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The machines are not coming, they are already here! The world is changing at an exponential rate and creative disruption has become a cliché. Technological innovations like taxi aggregators, ecommerce, WhatsApp, and internet have changed the societies, culture, economies, jobs, companies, and markets. Not only the changes were fast, but the acceleration in this pace of change has been simply astonishing.

For investors it is crucial to know what kind of changes might take place in future that will create new winners like iPhone, Uber, Amazon, or Google. Well, none of these companies are in Indian stock exchanges, but we do have our share of Infy, Bharti, and Maruti. Technological developments will not only destroy some industries but will also be the key drivers of global economy for decades to come. For example a change like switch to electric vehicles will kill industries like IC engines, but will create a new star like storage batteries.

Pace of change can be unnerving

Investors need to know which trends will shape the future, which one will have the maximum life changing impact. When you anticipate that almost all cars will be moving on batteries, it will create a massive need for batteries, charging points, lead, lithium, graphite, and so on. To understand, how dramatic and fast can be these changes, just look at some figures below –

  • It took the landline telephone 75 years to hit 50 million users - The Wall Street Journal.
  • It took airplanes 68 years, the automobile 62 years, light bulbs 46 years, and television 22 years to hit the same user milestones - Vala Afshar, the "chief digital evangelist" for Salesforce.com Inc.
  • YouTube, Facebook and Twitter hit that 50-million user mark in four, three and two years, respectively
  • “Angry Birds” app took just 35 days

From landline telephone’s 75 years, to Angry Birds’ 35 days, it is an exponential growth! And the backbone of all the changes in world’s growth has been technology. And in future also it will be technology that will make us richer, kill many jobs but create new type of jobs, improve governance, reduce corruption, and make life better.

A video depicting future in 2030, not too far from today -
 

Anticipating Future

This video explains the pace of technological changes in very simple manner -

 

Another interesting video by Pearson that explains accelerating global changes and the importance of knowledge economy -

Time gap between the first two innovations in transportation – canoe, and skis, was reportedly near 2000 years! It came down to few centuries, and then few years now. Transportation innovations are another case of accelerating pace of changes. See the tiny but interesting video here – 

(While watching this video above, there is a mention of Stagecoach, by the way, it is also a 1939 American Western film directed by John Ford, starring Claire Trevor and John Wayne in his breakthrough role, you can watch it here - https://www.youtube.com/watch?v=5un3qOrnQig)

And the best stocks are here

If you want to invest for the next few decades, may be for your retirement if you are young, or for your kids, then buy these stocks and then forget about them. Investment rationale for each of these stocks would be posted soon.

  1. Siemens - 1299
  2. ABB - 1616
  3. Johnson Control Systems - 2700
  4. Schneider - 122
  5. Honeywell Automation - 17926
Published in Macros