Investing in the technologies of the future

The pandemic, along with coronavirus vaccines, has turned the spotlight on the biotech industry. This sector includes companies specializing in the development of medicines and diagnostic technologies to treat and prevent disease. This global market is projected to grow 15% annually to reach $1.683 billion by 2026, according to Mordor Intelligence.

Population aging is also fueling growth in the medtech sector. Firms offering AI diagnostics, medical data collection and analysis, or even less invasive operations that reduce hospitalization times should see their demand accelerate, according to Frédéric Rollin, strategist for asset manager pictet. The impact is expected to be particularly significant for pharmaceuticals, genomics, food and chemical industries.

Biotech companies remain a risky business, however, points out Antoine Fraysse-Soulier, market analyst at eToro, as uncertain funding and the possibility of research failures leading to drug development can impact results.

  • Blockchain: powered by cybersecurity

The blockchain (or blockchain) is the underlying technology that provides security and transparency to the cryptocurrency market. According to Fortune Business Insightsthis market is expected to grow from $7 billion in 2022 to $164 billion in 2029. This technology has applications in many industries, such as energy and financial services.

Blockchain is often associated with cryptocurrency investing, which itself is plagued by scams and high volatility, experts say. It can, however, contribute to the alternative portion of an investment portfolio. Yale University economist Aleh Tsyvinski believes investment portfolios should have a 1% to 6% allocation in Bitcoin for diversification purposes.

To get a share of the profits of this market while limiting risk, one solution is to choose safer financial instruments, such as exchange-traded funds.

· Cybersecurity: sophisticated technologies

The global cybersecurity market was valued at $180 billion in 2021 and is expected to grow by a compounded 14% over the next five years, according to Mordor Intelligence. This growth is fueled by BYOD trends (Bring your own device), artificial intelligence, the Internet of Things and machine learning, analysts say.

Cyber ​​security technologies are always in demand as hackers adapt to the latest cyber control devices and manage to break through these protections. A survey by the World Economic Forum found that after the impacts of COVID-19, which has accelerated the shift to digital work, approximately 87% of executives were considering improving their cyber resilience policies in the near term.

· Quantum Computing: solving complex problems

Quantum computing uses the laws of quantum mechanics to solve problems that are too complex for classical computers. This market could exceed $9 billion by 2030, with an annual growth rate of 40%, according to Statista.

This market covers software, hardware and cloud computing services. The technologies derived from quantum computing mainly affect the sectors of energy, finance, pharmaceuticals, telecommunications and agriculture.

· Artificial intelligence: facilitating fraud analysis

Artificial intelligence (AI) simulates human intelligence through machines and computer systems. This technology applies to industries such as robotics, medical treatment, manufacturing, environmental protection and network construction.

Retail and financial services are the two industries investing the most in artificial intelligence, according to International Data Corporation (IDC). Financial institutions mainly use this technology for fraud analysis and investigation. According to data from Statistica and IDC, revenues from AI systems are expected to reach $110 billion by 2024, with an annual growth rate of 20%.

· Internet of Things (IoT): to stay connected

The Internet of Things consists of the interconnection of inanimate objects to the Internet network. This technology incorporates software, sensors, processing capabilities and other technologies that exchange data with other devices. Includes a wide variety of items, from smart homes to self-driving cars to aircraft engines.

The IoT market could reach $2.465 billion in 2029, growing 26% annually, according to IDC. The energy, manufacturing and healthcare sectors currently hold the most promising applications.

· Metaverse: growing, despite the fall of Meta

The metaverse is a digital space that allows users to come together in virtual reality to socialize, play or transact. The growth of this global market is estimated at 40% annually. It could represent $5 trillion by 2030, according to a McKinsey study. In 2022, investment in this sector more than doubled from the previous year to exceed $120 billion.

The COVID-19 outbreak has accelerated the development of the potential of this market. In 2021, companies in the sector raised more than 10 billion dollars, more than double the previous year.

According to McKinsey forecasts, the sectors that should prevail in the metaverse universe are e-commerce, education, advertising and online gaming. Despite the steep drop in the share of Facebook-powered Meta, with net results down 52% in the third quarter, Morningstar until recently continued to expect industry growth to accelerate from 2023.

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