As we transfer into 2023 and past, we anticipate to see main technological traits proceed to shift the way in which we expertise and work together with the world. The digitization of the financial system is continuing at a brisk tempo, and enterprise leaders around the globe are actually taking full benefit of the more and more broad set of automation applied sciences obtainable, from improvements in software program and the cloud to developments in robotics and machine studying. 

We imagine these traits will present funding alternatives associated to 5 key themes, every a possible secular beneficiary, that will assist buyers make the most of cyclical market weaknesses.

High 5 Know-how Developments for Traders to Watch in 2023:

Liquid Biopsy Will Allow Early-Stage Most cancers Detection	Autonomy Will Redefine Mobility	Now Coming into a World of Related-Care	AR/VR Will Break Obstacles Between the Bodily & Digital Worlds	Reshoring Will Drive an Automation Revolution

ROBO International at present gives three modern index portfolios to permit buyers to capitalize on these 2023 expertise traits, together with our Robotics & Automation Index (ROBO), Healthcare Know-how & Innovation Index (HTEC), and Synthetic Intelligence Index (THNQ). To study extra, go to our web site at www.roboglobal.com.

Webinar Transcript:

Lauren Hein:

Hello all people. Thanks for becoming a member of us this morning for our Disruptive Developments to Watch in 2023 dialog. I am Lauren Hein. I am the top of Advisor Relations at ROBO International. I am right here with our analysis staff, our esteemed business specialists, Jeremie Capron, my director of analysis, Lisa Chai, our senior analysis analyst, and Zeno Mercer, our analysis analyst. And we will cowl the applied sciences that basically excite us going into the brand new 12 months. First issues first. You possibly can obtain this report at roboglobal.com, and they need to have been emailed out to you at registration as properly. So they need to be sitting in your inbox if you would like to observe together with our dialog. Our 5 traits to look at this 12 months within the order that we will focus on them at present. Primary, liquid biopsy will allow early-stage most cancers detection. Quantity two, autonomy will redefine mobility. Quantity three, now getting into a world of related care. 4, AR/VR will break boundaries between the bodily and digital worlds. And our ultimate thrilling pattern for 2023 is reshoring will drive an automation revolution. So the primary query I suppose is open to all people, then we’ll begin with the liquid biopsy dialog with Zeno. How did you guys arrive at these 5 traits for the 12 months?

Jeremie Capron:

Properly look, at ROBO we predict robotics, AI, and healthcare applied sciences are a set of applied sciences that may be utilized to so many industries, very very similar to the web over the previous 20 years, and in the previous couple of years we hit an inflection level and we have seen machine intelligence considerably widen the vary of potential purposes. So a decade in the past was primarily about robots automating the manufacturing of vehicles. However in the previous couple of years we noticed robots popping out of the manufacturing facility and discovering large purposes in so many areas, warehouses, logistics, we’ve flying robots, we’ve robots driving vehicles and vehicles, we’ve surgical robots, we’ve automated methods throughout us, in labs, in transportation. So there have been so many areas to choose from. And so we slender it right down to these 5 traits as a result of we imagine they may have an necessary affect on funding methods over the subsequent few years.

Lauren Hein:

And I did take a look at the 2022 traits report, and there is some continuity there from what you guys have been enthusiastic about final 12 months for certain. Zeno, I will begin with you. Discuss to us about liquid biopsies early-stage most cancers detection, and stroll us via this primary section of the report.

Zeno Mercer:

Proper. So one of many first pattern that we highlighted for 2023 is the idea often called liquid biopsy, which is actually the power to detect most cancers within the blood, the purpose being to detect it earlier and fewer price invasiveness to forestall the unfold from stage one to stage two, stage three, stage 4 most cancers, and in the end present an outlet, a capability for extra folks to get remedy for most cancers. So I feel one factor to consider right here is first, what’s liquid biopsy? Basically it is detecting tumor DNA within the blood. This builds upon years and years of expertise development, each {hardware} and software program, that has allowed firms to exit and market merchandise, get FDA approval, actually, after which get insurance coverage reimbursement from offering these companies as a result of they validated the scientific efficacy of this. However in the end, liquid biopsy is a expertise that we actually imagine will take off in 2023 with new approvals and elevated uptake of individuals using this going ahead.

Lauren Hein:

Do you’ve gotten any particular firms which can be inside any of our indexes that excite you on this expertise? What would you say is perhaps the publicity inside any of our indexes by share foundation? Give us some recommendation right here.

