As we transfer into 2023 and past, we anticipate to see main technological tendencies proceed to shift the way in which we expertise and work together with the world. The digitization of the financial system is continuing at a brisk tempo, and enterprise leaders world wide are actually taking full benefit of the more and more broad set of automation applied sciences obtainable, from improvements in software program and the cloud to developments in robotics and machine studying.
We consider these tendencies will present funding alternatives associated to 5 key themes, every a possible secular beneficiary, which will assist buyers benefit from cyclical market weaknesses.
High 5 Know-how Tendencies for Buyers to Watch in 2023:
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Liquid Biopsy Will Allow Early-Stage Most cancers Detection |
Autonomy Will Redefine Mobility |
Now Coming into a World of Related-Care |
AR/VR Will Break Obstacles Between the Bodily & Digital Worlds |
Reshoring Will Drive an Automation Revolution |
ROBO International presently gives three progressive index portfolios to permit buyers to capitalize on these 2023 know-how tendencies, together with our Robotics & Automation Index (ROBO), Healthcare Know-how & Innovation Index (HTEC), and Synthetic Intelligence Index (THNQ). To be taught extra, go to our web site at www.roboglobal.com.
Webinar Transcript:
Lauren Hein:
Hello all people. Thanks for becoming a member of us this morning for our Disruptive Tendencies to Watch in 2023 dialog. I am Lauren Hein. I am the pinnacle of Advisor Relations at ROBO International. I am right here with our analysis crew, our esteemed trade specialists, Jeremie Capron, my director of analysis, Lisa Chai, our senior analysis analyst, and Zeno Mercer, our analysis analyst. And we will cowl the applied sciences that basically excite us going into the brand new 12 months. First issues first. You’ll be able to obtain this report at roboglobal.com, and they need to have been emailed out to you at registration as properly. So they need to be sitting in your inbox if you would like to observe together with our dialog. Our 5 tendencies to observe this 12 months within the order that we will focus on them at present. Primary, liquid biopsy will allow early-stage most cancers detection. Quantity two, autonomy will redefine mobility. Quantity three, now coming into a world of linked care. 4, AR/VR will break boundaries between the bodily and digital worlds. And our remaining thrilling pattern for 2023 is reshoring will drive an automation revolution. So the primary query I assume is open to all people, then we’ll begin with the liquid biopsy dialog with Zeno. How did you guys arrive at these 5 tendencies for the 12 months?
Jeremie Capron:
Properly look, at ROBO we expect robotics, AI, and healthcare applied sciences are a set of applied sciences that may be utilized to so many industries, very very similar to the web over the previous 20 years, and in the previous couple of years we hit an inflection level and we have seen machine intelligence considerably widen the vary of doable purposes. So a decade in the past was primarily about robots automating the manufacturing of vehicles. However in the previous couple of years we noticed robots popping out of the manufacturing facility and discovering super purposes in so many areas, warehouses, logistics, we’ve got flying robots, we’ve got robots driving vehicles and vehicles, we’ve got surgical robots, we’ve got automated programs throughout us, in labs, in transportation. So there have been so many areas to choose from. And so we slender it all the way down to these 5 tendencies as a result of we consider they are going to have an vital affect on funding methods over the following few years.
Lauren Hein:
And I did have a look at the 2022 tendencies report, and there is some continuity there from what you guys had been enthusiastic about final 12 months for certain. Zeno, I will begin with you. Discuss to us about liquid biopsies early-stage most cancers detection, and stroll us via this primary section of the report.
Zeno Mercer:
Proper. So one of many first pattern that we highlighted for 2023 is the idea often known as liquid biopsy, which is actually the flexibility to detect most cancers within the blood, the purpose being to detect it earlier and fewer value invasiveness to stop the unfold from stage one to stage two, stage three, stage 4 most cancers, and finally present an outlet, a capability for extra folks to get remedy for most cancers. So I believe one factor to consider right here is first, what’s liquid biopsy? Primarily it is detecting tumor DNA within the blood. This builds upon years and years of know-how development, each {hardware} and software program, that has allowed firms to exit and market merchandise, get FDA approval, actually, after which get insurance coverage reimbursement from offering these companies as a result of they validated the scientific efficacy of this. However finally, liquid biopsy is a know-how that we actually consider will take off in 2023 with new approvals and elevated uptake of individuals using this going ahead.
Lauren Hein:
Do you’ve any particular firms which might be inside any of our indexes that excite you on this know-how? What would you say is perhaps the publicity inside any of our indexes by proportion foundation? Give us some recommendation right here.
