The past 20 years have seen technology reshape some markets completely – but which industries and which parts of our lives will see the deepest overhauls in the years to come?
Think back to the year 2000. Only two decades ago, there were plenty of markets we now take for granted that barely existed, because the products traded there were still to be invented. Smartphones, for example, have spawned an entire in-your-pocket digital ecosystem. Social media platforms such as Instagram could not exist as they do without smartphones, nor could ride-hailing services; video chat would be far more limited, as would user-generated content. It’s not just phones either. Digital streaming has transformed the film market and music market. Cryptocurrencies didn’t exist. This phenomenon was not unique to digitalisation. The idea that a strange agglomeration of things that range from diet to meditation might become known as the wellness market and might be worth more than USD 1 trillion would have seemed inconceivable 20 or even 10 years ago. With this in mind, what are some emerging or fast-changing markets that will shape the next 10 years, what drives them, and what can we expect of them?
Unsurprisingly, the pandemic has seen huge leaps in the digital delivery of education. But prior to the pandemic, education was one of the least disrupted sectors in the world. According to a Credit Suisse report, in 2019 the education market was worth USD 5 trillion globally but only 2 per cent of it was digital. Indeed, high-tech teaching tools aside, most classrooms would be recognisable to somebody from 150 years ago.
The pandemic has shown us a number of things. One is that the parts of education that involve learning new information are very amenable to digital delivery. Furthermore, by using data analytics and technologies such as AI, these parts can be delivered in a highly bespoke, individual way that adapts to children’s needs in real time. All this represents an enormous opportunity for both existing providers of education and so-called EdTech companies. Digital curriculums will be able to offer more subjects. This will be a particular boost for children in poorer and more remote areas. Meanwhile, very academic children will be able to take their studies far further. Many universities (such as MIT in the US) have already made their syllabuses available online. There is no reason a very capable student should not extend into university courses while still at school – or, for that matter, study less common languages such as Persian (Farsi). Some basic interactions such as language practice may be taken over by chatbots. But none of this is to say the classroom is finished. Rather, classroom time will be spent learning social and collaborative skills and teachers will be able to give students more individual time.
Autonomous and electric vehicles
It is sometimes easy to forget how over the 20th century, cars fundamentally shaped the physical world we live in. They are responsible for everything from the growth of sprawling suburbs to much of the oil industry. So any change in our autopia will fundamentally change the world. The two big changes that will shape the car market in the coming decades are electric cars and self-driving cars. The former are already fairly commonplace and offer a fairly straight swap for petrol-powered cars. The latter could result in a total reshaping of the car market.
Many major manufacturers are betting electric cars will take over soon. Jaguar says it plans to sell only EVs from 2025, Volvo has said the same from 2030, and GM from 2035. “We are past the tipping point. Electric cars likely follow an S-type adoption curve as the choice expands and the technology evolves, in short, their convenience prevails,” says Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer. This will have a huge impact. Road transportation iscurrently the largest single consumer of oil (just over a third, according to the OECD). Cities will become far less kets. Battery technology and associated industries, already a huge growth area, will boom – as will battery recycling further down the line. Power grids will be reshaped around both the need to use cars and, potentially, stationary cars being used as batteries to store power.
Autonomous vehicles are likely to be a little further off, but the effects could be even more dramatic.
Cars will become places of entertainment and meetings and journeys will be more akin to private train journeys. In the medium to long term, and with high penetration, according to a report by the open location platform Here, car autonomy could have a significant positive effect on congestion, particularly when combined with smart city infrastructure (though in the shorter term it may worsen it). Most interesting is the effect it could have on car ownership. No longer driving yourself could change the idea of the car as your second biggest possession, after your home. Ride-hailing services such as Uber have already paved the way for viewing mobility as an on-demand service, and numerous surveys show the young are not as interested in driving as previous generations were.
If a car is not something you drive yourself, perhaps it’s not something you need to own. You just call one when you need it. This would reshape the car market entirely – manufacturers might effectively become fleet owners. It would also reshape insurance markets and boost entertainment markets – not having to control a car frees up hours for watching films or working. What is more, cars spend about 95 per cent of their time parked – in cities this space could be repurposed, perhaps for much needed housing.