Zeno Mercer:

Okay. So I will begin along with your second query right here. So our publicity and the way we take a look at the subsectors, if you’ll, that we’ve related to liquid biopsy. It will be remiss to speak about liquid biopsy with out speaking concerning the Genomic house. And we’ve about 11% uncovered to the Genomic house via firms resembling Illumina. So Illumina actually is a pioneer of DNA sequencing, which is really enabling the liquid biopsy house to behave and work. So Illumina additionally pioneered one of many first… They weren’t actually the primary to market with a liquid biopsy, however they’d an fascinating story the place primarily they have been doing non-invasive prenatal testing in 2013 on ladies who’re pregnant, to detect if their kids, their infants, they have been nonetheless within the womb, had any genetic illnesses, NIPT, non invasive prenatal testing. What they discovered although was that they really detected most cancers tumor DNA within the samples they acquired.

They usually realized that, hey, we’re discovering most cancers in ladies and a few of these folks may not know they’ve it. So they really went out and reached out to all of the those who had submitted samples, they usually truly found that sure, many certainly had no indication, no signs, no prognosis, something. And so what they realized is that, hey, we’re onto one thing right here and we will truly detect most cancers in blood like that. Now, they don’t seem to be the one ones who’ve carried out this. The truth is, one other firm known as Guardant Well being had truly already been just a little additional alongside in progressing their Guardant 360 gadget or assay, actually, which may detect most cancers early as properly. So these are two completely different firms that we’ve. There’s additionally a 3rd, Vercyte which has a lot of merchandise which can be detecting particular cancers resembling lung most cancers, thyroid most cancers, and prostate most cancers, which can be already available in the market at present and obtainable to folks to be used and getting for utilization.

So docs are prescribing this if they’ve any signs or if they seem to be a excessive threat inhabitants. Again to Grail although, which is the corporate that Illumina spun out. Basically Grail has a pan most cancers take a look at that may detect over 50 several types of cancers. And that is obtainable to most of the people now, however it’s at present about $850 a take a look at. And it is not coated by insurance coverage. So that’s of their pipeline to attempt to get coated within the subsequent a number of years. However, for instance, you thought you may need most cancers or it was uncertain a health care provider may truly prescribe this take a look at. So there can be an out-of-pocket pay for $850 at present. But when you concentrate on how a lot cheaper that might be than ready years to detect and discover a later stage most cancers, you possibly can actually begin to see the profit right here of how early most cancers detection, at that baseline value, if it will get coated, could possibly be very impactful for the healthcare ecosystem and people’ lives.

Lauren Hein:

Is there a world that you just envision within the close to future the place we’ll go in for routine blood work and begin doing a little customary most cancers screenings at that time?

Zeno Mercer:

Sure. So sooner or later, liquid biopsy will in all probability be part of yearly or bi-annual screening for folks. It may rely, perhaps there is a particular most cancers that’s increased threat for a person, and if that take a look at have been cheaper, perhaps that might be the take a look at that might be opted in for. However in the end, as the price of sequencing goes down, as this expertise improves and scales out they usually can have improved economies of scale from the price construction, you will positively begin to see liquid biopsy, extra of an annual screening, and most cancers detection charges would technically go up, however the stage at which most cancers is detected will go down, which might enhance the survival charges of many, many individuals. You could have disparities of 5, 10, 20x survival charges for a lot of cancers, and lots of of these, which haven’t got a correct or established protocol for detection. So that is actually recreation altering expertise that we imagine may have speedy adoption ramping up within the subsequent a number of years.

Lauren Hein:

So to tie this again to our HTEC index, primarily these firms you think about within the genomic subsector, are there different secondary subsectors which can be touching this?

Zeno Mercer:

Yeah, so whereas I began with Genomics because the core, we even have the Diagnostic subsector, which is 15% of our index and the Course of Automation. So if you concentrate on how the liquid biopsy course of works, you’ve gotten firms which can be constructing particular assays that may go and both accumulate or detect the most cancers itself, however there’s additionally Lab Course of Automation. It needs to be collected, it needs to be securely transported again to a lab. It isn’t being carried out on web site, typically talking. After which one other secondary market that we even have publicity to here’s a Precision Drugs aspect. So whereas earlier most cancers detection is a superb factor and might present higher outcomes, on the opposite finish of the spectrum the precise remedy protocols in place are being tremendously enhanced via the event of precision medication with CAR T therapies, CAR NK therapies and different precision medication that may goal the most cancers with out extra of a shock and method like chemotherapy and different strategies.

So we’re actually enthusiastic about seeing early detection, met with extra exact medication, having an enabling impact at decreasing most cancers mortality charges and the general price and burden of most cancers from each an financial and alternative price for folks.

Lauren Hein:

Superior. Zeno, positively one thing that touches all people. So thanks a lot for that outlook. Jeremie, I will pivot over to you. Let’s discuss autonomy redefining mobility. And really that is an extension of two of the themes from final 12 months’s report that robots are coming to avoid wasting the provision chain and {that a} manufacturing facility automation tremendous cycle is right here. So perhaps an excellent place to start out is speaking concerning the greatest development alternatives in mobility and related automobiles within the subsequent upcoming 12 months.

