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In this article I explore the big trends that I see unfolding and offer a narrative and what I think is happening, and how I see the development of each trend. Most of them are skewed towards technology but this isn’t really a surprise as most innovation is closely associated with technological advancement. I could offer some comments on where I think society is heading but that strays too far into politics than I’d like to discuss.

Estimating timescales isn’t an easy thing too, far too non-linear to be properly predictable.

 

 

Social Media

Not much that I want to say on this, it is quite an obvious trend that everyone has seen explode from almost nothing almost in the early noughties to being the all-dominant force that people love and  hate. Social media is here to stay and if anything will become the (almost) sole platform for content delivery.

 

Augmented Reality

Leading on from social media (and smart phones which I’m not intending to mention here) is the advent of augmented reality. I see a bright future for products such as Google Glass and it is pretty clear to me that there will be integration with Google Glass, smart phones, the internet and social media. It seems like the obvious mix of technology that’s needed for augmented reality to work.

Virtual reality is one of those bits of technology that never really took off. I recall playing a game on one back in the early 90s. I thought it was the coolest thing back then but in reality the technology was not a trend but only virtual (parum chh). With the newly release Oculus Rift I’m at least a little bit more upbeat since the graphics have improved massively, but I don’t think this trend has taken off yet. By take off I don’t mean like Social Media but more like Electric cars. A few more years and VR may fly but I think AR is a more likely candidate for being a huge mass-market trend.

 

Electric Vehicles

EV is still in the early adopter phase but this trend is an obvious one (yep, I’m biased). I remember being a kid and asking why electric cars hadn’t taken off and the response was that the technology wasn’t good enough, and that it would never be good enough. Naming and shaming aside, I felt that EV must have some sort of future. Of course being a kid meant that I had no data or real idea what I was talking about, only a hunch based upon a few pictures and a bit of text in a book about cars.

At the moment EV are still considered to be the (very) early adopter stage, less than 2.5% of the total vehicle market so really it is pre-early adopter. Range is a “problem” as most EV don’t have batteries with high enough power density to do the long trips that we do every once in awhile, but in reality 90% of daily commutes are sub-40 miles: EV are fine.

Further comments: utility companies must welcome this move as it is more money into their pockets. Supercapacitors need further development, recently an academic team showed one that had a comparable power density to a Lead acid battery. Capacitors are cool because: incredibly rapid charging time and have an incredible lifespan, both are which are concerns for EV.

 

3D Printing

My opinion of 3D printing is that it will play an important part in the coming advancements of industry but it will probably be less accepted by mass consumers than electric vehicles. Printers at the moment are delicate pieces of technology that are prone to breaking and throwing up problems of compatible; somehow I don’t expect 3D printers to be any less prone to breaking. Cost has been one of the most prohibitive factors for a device which is mostly a luxury (unless you are a manufacturer). I’m expecting the prices to fall and a massive uptake of the devices by mass consumers, eventually they will be a common item in Walmart or Costco. That said it is hard to see exactly what they will be providing the consumer with that they can’t already buy (for cheaper). Thinking big: regular consumer items can be purchased like an app and the schematic downloaded and then printed at home. This would save the hassle of going to the local DIY store to buy that Venus di Milo statue for the garden you always wanted.

 

Internet of Things / Worldwide Grid

(I will also include cloud computing in there too as I think it fits with similar reasoning)

Currently in the beginning of the beginning. The idea is mostly at the concept stage. That said, there are devices which can be accessed remotely across the net: such as a home security system being checked from a smart phone. That is only one example and a primitive one at that. The future will see a far wider selection of items that we can monitor and control from our phones remotely. For example, a fridge that allows temperature to be changed using an app, or it may make a request for firmware to be (auto?) updated. It isn’t normal for a fridge to be automatically connected to the internet but soon it will be. The most primitive fridge will need a connection to the internet (perhaps a small wifi receiver, doesn’t need huge bandwidth) in order to provide remote control.

Naturally the cooker will need to be synced up to the calendar such that it know to turn on 20 minutes before you get home and be ready for cooking dinner. This is only the beginning of the beginning.

 

Cyber security

A trendy topic in the media with copious references to hackers and government sponsored hacking. It may be the new buzz phrase for generic bogeyman in the media. Part of this is based on truth at least, computer security is important and as more people have access to computers (globally) and more devices connect to the internet then there is a great need for protection. Connections need to be secure and data needs to be protected.

The idea of hacking might sound cool, but the idea of protecting computers from the hacking doesn’t really sound that cool at all. That is my opinion of why the concept of encryption is likely to only be appealing to geeks, and so the trend of cyber security while it is set to grow is less likely to see the same mass market appeal that electric vehicles do. Yes, the mass market will use it but they won’t be aware of it: e.g. an SSL connection to emails or to Amazon, few people really think about it.

