Innovation should displace industry incumbents, increase efficiencies, and gain majority market share. While we believe the threat to existing businesses is grave, the long-term opportunities for companies and investors participating in this change could be measured in the trillions.
In the late nineteenth century, three innovation platforms evolved at the same time and changed the way the world worked. Thanks to the introduction of the telephone, automobile, and electricity, the world’s productivity exploded as costs dropped, unleashing demand across sectors.
Today, we believe the global economy is undergoing the largest technological transformation in history thanks to five innovation platforms evolving at the same time.
Experience dramatic cost declines and unleash waves of incremental demand. When a technology crosses certain cost or performance thresholds, its addressable market can widen and diversify dramatically. ARK uses Wright’s Law to better understand the potential scope of a transformative technology.
Cut across sectors and geographies. A technology that cuts across industries and geographies can enjoy dramatic increases in addressable markets as applications are discovered by different business sectors. It also insulates against business cycle risk and garners attention from multiple disciplines.
Serve as a platform for additional innovations. A technology upon which other innovations can be built may expand its use cases in ways almost impossible to imagine. These platforms may be underestimated because forecasting their impact requires anticipating entirely new products and services.
Artificial Intelligence:
We believe that artificial intelligence (AI) learning systems will transform not only retail, media, and
telecom, as did the Internet, but all sectors in the economy—even those previously thought impervious to disruption,
notably health care and financial services.
Underlying technologies include: Neural Networks, Mobile Connected Devices, Cloud Computing, Streaming, and the Internet of Things.