Jeremie Capron:

Certain. Properly look right here, the important thing phrase is autonomy, and autonomy is the subsequent step of improvement for machines. And so till not too long ago, automation was actually about programming machines and computer systems to do repetitive issues in a really systematic means, very quick and precisely. Now, with the arrival of machine intelligence, we’re in a position to push it to the subsequent stage, which is autonomy and methods that may make choices primarily based on their atmosphere and the way it adjustments. And in order that’s been enabled by large progress by way of computing energy, by way of gathering robust knowledge units and working machine studying onto them. After which by way of actuation and the way these machines are in a position to react actually quick. So in fact we’re all speaking about autonomous vehicles, and that is the holy grail on the market. And albeit talking, we’re getting shut. We have seen the beginning of the primary ROBO taxi companies, business companies, being launched in the US over the past couple of years, in order that’s coming actually quick.

However we predict that is simply the tip of the iceberg. And in actuality, autonomous mobility is gaining loads of traction in areas that you could be not pay attention to. And one of the promising areas, in our view, is de facto within the warehouse. So it goes again to what you have been saying decrease and about warehouse automation. The truth is, there are a whole lot of 1000’s of autonomous cellular robots working at present in distribution facilities for e-commerce and in different areas of the provision chain. We predict that is in all probability the faster-growing and most fun piece of autonomous mobility from an investor’s perspective at present. There are loads of firms concerned on this space, lots of that are within the ROBO Index.

Lauren Hein:

I need to ask you subsequent concerning the firm particularly within the ROBO Index, however do you envision a world sooner or later the place warehouses are totally autonomous with none people current there in any respect? Possibly not in 2023, however additional out?

Jeremie Capron:

Yeah, that is definitely the route we’re taking. And if you concentrate on how manufacturing has change into very a lot automated areas like automotive and shopper electronics and issues like that, these producers are tending in direction of, what we name, the sunshine out manufacturing facility the place you principally can flip off the lights as a result of there isn’t any one in there. And we’re not fairly there but at present. However I feel the purpose for provide chains and warehouses and distribution facilities could be very comparable. However at present we’re so removed from that. The truth is, right here in the US, we’ve greater than 17,000 warehouses, and a low single-digit share of these are automated at present. So there is a good distance by way of adopting all kinds of automation gear first after which transferring to autonomous cellular robots, and in the end the lights out the warehouse.

Lauren Hein:

Really easy segue to firms which can be going to learn as we do extra autonomous methods with logistics and manufacturing automation. So what are a few of your favourite firms? I am assuming most of those are within the ROBO Index particularly.

Jeremie Capron:

Sure. We predict provide chain optimization and warehouse automation and real-time stock administration are the true focus right here, and you will find within the ROBO Index, many firms concerned in warehouse and logistics automation. You have obtained all kinds of various enterprise fashions. You have obtained firms like Zebra Applied sciences right here within the US that do real-time asset monitoring, the monitoring, and tracing of parts of parcels in a provide chain. You may discover firms like KION in Germany which does logistics automation options for the massive gamers, or Daifuku in Japan, that is the world chief in materials dealing with gear. You may discover software program companies like Manhattan Associates, that is a US-based software program firm that does warehouse administration methods, or I can consider Auto Retailer that is primarily based in Scandinavia and does very compact automated storage methods. That is gained loads of traction and that went public final 12 months.

Lauren Hein:

I will drag you again actually rapidly to autonomous automobiles. Possibly let’s first cease with electrical automobiles. Do you see a transition within the close to future until all of the vehicles on the roads might be electrical after which the subsequent step might be autonomous automobiles? Then I need to discuss firms which can be going to learn from development in these areas, particularly.

Jeremie Capron:

Yeah, we definitely suppose that electrical automobiles supply loads of benefits over conventional combustion engine-based automobiles. And the advantages are so huge that the market goes to shift naturally towards that. The massive query mark is over the tempo of this transition, and we will debate round that, however the pattern could be very clear and really highly effective. And for those who take a look at investments being made by OEMs, we have seen a dramatic shift over the previous two to a few years by way of allocating to EVs. In order that pattern is firmly in place. And it is necessary as a result of an electrical automotive is actually a a lot easier automotive than a combustion engine-based automotive. There are fewer transferring elements, the upkeep is simpler, and the design is simpler, however you want very important investments by way of manufacturing property to ship these.

By way of the beneficiaries of the extra electrical and sensible vehicles, we see rather a lot across the semiconductor business and the businesses that ship the chips which can be used for the computing aspect or for the pc imaginative and prescient aspect. And in ROBO, you will discover firms like Ambarella that does laptop imaginative and prescient on a chip, and whose expertise is embedded within the subsequent era of automobiles, otherwise you’ll discover firms like Qualcomm and Nvidia, and Hexagon additionally in Europe.