Zeno Mercer:
Okay. So I will begin along with your second query right here. So our publicity and the way we have a look at the subsectors, if you’ll, that we’ve got linked to liquid biopsy. It might be remiss to speak about liquid biopsy with out speaking in regards to the Genomic area. And we’ve got about 11% uncovered to the Genomic area via firms reminiscent of Illumina. So Illumina actually is a pioneer of DNA sequencing, which is actually enabling the liquid biopsy area to behave and work. So Illumina additionally pioneered one of many first… They weren’t actually the primary to market with a liquid biopsy, however they’d an fascinating story the place primarily they had been doing non-invasive prenatal testing in 2013 on girls who’re pregnant, to detect if their kids, their infants, they had been nonetheless within the womb, had any genetic ailments, NIPT, non invasive prenatal testing. What they discovered although was that they really detected most cancers tumor DNA within the samples they obtained.
They usually realized that, hey, we’re discovering most cancers in girls and a few of these folks may not know they’ve it. So they really went out and reached out to all of the folks that had submitted samples, and so they truly found that sure, many certainly had no indication, no signs, no analysis, something. And so what they realized is that, hey, we’re onto one thing right here and we will truly detect most cancers in blood like that. Now, they are not the one ones who’ve finished this. In reality, one other firm known as Guardant Well being had truly already been somewhat additional alongside in progressing their Guardant 360 machine or assay, actually, which may detect most cancers early as properly. So these are two completely different firms that we’ve got. There’s additionally a 3rd, Vercyte which has numerous merchandise which might be detecting particular cancers reminiscent of lung most cancers, thyroid most cancers, and prostate most cancers, which might be already out there at present and obtainable to folks to be used and getting for utilization.
So docs are prescribing this if they’ve any signs or if they are a excessive danger inhabitants. Again to Grail although, which is the corporate that Illumina spun out. Primarily Grail has a pan most cancers check that may detect over 50 various kinds of cancers. And that is obtainable to most people now, nevertheless it’s presently about $850 a check. And it isn’t coated by insurance coverage. So that’s of their pipeline to attempt to get coated within the subsequent a number of years. However, for instance, you thought you might need most cancers or it was uncertain a health care provider might truly prescribe this check. So there could be an out-of-pocket pay for $850 presently. But when you concentrate on how a lot cheaper that may be than ready years to detect and discover a later stage most cancers, you possibly can actually begin to see the profit right here of how early most cancers detection, at that baseline worth, if it will get coated, could possibly be very impactful for the healthcare ecosystem and people’ lives.
Lauren Hein:
Is there a world that you just envision within the close to future the place we’ll go in for routine blood work and begin performing some customary most cancers screenings at that time?
Zeno Mercer:
Sure. So sooner or later, liquid biopsy will in all probability be part of yearly or bi-annual screening for folks. It might rely, perhaps there is a particular most cancers that’s increased danger for a person, and if that check had been cheaper, perhaps that may be the check that may be opted in for. However finally, as the price of sequencing goes down, as this know-how improves and scales out and so they can have improved economies of scale from the fee construction, you will positively begin to see liquid biopsy, extra of an annual screening, and most cancers detection charges would technically go up, however the stage at which most cancers is detected will go down, which might enhance the survival charges of many, many individuals. You will have disparities of 5, 10, 20x survival charges for a lot of cancers, and plenty of of these, which do not have a correct or established protocol for detection. So that is actually sport altering know-how that we consider could have fast adoption ramping up within the subsequent a number of years.
Lauren Hein:
So to tie this again to our HTEC index, primarily these firms you think about within the genomic subsector, are there different secondary subsectors which might be touching this?
Zeno Mercer:
Yeah, so whereas I began with Genomics because the core, we even have the Diagnostic subsector, which is 15% of our index and the Course of Automation. So if you concentrate on how the liquid biopsy course of works, you’ve firms which might be constructing particular assays that may go and both accumulate or detect the most cancers itself, however there’s additionally Lab Course of Automation. It needs to be collected, it needs to be securely transported again to a lab. It is not being finished on website, usually talking. After which one other secondary market that we even have publicity to here’s a Precision Drugs facet. So whereas earlier most cancers detection is a good factor and may present higher outcomes, on the opposite finish of the spectrum the precise remedy protocols in place are being significantly enhanced via the event of precision medication with CAR T therapies, CAR NK therapies and different precision medication that may goal the most cancers with out extra of a shock and strategy like chemotherapy and different strategies.
So we’re actually enthusiastic about seeing early detection, met with extra exact medication, having an enabling impact at decreasing most cancers mortality charges and the general value and burden of most cancers from each an financial and alternative value for folks.
Lauren Hein:
Superior. Zeno, positively one thing that touches all people. So thanks a lot for that outlook. Jeremie, I will pivot over to you. Let’s discuss autonomy redefining mobility. And really that is an extension of two of the themes from final 12 months’s report that robots are coming to avoid wasting the provision chain and {that a} manufacturing facility automation tremendous cycle is right here. So perhaps place to begin is speaking in regards to the greatest progress alternatives in mobility and linked autos within the subsequent upcoming 12 months.