In the long term, the car in the driveway could become as much a thing of the past as a horse in a stable. There are, of course, impacts on the labour market too. Taxi-driving has long been a job that is a first rung on the economic ladder, particularly for groups such as immigrants. It is likely to disappear (with a few exceptions such as London’s nostalgia-based black cabs). Similarly, long-haul trucking is a reasonably well-paid job that doesn’t require a degree. It too will go.
The internet of things
On one hand, the Internet of Things (IoT) is already with us. There are billions of connected devices and, according to McKinsey, by 2023 there will be 43 billion – over five things for every human on the planet. Yet there is a potential bottleneck, particularly from an industrial perspective. This is 5G, or rather the lack of widespread 5G. The rollout of low latency 5G networks will enable much faster speeds, vastly more connected devices and greater data transfer. It will turbocharge the Internet of Things. Like many technologies, the Internet of Things will both affect existing markets and create new ones. McKinsey notes: “IoT technologies have already given rise to a number of... applications in sectors as diverse as Industry 4.0, smart cities, smart homes, connected cars, and e-health.”
Looking ahead, the IoT will enable everything from largescale adoption of totally connected supply chains to widespread monitoring of buildings and power networks. What is more, growing computing power and, crucially, edge computing will enable real-time processing of the data from these things. This will deliver benefits ranging from efficiencies and cost savings to faster manufacturing on demand, much smarter cities, and improved safety. It will allow predictive maintenance and more distributed computing power. Over the past 10 years, via smartphones, we’ve gone from a computer on every desk to a computer in every pocket. Soon, we can expect computing in everything.
If you want an example of how tech is already changing health, you only have to look at imaging and MRI scans. Algorithms can already read these better than radiologists, at a fraction of the cost. In a different vein, telephone and online consultations were starting to replace some faceto- face consultations even before the pandemic. Now they are mainstream. The efficiencies these will drive are crucial – healthcare is enormously expensive and staff costs are very high. Also, in countries with ageing populations ranging from the US to Western Europe to China, the costs are likely only to go up and be borne by a smaller number of workers. According to the US Centers for Medicare and Medicaid Services (CMS), expenditure in healthcare in the US is expected to cost USD 4.2 trillion in 2021 and USD 5 trillion by 2025. This is almost 20 per cent of GDP. Facebook, Amazon, Apple, and Google invested USD 3.7 billion in healthcare in 2020.
Digital health ties into many other areas too. The Internet of Things means the number of wearable devices will proliferate, allowing more real-time monitoring. AI and machine learning mean ever-growing volumes of patient data will be mined for insights and patterns, ranging from how diseases spread to potential new applications for existing drugs. Treatment will be far more bespoke and based on individual health records. Indeed, the cost of sequencing an individual’s genome, which 20 years ago was around USD 100 million, will soon fall below USD 100.
This could lead to predictive and personalised healthcare, facilitating a shift from a volume-based to a value-based system.
At birth it could be known, based on your genome, whether you are likely to suffer heart problems in your fifties. When you age into the risk zone, you could be put on drugs such as statins just in case – and here, prevention would be far cheaper than cure. We will also see changes in how drugs are manufactured. AI can, for example, sift through existing trial data to suggest new uses for existing drugs. It can also massively speed up trials.
The cost of healthcare for many countries has long been a budgetary headache that was expected to get far worse. Technology can help make the healthcare system more efficient and more resilient at the same time, curbing rapidly rising costs and opening up new markets in areas ranging from wearable tech to AI. Indeed, many digital health companies are betting that the savings made by MedTech will be so great that they will effectively defuse this demographic time bomb.
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Throughout history, markets have been centres of trade, commerce, and social exchange. They are sources of prosperity that have made the world richer in many more ways than just financially. In the latest issue of Vision magazine we take a broad and unexpected look at markets in all their facets, and showcase the diversity of roles they play in our lives.
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