Lauren Hein:

Okay. One thing within the report that we’ve not talked about but is drones, drone expertise, particularly for a last-mile supply resolution. Is that one thing you suppose is life like? Is that one thing we predict is inexpensive? And do we’ve any drone publicity inside ROBO?

Jeremie Capron:

Sure. Drones, we regard as flying robots, and we predict there’s an enormous market potential for one of these expertise. Right this moment it is nonetheless extra of a distinct segment, however all the massive gamers are experimenting with drones, from supply purposes to stock administration indoors. We predict, proper now, on the business aspect, there’s an awesome alternative to make use of drones for monitoring and surveillance, and surveying outside. It may be public infrastructure, it may be energy utilities, it may be utilized in mining and development, and agriculture. And that is the place autonomous drones are gaining traction proper now. So by way of publicity inside ROBO, it is as soon as once more going to be on the chip aspect, and firms like Nvidia and Analog Gadgets are concerned there, Ambarella and Qualcomm or key suppliers of chips which can be being utilized in drones, and particularly autonomous drones.

Lauren Hein:

Is the FAA on board with this, and are we truly doing any drone supply within the US at this level?

Jeremie Capron:

This stays all experimental at this stage, particularly within the US the place we’ve robust regulation of airspace. However we began to see some firms receive authorization to function autonomous drones past the visible line of sight, which signifies that you do not want a pilot on the bottom with a line of sight onto the drone. And in order that’s a major milestone that we have simply crossed, and so that you’re in all probability going to see much more deployments going ahead.

Lauren Hein:

Very cool. All proper. Thanks. Jeremie. We will come again to you in a bit, however first, Lisa, let’s discuss how we’re getting into a world of well-connected care. We will discuss rather a lot concerning the web of issues on this part, so perhaps additionally discuss, outline the web of issues earlier than we actually get going, and discuss healthcare purposes for the IoT.

Lisa Chai:

Oh, positively. I feel primarily what you are actually seeing is that the healthcare business is de facto going via this main transformation pushed by rising prices, doctor burnout, lack of nurses, and sufferers positively demanding simply higher well being care. Who likes their healthcare course of and their plans? So we’re actually seeing developments proper now in healthcare expertise. And we predict that subsequent 12 months can be a robust 12 months for areas like personalised medication and areas like IoT that you just talked about. So medical IOT, we’re tremendous bullish. We predict proper now these medical gadgets which can be wearable and moveable are actually wanted. They’re non-invasive, and it supplies real-time monitoring, and enhancing affected person expertise round entry to healthcare knowledge, and join them to healthcare suppliers. So we’re actually bullish as a expertise that has actually improved via higher cloud applied sciences and higher wifi connectivity and adoption of AI. AI is lastly right here in healthcare. So we now have gadgets you can put on, which can be wearable sensors, that observe real-time well being care knowledge. So physicians can control you as you permit the hospital or the physician’s workplace.

Lauren Hein:

Very a lot listening to an extension of final 12 months’s theme that knowledge analytics and AI are going to drive efficiencies in well being care. It seems like that was fairly spot-on final 12 months. Discuss to me just a little bit about firms inside the well being tech index. I am assuming there’s additionally some crossover with the unreal intelligence index, however firms which can be actually integral to this house, to this creating expertise.

Lisa Chai:

Sure. Inside the healthcare expertise innovation technique, we’ve two subsectors the place that basically seize this publicity. One space is in Medical Devices. So these are firms that not simply present surgical instruments, but in addition the IoT gadgets. After which the opposite subsector can be Telehealth. And these two subsectors actually seize this bullish pattern that we will see in 2023 with an incredible quantity of development behind it. A few of the index members which can be actually main this transformation are firms like Dexcom. Dexcom has developed a transmitter gadget that you just put on that measures and sends real-time glucose knowledge wirelessly to the doctor. So that you need not have this painful fingerprint that is very invasive. They’ve actually modified the sport.

Index members like iRhythm, Abbot, and Medtronic, are additionally firms which have actually led the revolution transformation round cardiac monitoring gadgets. So whether or not it is utilizing cardiac displays or sure sorts of pacemakers, you are positively seeing the cardiovascular market actually reworking, the place it is non-invasive, they’re moveable, and also you’re in a position to talk along with your physicians, they usually may control you as you permit the hospital for surgical procedures. So these are actually game-changing in our minds, and we predict that HTEC technique actually captures many of those firms which can be actually reworking healthcare.

Lauren Hein:

So I am listening to that these appear to be proper now utilized in extra post-care aftercare affected person follow-up purposes. Is there a world the place we use extra medical IoT in diagnostics, or do you’ve gotten any ideas about that?