There is already an industry to service cyber security but it is only fledgling to what will be needed in the future. Companies can play on the fear of clients in order to motivate sales: not entirely ethical but, also, not entirely a false motivation.

 

Cryptocurrencies

This is a more contentious topic than the previous ones. I think this is only the beginning of the cryptocurrency “revolution”. Bitcoin (BTC) is the first such currency and has already become popular with wide use. Not everyone accepts it, there are many who think the idea is simply a pump and dump scheme with a highly limited lifespan. Why don’t I believe this to be the case? Functionality.

The concept of such a currency will always be appeal to some, in a similar way that gold is. It isn’t the be all, end all, item that some may appear to suggest but neither is it a pump and dump scheme. Yes, Bitcoin may eventually fail but the concept of cryptocurrencies will not. The function provided by such currencies is currently not in the domain of regular currencies. To understand this may require a little understanding of cyber security, namely encryption and message handling. Once you understand those topics and their necessary functionality then you will appreciate the functionality of Bitcoin. Until then best to keep quiet on topics which you don’t understand.

I’m entirely aware of the wild economic claims by some Bitcoiners, but then I look at everyone else making economic predictions and point to the common flaw: all too human.

Will price rise again? I would not guarantee it. When I wrote my first article on Bitcoin the price was $13, momentarily it spiked up to over $200 and at the time of writing it is crica $98. It should be noted that there is no official price. However, it is worth remembering the follow quotation: “Price is what you pay, value is what you get.” While I won’t dispute the value I am less certain on the price. It may rise again and it may even be worth betting that way but for long and how far I don’t think I have any real gauge of that. If cryptocurrencies are of interest then I’d suggest also having a look at Litecoin (LTC), which is the silver to Bitcoin’s gold. I can see more reasons for LTC rising than I do BTC.

 

Bonds to equities

The Great Rotation will happen but let’s not expect the largest market in the world to turn on a sixpence. I’ve seen a great number of articles questioning and denying the Great Rotation but I think they will ultimately prove wrong. I’ve also seen some comments on Twitter from people that study market who are also unconvinced of the Great Rotation, but one thing seems clear to me: bond yields are far too low to be attractive. Why buy a bond with a yield that is less than inflation? Such -1% is better than -3% (or whatever), plus the notion of buying an uptrending market is a favourite of traders but that can’t continue indefinitely: prices have to fall and yields have to rise. I mentioned this in a previous article and it certainly looks like the bond market might be unravelling but that doesn’t mean that prices won't spike upwards again before we see capitulation. Markets don’t tend to go straight down.

Falling bonds don’t instantly necessitate an increase in equities, no, but ultimately if we want a return on an investment then we have to look at the assets available. In a low yield environment then cash plays will rely on changes in exchange rates rather than high yields. Certain currencies may boom as bonds decline but this is, for me, just a part of the transmission of wealth from bonds ultimately into equities. Why the latter? They pay a yield and prices will ultimately rise due to inflation (by design of monetary policies). Caveat: equities may crash when bonds fall out of bed but I expect them to rebound quicker and stronger with the potential start of a new bull market. Let’s see.

 

Economic growth in East Asia / Africa

I can’t see great economic growth coming from the West, but it is entirely feasible to see it coming from the East and most greatly from Africa. Primarily due to the fact that it is easier to grow a small base to a larger one at a greater rate than trying to grow a large base into a larger one. That’s not to say that the West will experience zero prosperity but rather I fear it may be stunted. Yes, there is still great innovation in the West but I suspect that it will move East in the coming decades. That is a guess with only moderate conviction, what I am more convinced of is a growing “middle/consumer class” in China and India which I think begats economic activity (although not necessarily innovation).

It seems to me that Africa is further beyond on the development scale so it won’t see the same ballooning of the “middle classes”, it must first go through a phase of industrialization as China and India did in the previous two decades. India still has a lot further to go in terms of catching up to China too, and it seems that Africa (on aggregate, with a few obvious exceptions) is behind India.

 

Crowdfunding

Both for private projects and possibly for public projects too. Private includes charity and commercial, while public I'm wondering whether a crowdfunding / organization type program could replace centralized tax spending.

 

Some things that aren't but might...

There are many ideas out there that may make it big but people such as myself may never see them coming. Great ideas tend to be about luck more than anything. That said, there are also many great ideas that never quite seem to make it and also seem to take an impossibly long time to get anywhere. Ideas that spring to mind as Artificial Intelligence and Quantum Computing. Perhaps one day, but not today.