Technology

Investing In Emerging Technology  

As technology continues to evolve, new investment opportunities are cropping up. Sometimes called disruptive technologies, emerging technologies can be defined as tech sector segments that are set to massively impact human lives in the next decade. Many types of technology fall under that umbrella, but a few of the best-known categories are artificial intelligence (AI), robotics and mobile technology. Read on for a look at the overall emerging technology space and how investors can jump into those three specific arenas. 

Large tech enterprises leveraging their scale 

How much are tech companies investing in innovation driven by emerging technologies? The survey results indicate that many companies–even large enterprises, are only moderately investing in innovation ($0-$9.9 million). However, some tech giants, flush with cash, have the means to invest at the high end ($500 million or more annually) compared to mid-market tech companies and startups. These companies have the resources to place many bets and take more risks. They expect that they won’t all pay off but know that the learnings may still prove valuable. Smaller companies have less money available to invest and thus much less room for error. They need to manage their portfolios and investments in a very disciplined and structured manner. Historically, one misplaced bet or missed product cycle can have disastrous effects. Yet by employing the principles of dynamic investing, they may be able to level the playing field with their larger brethren. 

Tech companies expect quick ROI 

Tech companies know well the mantra “disrupt or be disrupted.” This explains the aggressive expectation for achieving significant return on investment (ROI) on innovative technologies. Overall, 44 percent of respondents expect significant ROI within the first six months, and a total of 71 percent within the first year. Overall, in large enterprises that can scale operations faster, 80 percent expect to realize significant ROI in the first 12 months. In mid-market tech companies, 69 percent have this expectation. And in startups, it’s 64 percent. From a geographic perspective, companies in Taiwan expect the fastest ROI with 83 percent of respondents expecting significant returns within the first 12 months. German respondents were second with 80 percent, followed by the United Kingdom at 78 percent. China and the United States were closer to the average at 71 percent and 70 percent, respectively 

Research  

Research firms are tracking as many as 150 different technologies with the aim of identifying the tech sectors that are “showing promise” and may be impactful in the next few years. In 2016 we identified eight emerging technologies that are set to converge in the virtual and the physical worlds. Dubbed the “essential eight,” these new technology areas are AI, robots, drones, virtual reality, augmented reality, blockchain, 3D printing and the Internet of Things. Among these, many analysts agree that embedded and formative AI are set to be among the most influential technology trends. Embedded AI involves the use of machine learning within embedded systems to analyze locally captured data; it has its biggest application in the manufacturing industry. Meanwhile, formative AI uses machine-learning techniques to alter existing content or create new content based on an original, generating thousands of variations. Real-world applications include synthetic drug discovery and even advancements in autonomous vehicles. What’s the takeaway? Experts agree that emerging technology encompasses diverse areas of the market, although standouts are coming to the fore.