Jeremie Capron:
Certain. Properly look right here, the important thing phrase is autonomy, and autonomy is the following step of improvement for machines. And so till not too long ago, automation was actually about programming machines and computer systems to do repetitive issues in a really systematic manner, very quick and precisely. Now, with the appearance of machine intelligence, we’re in a position to push it to the following stage, which is autonomy and programs that may make choices primarily based on their atmosphere and the way it modifications. And in order that’s been enabled by super progress when it comes to computing energy, when it comes to gathering sturdy knowledge units and operating machine studying onto them. After which when it comes to actuation and the way these machines are in a position to react actually quick. So after all we’re all speaking about autonomous vehicles, and that is the holy grail on the market. And admittedly talking, we’re getting shut. We have seen the beginning of the primary ROBO taxi companies, industrial companies, being launched in the US over the past couple of years, in order that’s coming actually quick.
However we expect that is simply the tip of the iceberg. And in actuality, autonomous mobility is gaining loads of traction in areas that you could be not concentrate on. And one of the promising areas, in our view, is absolutely within the warehouse. So it goes again to what you had been saying decrease and about warehouse automation. In reality, there are a whole bunch of 1000’s of autonomous cell robots working at present in distribution facilities for e-commerce and in different areas of the provision chain. We predict that is in all probability the faster-growing and most fun piece of autonomous mobility from an investor’s perspective at present. There are loads of firms concerned on this space, lots of that are within the ROBO Index.
Lauren Hein:
I need to ask you subsequent in regards to the firm particularly within the ROBO Index, however do you envision a world sooner or later the place warehouses are absolutely autonomous with none people current there in any respect? Possibly not in 2023, however additional out?
Jeremie Capron:
Yeah, that is definitely the course we’re taking. And if you concentrate on how manufacturing has grow to be very a lot automated areas like automotive and client electronics and issues like that, these producers are tending in the direction of, what we name, the sunshine out manufacturing facility the place you mainly can flip off the lights as a result of there is not any one in there. And we’re not fairly there but at present. However I believe the purpose for provide chains and warehouses and distribution facilities could be very related. However at present we’re so removed from that. In reality, right here in the US, we’ve got greater than 17,000 warehouses, and a low single-digit proportion of these are automated at present. So there is a good distance when it comes to adopting all types of automation gear first after which transferring to autonomous cell robots, and finally the lights out the warehouse.
Lauren Hein:
Really easy segue to firms which might be going to learn as we do extra autonomous programs with logistics and manufacturing automation. So what are a few of your favourite firms? I am assuming most of those are within the ROBO Index particularly.
Jeremie Capron:
Sure. We predict provide chain optimization and warehouse automation and real-time stock administration are the true focus right here, and you will find within the ROBO Index, many firms concerned in warehouse and logistics automation. You have received all types of various enterprise fashions. You have received firms like Zebra Applied sciences right here within the US that do real-time asset monitoring, the monitoring, and tracing of elements of parcels in a provide chain. You will discover firms like KION in Germany which does logistics automation options for the massive gamers, or Daifuku in Japan, that is the world chief in materials dealing with gear. You will discover software program companies like Manhattan Associates, that is a US-based software program firm that does warehouse administration programs, or I can consider Auto Retailer that is primarily based in Scandinavia and does very compact automated storage programs. That is gained loads of traction and that went public final 12 months.
Lauren Hein:
I will drag you again actually shortly to autonomous autos. Possibly let’s first cease with electrical autos. Do you see a transition within the close to future until all of the vehicles on the roads will likely be electrical after which the following step will likely be autonomous autos? Then I need to discuss firms which might be going to learn from progress in these areas, particularly.
Jeremie Capron:
Yeah, we definitely suppose that electrical autos supply loads of benefits over conventional combustion engine-based autos. And the advantages are so huge that the market goes to shift naturally towards that. The massive query mark is over the tempo of this transition, and we will debate round that, however the pattern could be very clear and really highly effective. And should you have a look at investments being made by OEMs, we have seen a dramatic shift over the previous two to a few years when it comes to allocating to EVs. In order that pattern is firmly in place. And it is vital as a result of an electrical automotive is actually a a lot easier automotive than a combustion engine-based automotive. There are fewer transferring components, the upkeep is less complicated, and the design is less complicated, however you want very important investments when it comes to manufacturing property to ship these.
By way of the beneficiaries of the extra electrical and good vehicles, we see quite a bit across the semiconductor trade and the businesses that ship the chips which might be used for the computing facet or for the pc imaginative and prescient facet. And in ROBO, you will discover firms like Ambarella that does pc imaginative and prescient on a chip, and whose know-how is embedded within the subsequent era of autos, otherwise you’ll discover firms like Qualcomm and Nvidia, and Hexagon additionally in Europe.
