I’ve an open mind regarding the future.
I think any good investor has to. After all, you don’t know what will happen next. No one else does, either.
And while some things look bad out there, you certainly don’t want to let your investing become a slave to fear.
Because the good news is that on balance, the future is usually brighter than the past.
That goes for life, too.
I think there’s too much attention given to extremists of every persuasion in today’s world.
Alt right, far left, raging bulls, raging bears…you never hear from the ordinary in the middle.
Maybe it’s because the middle is boring. And you don’t shift newspapers or get ratings talking about how things are mostly pretty good.
Even if that’s the truth.
And from a historical angle, I think it is…
The likelihood of a violent death has never been lower, we’re better educated than ever before, childhood mortality has plummeted…and this is just the basic stuff.
Think of the commonplace luxuries we take for granted.
Holidays abroad, foods that in the past were for royalty only, and access to the entire history of human knowledge via the internet.
In short, life has never been better.
Not just in advanced countries either, but everywhere.
In 1981, over half the people in the developing world were living in poverty. In 2012 that figure had dropped to 12.7%.
Don’t underestimate the impact of our way of life to this collective success.
Despite some faults, it’s largely thanks to capitalism, to free markets and to open societies, that humanity is now in a better position to solve the problems of the 21st Century.
Importantly, this environment of ideas, openness and competition has allowed technology to flourish.
As researchers Ian Goldin and Chris Kutarna write in their book Age of Discovery:
‘These conditions create an ideal habitat for ideas and genius to flourish, and that flourishing is well under way. Science and technology have never been closer to flipping our basic condition from scarcity to abundance.’
In my opinion, one technology is about to propel the world forward once more, into a fourth industrial revolution…
The foundations of progress in the 20th Century were laid in the industrial revolution of the 18th and 19th centuries. A time that radically changed the world of manufacturing and in turn, the world itself.
Although some people lost out in the flux of change, the world as a whole became a much better place to live for most.
The heavy industry of steam was followed by the power of electricity, and then later, the advent of digital technology you see all around you today.
Now here’s the thing…
The manufacturing industry is once again on the verge of a breakthrough moment.
Some are calling it ‘Industry 4.0’. The fourth industrial revolution.
According to the CFO of DASAN Zhone Solutions, Michael Golomb:
‘Industry 4.0 brings together IoT, IoS (Internet of Systems), and real-time data to provide control, insight, and productivity to every aspect of a business’s operations. Imagine automated processes, smart factories, and agile infrastructures, and much more.’
At the heart of this movement is 5G. The latest advance in mobile communication technology.
The fifth generation of mobile networks is set to become a US$251 billion market by 2025. But it’s the knock-on effects on manufacturing that I think you need to watch closely…
The 5G effect
5G will make manufacturing better in a number of ways.
But the biggest impact is through the world of big data.
As you probably know, big data refers to the surge in devices producing real time data. From sensors on cars, to smartphones and in-home devices of all description.
You can use this information to simplify your life and access any information you need, when you need it.
In manufacturing, the same effect is taking hold. And 5G is set to turbo charge the effects.
Michael Golomb once again:
‘Modern-day manufacturing is based on various devices working together, which translates to bulk data creation on a daily basis.
‘5G’s low latency, coupled with its high bandwidth capacity, can allow this increased collection of data to be transmitted and analyzed faster.
‘For complex processes used in manufacturing, the ability to derive high quality data-driven insights is a clear competitive advantage at scale.’
The 5G story is a story about data. And the consequences of where this world leads.
In Finland, a Nokia factory already has robots that roam the factory floor looking for problems to fix!
We’re entering a world where machines might actually start making more and more decisions, rather than humans. This could lead to job losses, however, some forward-thinking companies are looking to soften the blow.
For example, Amazon.com, Inc [NASDAQ:AMZN] plans to spend US$700 million over the next six years to retrain workers in preparation for these changes.
Amazon has a history of being a first mover in new workplace practices and pretty much invented the area of cloud computing as a result.
A major advantage of 5G is also in improving the world’s complex supply chains.
By having real time data at all stages of the supply chain, smarter decisions are made at every turn. At scale this has an exponential effect.
American company Sprint estimate they’ve already saved billions thanks to this new capability.
So how can you tap into this 4.0 moment?
Investing in boring can be exciting
The point today is that no matter the headlines, it’s likely the world will keep improving.
And technology will play its role in helping humanity do this.
This isn’t just a pleasant thought, it’s also an investing advantage.
I think if you can look five or 10 years down the track, you’ve a distinct advantage over short-term investors who can’t see past the day-to-day drama.
And right now, there’s no technology that is going to play a bigger role in driving this than 5G.
It might sound boring or too technical. But behind it all is something very special.
In a nutshell, it’s all about using data to take businesses to the next level. And it could trigger a quiet fourth industrial revolution before you know it.
I’ve a special report that lays out the 5G opportunity in more detail including two investments you can make today. You can read it here now.
Editor, Money Morning
PS: There’s no doubt about it, the Artificial Intelligence revolution is coming. So, how do you invest in an idea as big as Artificial Intelligence? Start by finding stocks that are either pushing the boundaries or making it a reality. Check out Money Morning contributing editor, Lachlann Tierney’s top picks here.