Five key themes will shape the world in the next five years, fuelled by an unprecedented increase in the pace of technological changes, in particular the roll-out of 5G mobile technology, according to Bank of America Merrill Lynch.
The financial services giant says in its report, Transforming World – The Next 5 Years, that the “the five most influential themes that should shape our world over the next five years” are big data and artificial intelligence; the rise of electric vehicles; demographics; climate change; and privacy and cyber threats.
With the amount of data doubling every two to three years, computing power becoming every cheaper and the world becoming ever-more connected, Big Data and AI will create “vast opportunities that span multiple sectors”, the bank says. “The amount of global data stored and analysed could swell from 1% today to 37% by 2025, implying up to US$5 trillion in annual benefits.
“These trends, enabled by 5G as the bedrock platform, will hasten the rollout of next-gen technologies (autonomous vehicles, augmented reality etc),” the report adds.
BofAML says 5G will power the fourth industrial revolution, “support a ubiquitous connected world and accelerate the digitization of businesses”. By 2025, there will be more than 30bn connected devices by 2025 and “5G will be the key enabler and influencer in a transforming world”.
These changes will boost the prospects of sectors such as technology, e-commerce and payments, along with capital goods and consumer durables, while the apparel, retail and old media sectors will face significant headwinds, along with the energy industry.“We believe the world will transform at its fastest pace in human history over the next 5 years,” the bank adds, with disruption coming from products and services as diverse as blockchain, big data, medical marijuana and esports.
“The story of the next few years will be data,” the bank’s thematic investing team writes. By 2030, autonomous vehicles (AVs) could generate more data than the earth’s entire population does today. And one smart city will generate even more data than all the AVs combined. But current mobile networks cannot support this. 5G has the potential to be the platform that this data needs, making it a cornerstone of our transforming world.
Big data and AI go hand in hand, the bank believes. “Together, they are set to enable many future technologies such as autonomous cars and mass customisation of products,” helped by drivers such as the internet of things, the growth of on-demand services, cloud computing, e-commerce and virtual/augmented reality. However, they are also likely to lead to an increase in inequality.
And as the number of IoT devices rises from 7 billion today to an estimated 21.5 billion in 2025, and the growth in smartphones, tablets and other devices continues, the world will become more connected, enabled by 5G. This “will bring substantial benefits as well as inherent risks”, the report says.
Material cyber and privacy risks will come from major vulnerabilities in IoT devices (there has been a 600% increase in IoT attacks in just one year); the rise of voice technology (half of all searches to be by voice by 2020); the introduction of surveillance into homes (one in five US homes have smart speakers); and the increasing number of computers communicating between themselves.
The cost of cybercrime is set to grow to around $6 trillion by 2021, compared to 3 trillion in 2015, according to Cybersecurity Ventures as more people come online, attack threats become more sophisticated and online is integrated further into people’s lives and daily activities. “Cybersecurity will play a vital role in protecting the global digital economy, with companies likely to face greater risk and compliance costs (breaches, regulation),” the bank says.
The shift from the internal combustion engine to electric vehicles will have effects far beyond the automotive sector to fields such as oil, utilities, mining, software and capital goods. BofAML says that by 2025, a fifth of cars sold globally will be EVs, and by 2030 EVs will account for 42% of sales. But at the same time, the sector will also be affected by the rise of ride-hailing, car-sharing, vehicle autonomy and multi-modal travel. This will lead to, for example, changes in real estate as space is freed up by the demise of filling stations and car parks.
Demographics will shape markets in the next few years thanks to the ageing population, the rise of millennials, Generation Z starting to enter the workforce, and the shift of billions of emerging market consumers into the global middle class.
“The rise of the ‘Bottom Billions’ is driving incremental demand for consumer durables & services, travel & tourism, entertainment, health, education, and transport,” the report states.
At the same time, the idea of ‘peak ownership’ and new tech-driven Sharing Economy models will transform and disrupt the status quo for consumer-oriented companies, it adds.
With the evidence that climate change is happening and starting to have severe impacts, the global energy transition towards renewables and energy efficiency is in full swing, as technology improvements have brought costs down.
Over the next five years, renewables will reach grid parity with, or become cheaper than, fossil fuels in most of the world. Other drivers away from fossil fuels including higher carbon prices in Europe, improvements in energy storage, stricter government policies and a shift in corporate cultures towards sustainability.
source : https://www.forbes.com/sites/mikescott/2018/10/29/5g-technology-set-to-fuel-technological-change-and-transform-global-economy/#16773b5c2f51