Lauren Hein:
Okay. One thing within the report that we have not talked about but is drones, drone know-how, particularly for a last-mile supply resolution. Is that one thing you suppose is lifelike? Is that one thing we expect is reasonably priced? And do we’ve got any drone publicity inside ROBO?
Jeremie Capron:
Sure. Drones, we regard as flying robots, and we expect there’s an enormous market potential for such a know-how. At the moment it is nonetheless extra of a distinct segment, however all the massive gamers are experimenting with drones, from supply purposes to stock administration indoors. We predict, proper now, on the industrial facet, there’s an excellent alternative to make use of drones for monitoring and surveillance, and surveying outside. It may be public infrastructure, it may be energy utilities, it may be utilized in mining and development, and agriculture. And that is the place autonomous drones are gaining traction proper now. So when it comes to publicity inside ROBO, it is as soon as once more going to be on the chip facet, and firms like Nvidia and Analog Gadgets are concerned there, Ambarella and Qualcomm or key suppliers of chips which might be being utilized in drones, and particularly autonomous drones.
Lauren Hein:
Is the FAA on board with this, and are we truly doing any drone supply within the US at this level?
Jeremie Capron:
This stays all experimental at this stage, particularly within the US the place we’ve got sturdy regulation of airspace. However we began to see some firms receive authorization to function autonomous drones past the visible line of sight, which implies that you do not want a pilot on the bottom with a line of sight onto the drone. And in order that’s a big milestone that we have simply crossed, and so that you’re in all probability going to see much more deployments going ahead.
Lauren Hein:
Very cool. All proper. Thanks. Jeremie. We will come again to you in a bit, however first, Lisa, let’s discuss how we’re coming into a world of well-connected care. We will speak quite a bit in regards to the web of issues on this part, so perhaps additionally speak, outline the web of issues earlier than we actually get going, and discuss healthcare purposes for the IoT.
Lisa Chai:
Oh, positively. I believe primarily what you are actually seeing is that the healthcare trade is absolutely going via this main transformation pushed by rising prices, doctor burnout, lack of nurses, and sufferers positively demanding simply higher well being care. Who likes their healthcare course of and their plans? So we’re actually seeing developments proper now in healthcare know-how. And we expect that subsequent 12 months can be a sturdy 12 months for areas like customized medication and areas like IoT that you just talked about. So medical IOT, we’re tremendous bullish. We predict proper now these medical units which might be wearable and transportable are actually wanted. They’re non-invasive, and it offers real-time monitoring, and enhancing affected person expertise round entry to healthcare knowledge, and join them to healthcare suppliers. So we’re actually bullish as a know-how that has actually improved via higher cloud applied sciences and higher wifi connectivity and adoption of AI. AI is lastly right here in healthcare. So we now have units you could put on, which might be wearable sensors, that monitor real-time well being care knowledge. So physicians can keep watch over you as you permit the hospital or the physician’s workplace.
Lauren Hein:
Very a lot listening to an extension of final 12 months’s theme that knowledge analytics and AI are going to drive efficiencies in well being care. It feels like that was fairly spot-on final 12 months. Discuss to me somewhat bit about firms inside the well being tech index. I am assuming there’s additionally some crossover with the synthetic intelligence index, however firms which might be actually integral to this area, to this growing know-how.
Lisa Chai:
Sure. Inside the healthcare know-how innovation technique, we’ve got two subsectors the place that basically seize this publicity. One space is in Medical Devices. So these are firms that not simply present surgical instruments, but additionally the IoT units. After which the opposite subsector could be Telehealth. And these two subsectors actually seize this bullish pattern that we will see in 2023 with an incredible quantity of progress behind it. A few of the index members which might be actually main this transformation are firms like Dexcom. Dexcom has developed a transmitter machine that you just put on that measures and sends real-time glucose knowledge wirelessly to the doctor. So that you need not have this painful fingerprint that is very invasive. They’ve actually modified the sport.
Index members like iRhythm, Abbot, and Medtronic, are additionally firms which have actually led the revolution transformation round cardiac monitoring units. So whether or not it is utilizing cardiac screens or sure sorts of pacemakers, you are positively seeing the cardiovascular market actually reworking, the place it is non-invasive, they’re transportable, and also you’re in a position to talk along with your physicians, and so they might keep watch over you as you permit the hospital for surgical procedures. So these are actually game-changing in our minds, and we expect that HTEC technique actually captures many of those firms which might be actually reworking healthcare.