Lisa Chai:

Sure, I feel you are going to see each of those wearables that offer you biosensing applied sciences. So it may measure your heartbeat and alert and offer you detection on whether or not you might be about to have some healthcare points. So that you’re positively seeing a world converging of that diagnostic giving that real-time alert. After which the AI actually enhancing and serving to the analytics aspect. And now as a result of the cloud has actually improved, and the wifi connectivity has actually improved, we’re in a position to get the info actually rapidly and get the medical assist that you really want. So you bought the diagnostic aspect and clearly on the post-surgical aspect, and that is crucial as a result of that basically permits you to have much less hospital keep, and you will have a greater affected person end result. And likewise the insurers and healthcare firms are additionally going to see decrease bills for our sufferers and people.

Lauren Hein:

I simply need to verify additionally for everybody, the applied sciences for what you have spoken about, medical IoT gadgets particularly, will not be one thing we’re discovering on our smartphones at present, not one thing that is simply mass-produced at this level with the rings or a watch. They’re extra specialised healthcare gadgets.

Lisa Chai:

Sure, positively. I feel what you are going to see going ahead, we will see extra options and applied sciences and innovation round patches, wearable patches that might launch a sure sort of remedy, and that is going to hook up with perhaps your smartwatch going ahead, or additionally along with your diagnostic resolution. So we will have a world the place we will have all this knowledge that is going to tie in and combine it, and it will ship that real-time alert to your medical suppliers.

Lauren Hein:

After which lastly, once more, to tie it again to the HTEC Index, what subsector do you suppose this typically falls into? Possibly it is a few subsectors. We have talked about a few firms already particularly, however the place do you classify that inside well being tech?

Lisa Chai:

You’ll discover this within the Medical Instrument subsector, which is certainly one of our greatest subsectors inside the HTEC technique. You’ll additionally see a few of these firms have the presence wanted for Telehealth. And Telehealth, we anticipate that subsector to develop over time as we see all this innovation occurring, as we get extra knowledge and analyze this knowledge, after which additionally be capable of allow a few of these personalised therapies and medication to the people and sufferers.

Lauren Hein:

And we’re seeing some bleed over into the AI index as properly.

Lisa Chai:

Sure, precisely. So inside the THNQ Index, we’ve, as you recognize, an in depth quantity of AI scoring by way of purity of AI income. So many of those firms which have the healthcare publicity, they could not have the AI income publicity, however we’ve a extremely good record proper now the place we’re actually being thorough, by way of what firms will make it to the index. However at the moment, we’ve a number of firms which have healthcare publicity, firms like Butterfly, that is obtained robust AI revenues.

Lauren Hein:

Very good. Zeno, we will pivot to you, if that is okay. Let’s discuss breaking boundaries between the bodily and digital worlds. Augmented actuality in digital actuality. Possibly begin with some definitions there, after which let’s discuss via why you suppose that is an thrilling theme for 2023.

Zeno Mercer:

Proper. So clearly, to take a step again right here, it was a giant 12 months final 12 months when Meta rebranded Meta as a part of the metaverse. So I feel simply throw that on the market. After which pondering ahead, we have got augmented actuality and digital actuality. So augmented actuality can be an overlay expertise or visible display screen, there are a variety of several types of modalities this might happen, perhaps in your dashboard, contact lenses or glasses, or a headset, however primarily it is augmenting actuality. It is a digital overlay. It could possibly be audio, it could possibly be visible, however in the end it is an understanding, a digital understanding of what is occurring round you and the power for that to offer insights which can be custom-made to you. Digital actuality can be extra in a siloed sense of simply being in its personal digital world, so not likely having something to do with what’s round you.

And that might have many alternative purposes, however in the end it would not require as a lot, there’s loads of processing to create these digital worlds, however it would not require actual time processing of the world round you. Proper now you are seeing in all probability one of many greater Christmas vacation present gadgets can be virtuality headsets from Fb or Meta and from Microsoft. And largely for gaming proper now. And so proper now, I feel lots of people consider AR/VR as simply the proxy for a brand new type of gaming, however there’s actually much more to it.

Lauren Hein:

Do you need to take a stab at defining the metaverse?

Zeno Mercer:

Certain. I feel it is a phrase that goes means past the simplified single phrase, metaverse, that we use. However primarily there are two completely different types of the metaverse. There’s the augmented actuality metaverse, which truly incorporates and understands the true world, that is physics, chemistry, what merchandise and objects are and the classification of these gadgets, and the way they work together with the world. After which there’s the pure metaverse kind that perhaps Meta and Zuckerberg would think about, which is simply dwelling and interacting purely on this digital world, which I feel is frightening to some those who we will be this matrix drone society. But when you concentrate on how we already talk and have developed this society. Folks have been glued the TVs and PCs, cell phones, and now we have got smartwatches. They’re actually simply methods of portray, speaking and sharing, and having completely different experiences, throughout completely different life phases and completely different types of leisure or studying.

