Thoughts on the most important investment and technology trends over the next few decades:

Gavin Baker

I originally posted this on Quora and thought would cross publish here with a few edits. The future is ever uncertain, but over the next 20ish to 40ish years I am most intrigued by:

  • Synthetic biology and gene editing. Synthetic biology, simply stated, is making DNA programmable and creating fundamentally new biological systems. This is going to be one of the biggest changes in history. So many articles have already been written about Jurassic Park becoming reality, but I suspect we won’t stop there. Gene editing is progressing at a similar pace — Chinese scientists have already increased the IQ of both monkeys and human children (deliberately in the case of the monkeys, accidentally in the case of the human children where the scientists were trying to engineer for disease resistance). Interestingly, there has been slower progress over the last 3 years on developing drugs with gene editing than I would have expected. Obviously there are many dystopian scenarios where humanity fragments into the haves and have nots along the lines of the movies “Gattaca” and “Elysium,” especially given the intersection of gene editing, AI and brain/computer interfaces but I am optimistic that we will avoid this.
  • Brain/Computer interfaces, AI and Ambient Computing. Progress across multiple domains of brain/computer interfaces is incredible — a Nature paper just showed that it is possible to synthesize speech from neural signals. And blind people can see through cameras, people can control prosthetic limbs with their minds and people can move on screen cursors with their minds — all of this has happened in the last few years. I believe that over the next 20 years smartphones are going to become “edge servers” that power personal AI’s for all of us with the ability to seamlessly move from AR to VR experiences without any need for glasses. For readers of Iain Banks, I do think we will have a primitive version of neural lace in my lifetime. As an aside, I would absolutely try out for Special Circumstances although almost certainly wouldn’t make the cut.
  • The potential for a videogame like Fortnite to emerge as a Virtual Reality platform. EPIC Games CEO Tim Sweeney is focused on making Fortnite into a real life version of the Metaverse from Neal Stephenson’s “Snow Crash,” or the Oasis from Ernest Cline’s “Ready Player One.” The facts that 1) 40m people watched the Marshmello concert in Fortnite and 2) that so many players use Fortnite as a place to spend time with their friends with the game itself being secondary have significantly increased the probability of this future state actually occurring. In a recent interview, Sweeney said that he wanted to “ubiquitize the creation of digital humans” and I am fascinated to see how the emergent platform characteristics of Fortnite interact with the growing trend towards virtual personalities like “Lil Miquela” on Instagram. The lines between real and digital worlds will become increasingly blurry over time — virtual personalities from VR worlds will be superimposed on the real world via AR. So many companies are focused on VR at the engine/OS level and I think the odds are that the abstraction layer moves up a level to a videogame itself rather than being a game engine or operating system. And of course, platforms generally come out of abstraction layers. Augmented reality is also of high importance — Google Translate is a semi-magical experience today — but AR seems likely to be dominated by Google and Apple relative to VR where there is much more uncertainty.
  • Autonomous transportation. I think that it will be illegal for humans to drive cars, pilot planes and pilot boats outside of designated recreational zones in much of the world by the year 2050. There are 1m deaths per year from auto accidents and this should asymptote to zero. Autonomous driving in particular is moving into the “trough of disillusionment” on the Gartner hype cycle, but the progress over the last 5 years is really astonishing. Reminds me of Bill Gates’ statement that we often overestimate what is possible over the next few years but underestimate what is possible over the next 10 years. The widespread adoption of the automobile in the early 20th century created immense wealth in retail and real estate over the next 50 years and I suspect autonomy will also create — and shift — wealth in the real estate and retail (broadly defined) sectors more so than in the technology sector itself. There has been a massive increase in the value of urban relative to suburban real estate over the last 30 years. I wonder if autonomous vehicles which make long commutes painless will create a shift in consumer preferences — and value — back to suburban real estate. And obviously parking lots are going to decline in value.
  • Solar power, energy storage and a future free of all fossil fuels. The steady high single digit annual improvements in photovoltaic cell efficiency combined with a 1–2% slower annual increase in battery cell efficiency are likely to result in the elimination of all fossil fuels for everything except escaping the earth’s gravity well. Suspect this will happen by 2060 although there is a really wide confidence interval here due to the fact that as fossil fuel demand declines, production will increasingly be concentrated in the lowest cost regions, which makes the interaction between the ever declining cost of solar power, electricity storage and the declining cost of fossil fuels very difficult to forecast. Either way, this is going to be truly awesome for both humanity and the planet.
  • Cryptocurrencies. The best innovation generally happens when everyone has given up on a new technology — i.e. the internet after the 2000 tech bubble burst. I am super ignorant on crypto but am really curious to see what Facebook launches in this space. The existing payments system is really good, but anything can be improved and crypto solutions for cloud computing and identity are interesting. Given that so many have given up, I am trying to learn more here.
  • Optical and quantum computing. Moore’s law and Dennard scaling are slowing down, but at the same time there has been real progress in both optical (or photonic) and quantum computing over the last 3 years in particular. We are headed towards a hybrid world where OPUs (optical processing units) and QPUs (Quantum processing units) work in concert with traditional semiconductor technologies. Success with optical and quantum computing is absolutely essential to continued technological progress in every domain. IBM makes the most noise in quantum computing, but my sense is that Rigetti and Google are the furthest along with no clear leader yet to emerge in optical computing.
  • Infrastructure software. This is more of a near term trend, but as venture funding flowed to every possible application SaaS category — generally down to the 10th competitor — really valuable infrastructure software companies were being created. Confluent, MongoDB, Redis, etc. Has been fun to turn the infrastructure software part of my brain back on over the last 18 months after largely — and incorrectly — ignoring the space since I first attended the AWS Reinvent conference in 2012. I don’t think there is any hope for legacy vendors outside of Microsoft, but incredible new solutions have been created to address the needs of modern apps and I’m embarrassed that I missed this. Better late than never!
  • Devsumer/low code/no code software. Millions of recent college graduates have elementary coding skills and are increasingly frustrated by the lack of programmability in most application software. Smartsheet, Airtable and other software companies are beginning to fill this gap.

Some of these trends seem closer to science fiction than reality, but much of the foundational, enabling technology has already been invented, if not yet commercialized. I often think of Matt Cohler’s statement that “It’s not my job to predict the future, it’s to notice the present first.” And as an investor, these trends will begin to impact equities long before they are well understood. Lateral thinking will be critical — there are always second and third order effects — some are obvious as in the case of autonomous, but the ones that are less obvious will be incredibly valuable insights.

*interesting to compare the reach and distribution of different platforms — am going to experiment with putting this story behind Medium’s soft paywall.

Gavin Baker

Written by

Gavin S. Baker lives in Boston. CIO, Atreides Management. Former portfolio manager, Fidelity OTC fund. No investment advice, views are all my own.

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