Lauren Hein:
So I am listening to that these appear to be proper now utilized in extra post-care aftercare affected person follow-up purposes. Is there a world the place we use extra medical IoT in diagnostics, or do you’ve any ideas about that?
Lisa Chai:
Sure, I believe you are going to see each of those wearables that offer you biosensing applied sciences. So it might measure your heartbeat and alert and offer you detection on whether or not you might be about to have some healthcare points. So that you’re positively seeing a world converging of that diagnostic giving that real-time alert. After which the AI actually enhancing and serving to the analytics facet. And now as a result of the cloud has actually improved, and the wifi connectivity has actually improved, we’re in a position to get the info actually shortly and get the medical assist that you really want. So you bought the diagnostic facet and clearly on the post-surgical facet, and that is crucial as a result of that basically lets you have much less hospital keep, and you will have a greater affected person end result. And in addition the insurers and healthcare firms are additionally going to see decrease bills for our sufferers and people.
Lauren Hein:
I simply need to verify additionally for everybody, the applied sciences for what you’ve got spoken about, medical IoT units particularly, are usually not one thing we’re discovering on our smartphones at present, not one thing that is simply mass-produced at this level with the rings or a watch. They’re extra specialised healthcare units.
Lisa Chai:
Sure, positively. I believe what you are going to see going ahead, we will see extra options and applied sciences and innovation round patches, wearable patches that might launch a sure sort of remedy, and that is going to connect with perhaps your smartwatch going ahead, or additionally along with your diagnostic resolution. So we will have a world the place we will have all this knowledge that is going to tie in and combine it, and it will ship that real-time alert to your medical suppliers.
Lauren Hein:
After which lastly, once more, to tie it again to the HTEC Index, what subsector do you suppose this usually falls into? Possibly it is a few subsectors. We have talked about a few firms already particularly, however the place do you classify that inside well being tech?
Lisa Chai:
You’ll discover this within the Medical Instrument subsector, which is one in all our greatest subsectors inside the HTEC technique. You’ll additionally see a few of these firms have the presence wanted for Telehealth. And Telehealth, we anticipate that subsector to develop over time as we see all this innovation occurring, as we get extra knowledge and analyze this knowledge, after which additionally be capable of allow a few of these customized therapies and medication to the people and sufferers.
Lauren Hein:
And we’re seeing some bleed over into the AI index as properly.
Lisa Chai:
Sure, precisely. So inside the THNQ Index, we’ve got, as you realize, an in depth quantity of AI scoring when it comes to purity of AI income. So many of those firms which have the healthcare publicity, they might not have the AI income publicity, however we’ve got a very good record proper now the place we’re actually being thorough, when it comes to what firms will make it to the index. However presently, we’ve got a number of firms which have healthcare publicity, firms like Butterfly, that is received sturdy AI revenues.
Lauren Hein:
Very good. Zeno, we will pivot to you, if that is okay. Let’s discuss breaking boundaries between the bodily and digital worlds. Augmented actuality in digital actuality. Possibly begin with some definitions there, after which let’s speak via why you suppose that is an thrilling theme for 2023.
Zeno Mercer:
Proper. So clearly, to take a step again right here, it was an enormous 12 months final 12 months when Meta rebranded Meta as a part of the metaverse. So I believe simply throw that on the market. After which considering ahead, we have augmented actuality and digital actuality. So augmented actuality could be an overlay know-how or visible display, there are a variety of various kinds of modalities this might happen, perhaps in your dashboard, contact lenses or glasses, or a headset, however primarily it is augmenting actuality. It is a digital overlay. It could possibly be audio, it could possibly be visible, however finally it is an understanding, a digital understanding of what is occurring round you and the flexibility for that to offer insights which might be custom-made to you. Digital actuality could be extra in a siloed sense of simply being in its personal digital world, so not likely having something to do with what’s round you.
And that might have many various purposes, however finally it does not require as a lot, there’s loads of processing to create these digital worlds, nevertheless it does not require actual time processing of the world round you. Proper now you are seeing in all probability one of many larger Christmas vacation reward objects could be virtuality headsets from Fb or Meta and from Microsoft. And principally for gaming proper now. And so proper now, I believe lots of people consider AR/VR as simply the proxy for a brand new type of gaming, however there’s actually much more to it.
Lauren Hein:
Do you need to take a stab at defining the metaverse?
Zeno Mercer:
Certain. I believe it is a phrase that goes manner past the simplified single phrase, metaverse, that we use. However primarily there are two completely different types of the metaverse. There may be the augmented actuality metaverse, which truly incorporates and understands the true world, that is physics, chemistry, what merchandise and objects are and the classification of these objects, and the way they work together with the world. After which there’s the pure metaverse type that perhaps Meta and Zuckerberg would think about, which is simply dwelling and interacting purely on this digital world, which I believe is frightening to some folks that we will be this matrix drone society. But when you concentrate on how we already talk and have developed this society. Individuals have been glued the TVs and PCs, cellphones, and now we have smartwatches. They’re actually simply methods of portray, speaking and sharing, and having completely different experiences, throughout completely different life phases and completely different types of leisure or studying.
