After Social Networks – What’s the Next Big Thing?
I think these kinds of developments are just what the world needs at the moment, technological advancements, new products and emerging industries, some impetus to move the world forward. If I was to bet I’d say the energy industry and field of medicine look promising in terms of breakthroughs this decade, but developments in the consumer arena would be helpful. In terms of improvements to quality of life, Social Media has been the only meaningful development to be adopted by most ordinary people since 2006 – there’s huge untapped potential in existing technologies.
The difficulty is though, funding emerging industries as an investor tends to be an act of kindness towards society. The airline industry (everything from making the planes to offering passenger flights) was extremely popular as an investment category, the “Air Age” they were calling it. We all massively benefited from the quality of life improvements – but aircraft manufacture and airline services cost investors billions without returning good profits. The same with car manufacture, and as recently as 2000 in the internet/telecoms bubble.
Finding the right company that will make a commercial success of it is difficult from an investment standpoint. Firstly because the stocks might quickly become overpriced for growth, but also naturally it might take thousands of companies spending shareholder funds to make breakthroughs in the industry – the “success story” company might not have even been founded yet. On the plus side the technology doesn’t seem very capital intensive, but does this open the industry to further competition around the world?
The way to invest intelligently is to look beyond the numbers – stock price rises or falls or earnings per share only give you a short-term to medium term horizon at the most. Too often investors are stuck to the ‘glamourous’ industries like high teach or financial services but they forget that what builds an economy the most is the manufacturing industry and by that I mean advanced robotic manufacturing with the latest high-tech equipment and process control. So when looking at stocks ask yourself: is the company injecting investment in new product research and development, advanced capital machines and improved processes? is a particular company investing in workforce development? Does the company have a working relationship with the with the local community or technical college for technical skills training?