Riding the Sixth Wave
A new era of technological advances will power the economy until 2045. When it's over, will you look back with delight or regret?
The first year of the 2020s just ended. 2020 was a turning point for all of us in more than one way. Sure, what first comes to mind is the Covid pandemic that is still ongoing. But 2020 was also a turning point in a positive, opportunity-generating way.
We've just started a new long cycle of cutting-edge technological development: the Sixth Wave. For the next 25 years, a few innovative, leading-edge technologies will power the economic prosperity of countries, companies and individuals alike. What does this all mean for you?
Close your eyes and go back in time 30 years ago. What did your daily life look back in 1990? What were you doing? How did you spend your day? What gadgets and tools were you using? Did you own a smartphone? Were you already surfing the internet? (Surely not, as it only went live one year later.)
Clearly, life was very different in 1990 compared to how we work and live today.
In the business world of 1990, the top 10 companies with the highest market capitalisation in the Fortune 500 included three automakers (GM, Ford and Chrysler), three oil companies (Exxon, Mobil, and Texaco), two "tech companies" (IBM and General Electric), and one chemical (Dupont) and tobacco company (Altria, formerly known as Philip Morris).
Apple was 96th in the Fortune 500 back then. But what about Google? Amazon? Facebook? None of these modern tech giants existed.
Have you wondered why I asked you to go back in time precisely to 1990? It was the start of the Fifth Wave of technological development. During the past three decades, information and communication technology (ICT), the internet, and later social networks were the engines that powered dynamic economic growth.
The leading companies in the industry niches that drove these technologies quickly rose to prominence and, over time, gained high market capitalisation. Little wonder that in 2020, the "Big 5" US tech companies (Microsoft, Apple, Amazon, Alphabet [the parent of Google], and Facebook) are ranked 1-5 in the S&P list of US companies.
THE NEXT 25 YEARS
Now let's do the opposite of what we just did. Let's think ahead into the future. In the coming 25 years, a new set of leading-edge technologies will emerge to drive the economic performance of countries and give rise to entirely new and shifting industries. In the Sixth Wave, we are likely to see strong economic growth along three innovative technological growth paths:
- "Digital tech" will extend the Fifth Wave technologies of ICT, the internet and digital networks. But as we advance, we will witness the digital transformation of business and our lives through new technologies such as artificial intelligence (AI) and big data analytics, the Internet of Things, and autonomous vehicles, robots and drones.
- "Human tech" includes already longer-established technologies such as biotechnology or genomics, and also makes use of digital technologies to enhance and amplify the human body to increase our strength and mobility, improve our well-being, and possibly lengthen our lifespan.
- "Cleantech" covers all the clean and green technologies that address the critical challenges of humanity, such as climate change and sustainability. Cleantech will create radically new technological solutions and business models for cleaner energy, a cleaner environment, and maybe even cleaner food and consumption patterns.
Together, these three new directions will create new industries (while transforming old ones) that will propel sustainable economic growth in the next 25 years. The Sixth Wave will lead to drastic increases in productivity and create new job and investment opportunities.
We will also see the emergence of new ventures that will rise to the top of the Fortune 500 in 2045 to become the Google, Amazon and Facebook equivalents of their age.
RISK AND REWARD
In 1990, and the early Fifth Wave years that followed, a few courageous angel investors and venture capital firms made bold investments in unknown tech startups that promised to seize the potentially tremendous value creation opportunities offered by ICT and the new phenomenon called the internet.
Likewise, a few bold creative talents decided to forgo a "safe" corporate career in favour of starting or joining a new venture. Truth be told, some of these high-risk investors lost money when the dot-com bubble burst in 2000, just as some of the brave talents had to start anew after their venture collapsed.
However, many startup investors, co-founders and early-stage employees hit the jackpot and became multimillionaires after their tech ventures staged successful initial public offerings.
In the coming years, the new Amazons, Googles and Facebooks of the Sixth Wave will be approaching investors for funding, wooing top talents to join their founding teams, and asking young talents to work for a low salary and the promise of a massive upside in the new ventures.
So how do you intend to respond to the Sixth Wave in its critical foundational years? As a passive spectator? Or do you want to get actively involved and ride the Sixth Wave?
Dr Detlef Reis is the founding director and chief ideator of Thinkergy, the "Know how to Wow" Innovation Company in Asia and beyond. He is also an assistant professor at the Institute for Knowledge & Innovation -- Southeast Asia at Bangkok University, and an adjunct associate professor at the Hong Kong Baptist University.