So I believe should you’re wanting ahead, beginning subsequent 12 months, you are actually going to begin to see extra information bulletins of know-how that will likely be approaching board. Even not too long ago, there have been rumors going round that Apple’s engaged on glasses, augmented actuality glasses, which we might in all probability guess could be somewhat bit higher than Alphabet’s Google glasses that had been launched, at this level, over a decade in the past now. So I believe it is actually not hit folks but that in a decade from now, folks may not be carrying cell telephones anymore. We will have a special tech modality that is actually introduced in by the infrastructure and software program and many various industries colliding to create a extra seamless expertise that higher integrates into our lives. The typical grownup Google searches three to 5 instances a day. That info could possibly be extra real-time and synced to your every day life, and actually profit folks, each youngsters, and academics, in addition to the growing old inhabitants on the best way to navigate the world and get assist in real-time. So we’re actually excited in regards to the constructive advantages that may happen from the utilization and uptick of this area.
Lauren Hein:
So the tendencies report does a very nice job of laying out loads of purposes for augmented and digital actuality applied sciences. It feels somewhat bit at present perhaps we expect that it is all simply gaming, after which we think about ourselves dwelling in a very digital world sooner or later, however there’s definitely a spectrum. Do you need to discuss another purposes for this know-how which might be relevant extra at present?
Zeno Mercer:
Yeah, certain. So I believe one of many extra direct segues from gaming could be training. If you concentrate on how every individual learns, they go to a classroom, in the event that they’re fortunate, they get tutoring, in the event that they’re even luckier, they’ve entry to know-how and issues that may perceive how they be taught, what they know, the place they progress. And that is each from a testing facet and a studying facet. So I believe you will see throughout quite a few disciplines, arithmetic, physics, and historical past, there are going to be an increasing number of methods of personalizing this training to allow them to perceive how every particular person learns. This will additionally broaden via sports activities and different bodily studying reminiscent of golf or what have you ever, the place it might perceive the way you’re stroking. You have received, as we coated earlier about wearables, you will see wearables additionally apply to this augmented and digital actuality the place it might actually offer you visible and voice cues which might be automated that can assist you discover ways to do issues higher, perhaps even cooking.
So I actually like training, studying, and training. There’s additionally collaboration. Proper now we’re on this name, we’re all somewhere else, however technically we’re right here collectively proper now, and the viewers right here, even when they’re right here watching this later, they’re right here on this second. Sooner or later, this collaboration, every one in all us is perhaps a TV display or a monitor and look right into a digicam. Sooner or later, it will be even higher. You will have extra customized dashboards, extra info will likely be popping up in your display that immediate you and offer you visible cues. And so even working collectively, every individual will be capable of work in their very own type, however every individual on the opposite facet of it’s going to even have their very own distinctive angle with out impacting the others’ expertise. So this customized buyer expertise will actually enhance organizational collaboration.
After which in the true world, going again into the augmented actuality facet of issues, take into consideration simply navigating a metropolis or a brand new expertise. Possibly you pull out your cellphone and determine the best way to go on Google Maps. In actuality, you will have this augmented actuality headset. You are able to do this now with Google Maps the place you maintain up your cellphone and it might present you which of them course to go, however you are still not fingers free. And I believe that the following step is that this hands-free, seamless integration of know-how that’s designed that can assist you. Let’s hopefully keep away from the Meta world the place it is simply flooded with commercials and it is truly helpful know-how that is supplying you with the knowledge that you really want and want in real-time.
Lauren Hein:
So this specific dialog feels very particular to suppose THNQ, the AI index. You’ll be able to right me if I am incorrect on that, however are there any specific firms that you just’re actually enthusiastic about?
Zeno Mercer:
Yeah, I believe I will shortly add one other space you talked about. That is positively very AI-focused, AI is empowering the know-how to create, perceive, and implement this, the infrastructure and software facet. However there is a idea often known as digital t win, which is actually recreating, and I alluded to this, nevertheless it’s recreating the bodily world and digital world. This might even be for the human physique. So suppose healthcare. So there are many purposes already presently being developed and deployed, reminiscent of navigating surgical, the surgical area of understanding and doing pre-op, customized implants which might be made utilizing 3D era software program that matches the person. And so we’re already seeing actual affect from this, it simply hasn’t been known as essentially AR/VR, which is extra of how we might be utilizing it. So some firms that I am actually enthusiastic about that we’ve got publicity to at ROBO could be, on the infrastructure facet, none of this could be doable with out superior AI semiconductor chips.