So I feel for those who’re wanting ahead, beginning subsequent 12 months, you are actually going to begin to see extra information bulletins of expertise that might be approaching board. Even not too long ago, there have been rumors going round that Apple’s engaged on glasses, augmented actuality glasses, which we may in all probability guess can be just a little bit higher than Alphabet’s Google glasses that have been launched, at this level, over a decade in the past now. So I feel it is actually not hit folks but that in a decade from now, folks may not be carrying cell telephones anymore. We will have a unique tech modality that is actually introduced in by the infrastructure and software program and many alternative industries colliding to create a extra seamless expertise that higher integrates into our lives. The common grownup Google searches three to 5 instances a day. That info could possibly be extra real-time and synced to your each day life, and actually profit folks, each youngsters, and academics, in addition to the getting old inhabitants on methods to navigate the world and get assist in real-time. So we’re actually excited concerning the constructive advantages that may happen from the utilization and uptick of this house.

Lauren Hein:

So the traits report does a very nice job of laying out loads of purposes for augmented and digital actuality applied sciences. It feels just a little bit at present perhaps we predict that it is all simply gaming, after which we think about ourselves dwelling in a completely digital world sooner or later, however there’s definitely a spectrum. Do you need to discuss every other purposes for this expertise which can be relevant extra at present?

Zeno Mercer:

Yeah, certain. So I feel one of many extra direct segues from gaming can be training. If you concentrate on how every individual learns, they go to a classroom, in the event that they’re fortunate, they get tutoring, in the event that they’re even luckier, they’ve entry to expertise and issues that may perceive how they study, what they know, the place they progress. And that is each from a testing aspect and a studying aspect. So I feel you will see throughout quite a few disciplines, arithmetic, physics, and historical past, there are going to be increasingly more methods of personalizing this training to allow them to perceive how every particular person learns. This could additionally develop via sports activities and different bodily studying resembling golf or what have you ever, the place it could perceive the way you’re stroking. You have obtained, as we coated earlier about wearables, you will see wearables additionally apply to this augmented and digital actuality the place it could actually offer you visible and voice cues which can be automated that will help you learn to do issues higher, perhaps even cooking.

So I actually like training, studying, and training. There’s additionally collaboration. Proper now we’re on this name, we’re all in other places, however technically we’re right here collectively proper now, and the viewers right here, even when they’re right here watching this later, they’re right here on this second. Sooner or later, this collaboration, every certainly one of us is taking a look at perhaps a TV display screen or a monitor and look right into a digital camera. Sooner or later, it will be even higher. You may have extra personalised dashboards, extra info might be popping up in your display screen that immediate you and offer you visible cues. And so even working collectively, every individual will be capable of work in their very own model, however every individual on the opposite aspect of it’ll even have their very own distinctive angle with out impacting the others’ expertise. So this personalised buyer expertise will actually enhance organizational collaboration.

After which in the true world, going again into the augmented actuality aspect of issues, take into consideration simply navigating a metropolis or a brand new expertise. Possibly you pull out your telephone and determine methods to go on Google Maps. In actuality, you will have this augmented actuality headset. You are able to do this now with Google Maps the place you maintain up your telephone and it could present you which of them route to go, however you are still not fingers free. And I feel that the subsequent step is that this hands-free, seamless integration of expertise that’s designed that will help you. Let’s hopefully keep away from the Meta world the place it is simply flooded with ads and it is truly helpful expertise that is supplying you with the data that you really want and wish in real-time.

Lauren Hein:

So this specific dialog feels very particular to suppose THNQ, the AI index. You possibly can right me if I am improper on that, however are there any specific firms that you just’re actually enthusiastic about?

Zeno Mercer:

Yeah, I feel I will rapidly add one other space you talked about. That is positively very AI-focused, AI is empowering the expertise to create, perceive, and implement this, the infrastructure and software aspect. However there is a idea often called digital t win, which is actually recreating, and I alluded to this, however it’s recreating the bodily world and digital world. This might even be for the human physique. So suppose healthcare. So there are many purposes already at present being developed and deployed, resembling navigating surgical, the surgical house of understanding and doing pre-op, personalised implants which can be made utilizing 3D era software program that matches the person. And so we’re already seeing actual affect from this, it simply hasn’t been known as essentially AR/VR, which is extra of how we’d be utilizing it. So some firms that I am actually enthusiastic about that we’ve publicity to at ROBO can be, on the infrastructure aspect, none of this might be potential with out superior AI semiconductor chips.

