Big decisions to be made while technological progress takes place

The future of tech

At the beginning of 2007, Steve Jobs introduced the iPhone to the world. Smartphones already existed, but Apple raised the bar in terms of functionality and design. The incredible growth in smartphone usage since has led to the near disappearance of the camera and the ubiquity of the selfie. But the real changes are happening within the device. Newer iPhones have over 100,000 times the processing power of the computers that put a man on the moon in 1969. This is an example of the incredible technological advances which have been accelerating since the beginning of the 20th century. For those with an understanding of the technology, such progress was not a surprise. In 1965 Gordon Moore, now chairman emeritus of Intel, predicted stunning levels of growth in processing capacity. Ten years later, his original prediction was updated and encapsulated in Moore’s Law. This anticipated that the number of transistors in a dense integrated circuit would roughly double every two years. This still holds true, despite the physical limitations of the silicon chip.

Just getting started

But things are changing. Quantum computing is likely to be a game-changer in the 21st century. Quantum computers will process highly complex operations at speeds exponentially higher than conventional computers while consuming much less energy. Hartmut Neven, the head of Google’s Quantum AI labs says that we’ll need a new law once quantum computing gets going. It wasn’t long ago that the physical realisation of quantum computing seemed impossible. But now research suggests that it is way more than a theory and is something that will be realised in some form within the current decade. The question is how we can profit from this as traders? Well one way is to look at the companies already heavily involved in quantum computing. Unfortunately, many of these will be small, specialised organisations in private hands, or even research groups at universities. But it may be possible to get some exposure through larger conglomerates, although this means having exposure to a lot more than quantum computing.

Small is beautiful

If this approach to capitalising on technological change sounds a little bit unadventurous, why not look around and find out who’s active in related areas? Why not try to find those smaller companies that provide vital components needed in the machines using the technology? These will be much riskier prospects than, say, some of the big tech giants and some of these smaller outfits will fail to fulfil their promised potential. But others will have products which prove invaluable to future tech development, making them sought after by investors, and the tech giants themselves.

Problems with tech

The trouble with our ever-growing reliance on technology is that we must give up a lot of our personal data to take advantage of it. Perhaps the greatest concern comes from connectivity that’s linked to the growth in facial recognition technology which has serious implications when it comes to personal privacy. This is well underway in China where facial recognition systems are common in railway stations, airports, schools, and shopping centres. Facial recognition is key to China’s planned Social Credit System which many observers believe will be used not just to monitor, but also control its citizens. Although the Social Credit System is some way from being fully implemented, China has already brought in a rule which requires all mobile phone users registering new SIM cards to submit to facial recognition scans. The authorities say the move is designed to prevent the resale of SIM cards to help combat fraud. But some observers believe it may also be used to help the police and other officials keep track of the population. This drive to integrate technology to monitor private citizens is well underway in China, and it has taken a great leap forward due to the coronavirus pandemic and the authorities moves to track its citizens. But it is unlikely to be limited to the Middle Kingdom. Expect it to turn up in all manner of theocracies, autocracies and even ‘liberal democracies’ over the coming years. Now there’s a growth industry.

Pluses and minuses

Most generations can say that they live in extraordinary times, and certainly that’s true for all of us today. We are surrounded by exceptional and exciting technological advancements which are changing the way we live and the quality of our lives. It’s quite possible that there is work going on now which could see our concerns over the environment and our demand for cheap and clean energy solved by developments in hydrogen cells and nuclear fusion. Likewise, we’re seeing changes in how we communicate and how we travel. Lifespans could increase further, and most importantly, the quality of those lives could be improved beyond anything we can imagine today. But we’re not there yet. Rather, we’re at a point where the choices we make now will have huge implications for our lives in the future. For a start, there are genuine fears that many of us could lose our livelihoods through automation. According to a study from Oxford Economics, approximately 20 million manufacturing jobs around the globe could be taken over by robots by the year 2030, with 14 million robots put to work in China alone. What will that mean for our children and grandchildren? There will be other work that needs to be done, but what about learning the complex skill sets required for it? At the same time, the ethical considerations around our data, and around medical applications such as gene therapy need to be addressed. Legislation to protect individuals will require constant updating as the technology underpinning our lives is constantly developing.

Push-back

There’s already some evidence that attitudes are changing. Once regarded as innovators and agents of progress, Meta Platforms (formerly Facebook), Apple, Amazon, and Alphabet are increasingly viewed as ruthless monopolists that manipulate politicians and exploit consumers. These companies have been the driving force of the US economy and stock market for the past decade. Yet they now face political challenges to their business models which could result in taxation, regulation, or even corporate break-up. So, there are big decisions to be made while technological progress takes place. Nothing goes forward in a straight line. But overall, technological advances will continue to make the world a better place.

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