So firms like Nvidia making AI chips. They’ve not too long ago been within the information and a part of international commerce wars about how highly effective these chips are as a result of they actually allow a quick understanding of deep studying and the way issues work. They’re quicker at crunching these numbers. They’re quicker at real-time processing, which is vital for these purposes. I believe it is also vital to notice that Nvidia is not only a {hardware} firm. In addition they have software program that they are actually diving into deeply. And for instance, they’ve not too long ago launched a 3D modeling platform, which primarily permits you to sort in textual content and it will offer you 3D mesh modeling that you might truly implement within the video games or different experiences. So we’re actually seeing huge progress within the AI area and the way it can apply to the completely different subsets of society right here. So there’s semi, the following step could be the networking and different infrastructure that goes into place, like safety.
So as an instance you’ve this AI, you’ve this augmented actuality, you’ve this. How does all of it join? How does it perceive what you are seeing? You could have sensors and real-time processing. So you’ve got received huge knowledge storage. If we’re going mainly from a textual content to picture to video to actual time 4D society within the digital, huge knowledge scalability is required and networking capabilities. So you’ve got received firms like Pure Storage and Arista Networks which might be actually highly effective performs right here. On the opposite facet, you are going to have, pc imaginative and prescient for augmented actuality. So firms like Ambarella, which we have talked about in different tendencies. I believe that is one factor to focus on actual shortly is that whereas we’re speaking about these tendencies, we attempt to discover firms which might be already highly effective and market leaders and have nice know-how, however they’re truly in a position to play into completely different mega tendencies that might see huge trillion greenback, 5 trillion greenback markets that aren’t in existence at present, actually.
I wished to briefly spotlight that. So we have now Community & Safety. On the safety facet, we even have cybersecurity. As an increasing number of of our interactions are digitized, because the companies that we work together with are automated, our id and safety are crucial. Again within the day, and I am saying this nearly facetiously, you’ll go to a financial institution in individual, there’d be a safety guard there, and perhaps there is a gold vault. Properly, now it is extra about defending your digital id to just be sure you’re the individual accessing it by yourself accord. And that all through the journey of accessing and transmitting knowledge and cash that there is not any third social gathering accessing this knowledge or manipulating it. And so the cybersecurity part with firms like CloudFlare, Gen Digital, and CrowdStrike, are crucial and can grow to be much more vital as this progresses. I believe it might even be remiss to not speak in regards to the firms which have already been constructing within the 3D area for a while.
This could be firms like Dassault, Autodesk, and Adobe, who’re mainly pioneers and leaders within the digital 3D area. However I believe I will additionally briefly discuss, I’ve talked about Meta on this name, and we truly do not maintain Meta. They’re actually a really consumer-focused promoting firm, and that is the core of their income. We might fairly maintain Microsoft as a metaverse play, and usually AI play, as a result of we consider they’re making significantly better strikes as an AI firm within the metaverse play with their partnerships with Open AI for enabling these newer applied sciences to really be within the fingers of people and shoppers in a extra constructive, impactful manner. So we’ve got Microsoft in our AI (THNQ) index. I believe that covers many of the subsectors right here, however I’ve to say that the majority of them in a roundabout way will come to play into this area in some unspecified time in the future in time.
Lauren Hein:
All proper. The final query I’ve for you, then we’ll transfer again to Jeremie and discuss reshoring. This specific part of the tendencies report does have loads of give attention to enterprise capital investing in these startups over the past 12 months or actually two years perhaps. Do you see our index constituents making acquisitions? Do you see firms truly IPOing into this area that could possibly be potential index constituents? Any form of tendencies you are looking forward to subsequent 12 months?
Zeno Mercer:
Sure. So finally across the startups on this area and metaverses, 3D imaging modeling, all of it comes down to actually AI. AI is the part that is going to provide these firms a leg up or benefit in growing and deploying these applied sciences. That is also wanting on the infrastructure performs, the connectivity to permit real-time connections between the units that we’ll be sporting, and the backend cloud infrastructure. By way of acquisitions, we’re already seeing M&A within the area throughout safety, and throughout AI. There are loads of startups which might be growing this area, however I believe folks additionally low cost, and perhaps worry on the identical time, what firms like Nvidia are able to doing. With their current 3D modeling mesh improvement they only pushed out, which in all probability simply knocked loads of startups out of the competitors by itself. So I believe it is vital to have a look at which firms even have actually defensible tech that will likely be acquired by these massive tech firms as a result of they are going to look to quickly develop and keep share because the world switches over to this new paradigm.
