch (e.g. vehicles).
Virtual reality (VR) immerses the user in a virtual world, augmented reality (AR) overlays digital information onto the physical world. Both are redefining existing ways of doing things, from buying a new home to interacting with a doctor or watching a concert.
Pokemon Go by Nintendo and its instant penetration is one example of accelerated digital change in AR. From games, applications now already expand into 3D films and Healthcare.
To illustrate our investment strategy, we’d like to show you a few examples that made it into the Singularity Universe. What they all have in common: They don’t classify as tech companies, yet all are driven by innovation and have demonstrated the ability to create value for investors.