So firms like Nvidia making AI chips. They’ve not too long ago been within the information and a part of world commerce wars about how highly effective these chips are as a result of they actually allow a quick understanding of deep studying and the way issues work. They’re sooner at crunching these numbers. They’re sooner at real-time processing, which is necessary for these purposes. I feel it is also necessary to notice that Nvidia is not only a {hardware} firm. Additionally they have software program that they are actually diving into deeply. And for instance, they’ve not too long ago launched a 3D modeling platform, which primarily permits you to sort in textual content and it will offer you 3D mesh modeling that you would truly implement within the video games or different experiences. So we’re actually seeing huge progress within the AI house and the way it can apply to the completely different subsets of society right here. So there’s semi, the subsequent step can be the networking and different infrastructure that goes into place, like safety.

So for example you’ve gotten this AI, you’ve gotten this augmented actuality, you’ve gotten this. How does all of it join? How does it perceive what you are seeing? You could have sensors and real-time processing. So you have obtained huge knowledge storage. If we’re going principally from a textual content to picture to video to actual time 4D society within the digital, huge knowledge scalability is required and networking capabilities. So you have obtained firms like Pure Storage and Arista Networks which can be actually highly effective performs right here. On the opposite aspect, you are going to have, laptop imaginative and prescient for augmented actuality. So firms like Ambarella, which we have talked about in different traits. I feel that is one factor to focus on actual rapidly is that whereas we’re speaking about these traits, we attempt to discover firms which can be already highly effective and market leaders and have nice expertise, however they’re truly in a position to play into completely different mega traits that might see huge trillion greenback, 5 trillion greenback markets that aren’t in existence at present, actually.

I needed to briefly spotlight that. So we have got now Community & Safety. On the safety aspect, we even have cybersecurity. As increasingly more of our interactions are digitized, because the companies that we work together with are automated, our identification and safety are crucial. Again within the day, and I am saying this nearly facetiously, you’ll go to a financial institution in individual, there’d be a safety guard there, and perhaps there is a gold vault. Properly, now it is extra about defending your digital identification to just be sure you’re the individual accessing it by yourself accord. And that all through the journey of accessing and transmitting knowledge and cash that there isn’t any third social gathering accessing this knowledge or manipulating it. And so the cybersecurity part with firms like CloudFlare, Gen Digital, and CrowdStrike, are crucial and can change into much more necessary as this progresses. I feel it will even be remiss to not discuss concerning the firms which have already been constructing within the 3D house for a while.

This could be firms like Dassault, Autodesk, and Adobe, who’re principally pioneers and leaders within the digital 3D house. However I feel I will additionally briefly discuss, I’ve talked about Meta on this name, and we truly do not maintain Meta. They’re actually a really consumer-focused promoting firm, and that is the core of their income. We’d somewhat maintain Microsoft as a metaverse play, and on the whole AI play, as a result of we imagine they’re making a lot better strikes as an AI firm within the metaverse play with their partnerships with Open AI for enabling these newer applied sciences to really be within the fingers of people and customers in a extra constructive, impactful means. So we’ve Microsoft in our AI (THNQ) index. I feel that covers a lot of the subsectors right here, however I’ve to say that the majority of them ultimately will come to play into this house sooner or later in time.

Lauren Hein:

All proper. The final query I’ve for you, then we’ll transfer again to Jeremie and discuss reshoring. This specific part of the traits report does have loads of deal with enterprise capital investing in these startups over the past 12 months or actually two years perhaps. Do you see our index constituents making acquisitions? Do you see firms truly IPOing into this house that could possibly be potential index constituents? Any form of traits you are expecting subsequent 12 months?

Zeno Mercer:

Sure. So in the end across the startups on this house and metaverses, 3D imaging modeling, all of it comes down to actually AI. AI is the part that is going to offer these firms a leg up or benefit in creating and deploying these applied sciences. That is also wanting on the infrastructure performs, the connectivity to permit real-time connections between the gadgets that we’ll be carrying, and the backend cloud infrastructure. By way of acquisitions, we’re already seeing M&A within the house throughout safety, and throughout AI. There are loads of startups which can be creating this house, however I feel folks additionally low cost, and perhaps worry on the identical time, what firms like Nvidia are able to doing. With their current 3D modeling mesh improvement they simply pushed out, which in all probability simply knocked loads of startups out of the competitors by itself. So I feel it is necessary to take a look at which firms even have actually defensible tech that might be acquired by these huge tech firms as a result of they may look to quickly develop and preserve share because the world switches over to this new paradigm.

