I was hopeless at science at school. After I failed both my chemistry and physics 'O' levels, the school decided that I should repeat the chemistry exam to get at least one science subject under my belt. But I got an even worse mark the second time around. They finally gave it up as a waste of time.
Now though, I am fascinated by science. We saw in the nineties how advances in internet and digital communications led to stock successes such as Google, eBay and Nokia.
And the good news is that technology has continued apace since then. Over the next few years, I think we could see a host of remarkableinvestment opportunities on the back of some seriously exciting developments in technology.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Today I'd like to talk about ten of those developments. It's a list that was put together by technology specialist Walter Price. And it points to some of the most exciting opportunities you'll find for some time.
The great technologies of the next decade
1. Internet TV and video
The PC will be transformed into a consumption device for information and entertainment. The explosive growth in traffic from online videos will only gather pace. Recommendation engines will grow significantly in importance and media content will be freely available over the internet. That's bad news for journalists like me, but it's bound to produce a host of exciting new opportunities.
2. LED technology
LEDs offer 90% energy savings and a significantly longer lifespan in comparison to regular light bulbs. Over the next few years, LED technology will replace much indoor and outdoor lighting. According to Dialight (LSE: DIA) "by 2020 the adoption of LED lighting will have saved as much energy as is generated by six hundred power stations, equivalent to the emissions of all the passenger cars in the world today".
3. Cloud computing
This is the biggest trend in enterprise computing since the late 1980s. In it's simplest terms, it is the idea of IT as a service. So instead of maintaining huge rooms full of computers in-house, you can rent computing power from a third party who owns vast server farms. It is already enabling businesses to move to a more efficient IT model, as it offers cost savings, scalability and flexibility. For most large companies this will be a two-part journey moving to an internal cloud of fewer, large data centers before eventually moving to external cloud vendors.
4. The 'smart grid'
The electrical grid is the world's most complicated machine. Even so, it can no longer adequately balance future supply and demand without huge investment. Neither higher penetration of renewable energy, nor large-scale electric car deployment will be feasible without investment in the smart grid. Billions will be pouring into this sector in the future.
Claim your FREE report: The 6-step game-plan for
spread betting profits
5. The democratisation of computing
Access to computing resources was for a long time the domain of the desktop computer and later the laptop. But now, it is fast being complemented by many others, such as smart phones, tablets, TVs and navigational devices. Interaction is moving away from keyboards to a variety of touch, voice and gesture-aided access.
6. Solar power
Prices are falling every year in this smart renewable sector. In the foreseeable future, solar power systems will likely come much closer to delivering electricity at grid parity, even in challenging environments.
7. Display technology
A transition to OLED (organic light emitting diode) displays in the coming decade has started. This will provide thin, low-power, better-picture, bendable and low-cost displays.
8. Rechargeable batteries
There's one thing that mobile devices, hybrid cars and power plant electricity storage all have in common. They require rechargeable batteries that can store a huge amount of energy. Growing energy storage capability is a priority, in addition to the progress currently underway to increase energy density of storage systems.
9. Gesture recognition
Right now, you're probably controlling your computer through a mouse. But the Windows-icon-mouse-pointer-based user interface has been around for almost forty years. The introduction of motion-based technologies from game consoles and the evolution of user-device interaction (gesture recognition, eye tracking, speech-to-speech translation, etc.) is revolutionising this area. Expect a complete refresh cycle of hardware, software and peripherals. The iPad is just a first step in this direction.
10. Global connectivity
In ten years time, there could be 50 billion devices connected to the internet. This incredible tenfold increase in wirelessly connected devices requires a massive growth spurt in production. It will continue to be one of the biggest drivers of technology this decade. And think: the next billion first-time users will come via smart phones, not the PC.
Successful businesses of the future must harness these technology trends, using cloud computing to cut costs, for example. Smart technology will offer a competitive advantage. The smartest technology will quickly destroy slower, less functional alternatives. There is a fortune to be made here for investors.
The really big stock market winners in the next few years will be the successful pioneers of some of these innovations. These will be the companies that actually do the science, hold the patents, and take the great ideas of the research lab to the market.
This article was first published in Tom Bulford's twice-weekly small-cap investment email The Penny Sleuth.
-
RICS: Housing market subdued in May but outlook brightens as sales stabiliseThe property market lost momentum after April’s stamp duty hike, but sentiment is improving
-
The most underrated places to buy a home in the UKHouse prices tend to be sky-high in some of the most desirable parts of the UK. We look at ten underrated areas which boast great amenities without an outsized price tag.
-
Somero: trading this overlooked bargainFeatures Mechanical-screed maker Somero dominates its niche and is attractively valued. Matthew Partridge picks the best way to trade it.
-
How to find big profits in small companiesCover Story The small- and micro-cap sectors are risky and volatile. But with careful research and patience, investors could make huge gains. Matthew Partridge explains how to find the market’s top tiddlers.
-
Fetch! The Chinese small-cap stocks to buy in the Year of the DogOpinion Each week, a professional investor tells us where she’d put her money. This week: Tiffany Hsiao of Matthews Asia selects three Chinese small-cap stocks with exciting potential.
-
Small and mid-cap stocks with big potential
Opinion Professional investor Guy Anderson of the Mercantile Investment Trust selects three small and medium-sized firms with promising prospects that the market has missed.
-
Get cheap, reliable growth from smaller companiesFeatures One of the most reliable long-term investment trends is the long-term outperformance of smaller companies over blue chips. Max King picks some of the best ways to buy into this growth.
-
Now the bitcoin bubble’s burst, what’s the next big thing?Features Forget bitcoin, if you want to increase your wealth faster than most other people, you need to find the next big thing. Merryn Somerset Webb suggests some places to look.
-
A one-stop shop for global small capsFeatures Setting up global smaller-companies funds is a tall order. Max King tips two that have managed to pull it off.
-
Three solid Aim stocks to buy nowFeatures Many Aim-listed stocks if held for two years, are exempt from inheritance tax. Here, professional investor James Rae picks three Aim stocks to buy now.