Lauren Hein:
Which is why market and know-how management are key in our constituents’ funding course of. All proper, Jeremie, let’s discuss reshoring. Reshoring is the ultimate of our themes that we’re for 2023. We have talked about semiconductors quite a bit right here at present, and we have truly had the CHIPS act handed in 2022. That will likely be reassuring loads of semiconductor manufacturing. However speak usually in regards to the reshoring pattern that you just see for the following 12 months.
Jeremie Capron:
Okay. Properly look, I believe one of the vital turning factors within the international macro is in regards to the finish of globalization, and actually a change in that pattern that has peaked over the past 5 years or so. And so began a number of years in the past with the industrial commerce conflict between the US and China. We had the pandemic. Now we’ve got geopolitics coming to the forefront, and so our view is that the pattern of reshoring goes to achieve traction, and there is more and more clear proof of that. So that you talked about the CHIPS Act, that is one, however a sequence of main US insurance policies enacted prior to now few months are actually pointing in the direction of that. And we expect that this pattern will create a serious tailwind for robotics and industrial automation. And it isn’t like automation wants a booster within the present atmosphere, as a result of when you concentrate on the issues we’re dealing with at present, the labor shortages, inflation, and rising prices throughout the board, the one clear reply to that from a enterprise chief’s perspective has been automating.
And so companies have began investing at a a lot quicker tempo, over the previous two years. In reality, demand for automation at present is at file highs and it is rising, and there is extra demand for robots and automation than suppliers can provide. However along with that, these macro modifications round globalization or the tip of it are going to have a vital affect. That is protectionism, deglobalization, we will name it French shoring or reshoring from China into the upper value areas in Europe. Within the US you’ve the growing old of the inhabitants, the restriction of migration, the affect of world local weather change, and cyber warfare, as Zeno simply touched on cyber safety. All of that’s actually resulting in a way more acutely aware effort to fabricate domestically. And robotics automation is the enabler of that, the enabler of aggressive manufacturing. And once more, we’re already spending unprecedented quantities on that. In reality, within the second quarter of the 12 months, robotics orders in North America had been up 25%, 12 months on 12 months, and within the first quarter, they had been up 28%. So we’re off to a really, very sturdy 12 months in 22. We predict that tendencies will proceed into the following few years.
Lauren Hein:
Main firms benefiting from that pattern? After which the following query I will ask you, are any particular industries you actually see leaning into reshoring?
Jeremie Capron:
Yeah, so the beneficiaries are a number of the normal suspects, just like the main robotics firms like Fanuc, or Yaskawa in Japan, ABB, Sweden, Switzerland. You will have KUKA, additionally one of many high gamers in industrial robots. However you even have the businesses that take part in automation management programs like Rockwell Automation right here within the US, you’ve the pc imaginative and prescient gamers like Cognex. Collaborative robots, firms like Teradyne, that owns Common Robotic. That is received the highest market share in collaborative robots that may work alongside people within the workshop. So these are a number of the apparent one, however there’s a sequence of secondary beneficiaries. You concentrate on the actuation, you concentrate on the management system, the software program layer that Zeno additionally talked about.
Lauren Hein:
Any particular industries that you just see reshoring? The pattern actually accelerates within the close to time period, clearly, it feels like mainly the whole lot could possibly be impacted, however within the close to time period, perhaps in 2023?
Jeremie Capron:
Yeah. So the obvious one to everyone seems to be semiconductors, as a result of we simply had the CHIPS Act handed, and that is earmarking 40, 50 billion {dollars} in the direction of home manufacturing of chips. And instantly following this announcement by the White Home, we have seen main bulletins for Micron and Qualcomm, and Taiwan Semiconductor, all constructing new multi-billion greenback vegetation. And so all of the infrastructure goes to assist this, is coming alongside as properly. Then we had the 2021 Infrastructure Act that is additionally allocating billions of {dollars} to high-tech infrastructure throughout the nation. There is a main push in the direction of electrical autos that we already talked about. And it is vital for buyers to know that the manufacturing of electrical autos implies much more automation than conventional vehicles. And that is due to the depth of using robotics to govern batteries, for instance, the entire electrical powertrain manufacturing requires extra robots and extra management programs. In order that’s one other main tailwind right here.
Lauren Hein:
Yeah, feels like this excessive conviction theme goes to be heavy within the ROBO Index with some crossover once more, into perhaps AI particularly.
Jeremie Capron:
Sure, I agree. ROBO has very direct publicity to all we simply talked about, from industrial automation to regulate programs, pc imaginative and prescient, actuation, however there are additionally going to be some AI parts to it. So you will discover some extent of publicity within the AI index as properly.
Lauren Hein:
Properly, I need to break as a result of I need to open up the ground to questions. Additionally, I need to remind everybody listening that if you would like to obtain common updates from us, you possibly can join our publication. However man, Jeremie, Zeno, Lisa, thanks for being right here. We will let the viewers take it from right here.
