Citi is out with its list of disruptive technologies for 2014.
It’s a brand new list from the one did they did last year.
And it’s really good. Check it out:
Description: The movement is spearheaded by a guy named Skylar Tibbits, a researcher in MIT’s architecture department. The idea is this: You used 3-D printers to print out smart materials that can shape or assemble themselves. The concept is still in its infancy, but Citi says this could help individuals build stuff in extreme conditions, or allow medical devices to construct themselves once they’re implanted.
“Utilising a 3D printer to build the object layer by layer, intelligence can be imprinted directly into the actual structure [via more rigid or flexible materials] dictating the transformation and the eventual shape of the object.”
Insane stat: The US Army recently contributed $US855K, split between Harvard, University of Illinois and University of Pittsburgh to help advance projects focused on 4D printing.
Relevant graphic: Watch THIS!
Description: Citi says that, though it remains at an early stage, mobile banking is going to take off around the world. They forecast an 86% compound annual growth rate to $US447 billion from $US69 billion in 2016. Although the largest volumes will be in developed markets, the greatest opportunities for new entrants lie in emerging markets thanks to the relative lack of established financial institutions.
Meanwhile, more and more banking services will become automated, resulting in savings costs.
Insane stat: Norway, Finland and Sweden operate at branch per population densities 2x or more below developed market peers.
Relevant graphic: Cash intensity by country
Has Bitcoin finally made it? Citi’s Steven Englander, who’s written about the cryptocurrency in the past, gives a basic introduction and talks up the potential of the block chain (both Bitcoin’s and the concept in general). He poses the technology’s potential thusly: “Bitcoin advocates who benefit from Bitcoin appreciation argue strongly for its role as an asset, but the transactions technology is generic and efficient and less complicated than introducing an intermediate currency (Bitcoin) to facilitate USD to USD or USD to EUR transactions.”
Insane stat: As of April 2014, Bitcoinpulse counted 29,000 merchants accepting Bitcoin.
Relevant graphic: Price vs. transaction volume
Description: There’s nothing new here per se but Citi says growth will start accelerating. The main outcome of this will be more user data. “…The digital market uses and generates massive amounts of data and it is this data that differentiates digital marketing from traditional offline marketing. The result is a highly personalised experience for a consumer across all channels in an experience that the prospective or current customer appreciates and they in turn encourage through greater access to their personal data.”
Insane stat: Real-time-bidding-based digital ad spending will see a 66% compound annual growth rate into 2016. (Real-time bidding means the ad buying and placement process is automatic.)
Relevant graphic: the return to publishers from ads is not what it used to be
Description: Citi’s interesting suggestion, from analyst Itay Michaeli, for wider market goes like this: “The consumer purchases a new EV at a much lower price ($11-13k depending on size/ cost) and does so worry free of any residual value risk tied to future battery technology advancements. The operator would own the batteries, bill customers and operate battery switching stations that allow consumers to quickly (and robotically) switch batteries when desired or when taking very long drives.”
Insane stat: Tesla plans to offer a Gen-3 model priced at $US35,000. “A $US35k price point is historically what’s required to begin the path towards achieving sizeable volume of over 100k units (typically 2-3 years after launch), in theory enough to crown Tesla as the 1st mover in the affordable pure EV market.”
Relevant graphic: This cost comparison table
Here is the clearest justification for energy storage we’ve yet seen, from Citi’s Jason Channell: Solar generates its electricity when most households are empty, or have limited demand. Saving that electricity for later would dramatically offset consumption prices. He continues: “The potentially greater value is in terms of avoided capacity payments, and the grid stability which storage could provide. If storage could be combined with smart metering and demand response, we could conceivably move to a situation where load is managed (i.e., by dishwashers etc. being turned on automatically when demand was lowest and vice versa) and supply is being managed by storage. This could significantly reduce the amount of stranded capacity and hence wasted cost on an electricity system, as well as improve its reliability.
Insane stat: In the first quarter of 2014, solar and wind combined generated 28% of German electricity.
Relevant graphic: Here is the breakdown of the potential market size for different storage technologies
Immunotherapy involves training the immune system to both better recognise cancer cells, and attack them so that cancer becomes nothing more than a chronic condition. From Citi’s Andrew Baum: “While existing chemotherapy or even newer oral drugs have a powerful initial effect on tumour shrinkage (the so called “response rate”), the durability of these responses are typically very short, after which the tumour begins to grow again and starts to spread (metastasize). In contrast, the durability of responses with immunotherapy can last a decade or longer, due to the induction of an ongoing immunological memory, targeting cancer cells for an indeterminate length of time and making it a potential tool to transform a significant percentage of cancers into something akin to a chronic disease.”
Insane stat: Two-thirds of Western cancer incidence could be successfully treated with immunotherapy.
Relevant graphic: Here’s how many more people immunotherapy will keep alive
Description: Insurance securitization represents a threat to reinsurance, which is how insurers currently pool their own risk. Instead of having to dump all that risk into one or two firms, insurance securitization would allow an insurer to spread their risk across capital markets in the form of securitized bundles.
Insane stat: Reinsurers had to cut their prices 15% in response to securitizers.
Relevant graphic: Most insurance-linked securities are focus on property policies, like hurricane insurance. But some tried to get smart and sell life insurance policies into the capital markets. After the financial crisis, they wised up:
Description: Citi bundles a bunch of different technologies into this category. They include: yield mapping, soil sampling and mapping, hyper-local weather detectors, a farming machine Internet, and big data. “Unless there is a major divergence from historical trends, new land will not be nearly enough to meet [global food demand]. Farm productivity needs to take another step higher, and we think Precision Agriculture will be an important avenue to achieve these productivity gains.”
Insane stat: The average age of a U.S. farmer is 57.
Relevant graphic: Here’s how much more food Citi says we’re gonna need in coming decades
Description: The world leader? China — thanks to “the up-trend of wages (albeit from relatively low levels), the peaking out of the working population, the high level of job-hopping and the general trend of Chinese workers not wanting low-paid manual assembly, picking, inspecting or packaging jobs in factories.”
Insane stat: U.S. manufacturing comprises just 12% of GDP, meaning that in that sector at least, there may not be that many more replaceable workers.
Relevant graphic: The CAGR for global volumes is ~8.5%
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