Lauren Hein:

Which is why market and expertise management are key in our constituents’ funding course of. All proper, Jeremie, let’s discuss reshoring. Reshoring is the ultimate of our themes that we’re taking a look at for 2023. We have talked about semiconductors rather a lot right here at present, and we have truly had the CHIPS act handed in 2022. That might be reassuring loads of semiconductor manufacturing. However discuss typically concerning the reshoring pattern that you just see for the subsequent 12 months.

Jeremie Capron:

Okay. Properly look, I feel one of the necessary turning factors within the world macro is concerning the finish of globalization, and actually a change in that pattern that has peaked over the past 5 years or so. And so began a couple of years in the past with the business commerce struggle between the US and China. We had the pandemic. Now we’ve geopolitics coming to the forefront, and so our view is that the pattern of reshoring goes to realize traction, and there is more and more clear proof of that. So that you talked about the CHIPS Act, that is one, however a collection of main US insurance policies enacted up to now few months are actually pointing in direction of that. And we predict that this pattern will create a significant tailwind for robotics and industrial automation. And it is not like automation wants a booster within the present atmosphere, as a result of when you concentrate on the issues we’re going through at present, the labor shortages, inflation, and rising prices throughout the board, the one clear reply to that from a enterprise chief’s perspective has been automating.

And so companies have began investing at a a lot sooner tempo, over the previous two years. The truth is, demand for automation at present is at document highs and it is rising, and there is extra demand for robots and automation than suppliers can provide. However along with that, these macro adjustments round globalization or the tip of it are going to have an important affect. That is protectionism, deglobalization, we will name it French shoring or reshoring from China into the upper price areas in Europe. Within the US you’ve gotten the getting old of the inhabitants, the restriction of migration, the affect of worldwide local weather change, and cyber warfare, as Zeno simply touched on cyber safety. All of that’s actually resulting in a way more acutely aware effort to fabricate regionally. And robotics automation is the enabler of that, the enabler of aggressive manufacturing. And once more, we’re already spending unprecedented quantities on that. The truth is, within the second quarter of the 12 months, robotics orders in North America have been up 25%, 12 months on 12 months, and within the first quarter, they have been up 28%. So we’re off to a really, very robust 12 months in 22. We predict that traits will proceed into the subsequent few years.

Lauren Hein:

Main firms benefiting from that pattern? After which the subsequent query I will ask you, are any particular industries you actually see leaning into reshoring?

Jeremie Capron:

Yeah, so the beneficiaries are a few of the regular suspects, just like the main robotics firms like Fanuc, or Yaskawa in Japan, ABB, Sweden, Switzerland. You could have KUKA, additionally one of many high gamers in industrial robots. However you even have the businesses that take part in automation management methods like Rockwell Automation right here within the US, you’ve gotten the pc imaginative and prescient gamers like Cognex. Collaborative robots, firms like Teradyne, that owns Common Robotic. That is obtained the highest market share in collaborative robots that may work alongside people within the workshop. So these are a few of the apparent one, however there’s a collection of secondary beneficiaries. You consider the actuation, you concentrate on the management system, the software program layer that Zeno additionally talked about.

Lauren Hein:

Any particular industries that you just see reshoring? The pattern actually accelerates within the close to time period, clearly, it seems like principally the whole lot could possibly be impacted, however within the close to time period, perhaps in 2023?

Jeremie Capron:

Yeah. So the obvious one to everyone seems to be semiconductors, as a result of we simply had the CHIPS Act handed, and that is earmarking 40, 50 billion {dollars} in direction of home manufacturing of chips. And instantly following this announcement by the White Home, we have seen main bulletins for Micron and Qualcomm, and Taiwan Semiconductor, all constructing new multi-billion greenback crops. And so all of the infrastructure goes to assist this, is coming alongside as properly. Then we had the 2021 Infrastructure Act that is additionally allocating billions of {dollars} to high-tech infrastructure throughout the nation. There is a main push in direction of electrical automobiles that we already talked about. And it is necessary for buyers to grasp that the manufacturing of electrical automobiles implies much more automation than conventional vehicles. And that is due to the depth of using robotics to govern batteries, for instance, the entire electrical powertrain manufacturing requires extra robots and extra management methods. In order that’s one other main tailwind right here.

Lauren Hein:

Yeah, seems like this excessive conviction theme goes to be heavy within the ROBO Index with some crossover once more, into perhaps AI particularly.

Jeremie Capron:

Sure, I agree. ROBO has very direct publicity to all we simply talked about, from industrial automation to manage methods, laptop imaginative and prescient, actuation, however there are additionally going to be some AI parts to it. So you will discover a point of publicity within the AI index as properly.

Lauren Hein:

Properly, I need to break as a result of I need to open up the ground to questions. Additionally, I need to remind everybody listening that if you would like to obtain common updates from us, you possibly can join our publication. However man, Jeremie, Zeno, Lisa, thanks for being right here. We will let the viewers take it from right here.