Innovation Update
17th August 2016 - Innovation Update
In July 2016 Citi Group published their latest Global Perspectives & Solutions report entitled Disruptive Innovations IV. While their choice of technologies is interesting, I found their narrative dense and difficult to read. As you will see, some of the technologies are not futuristic at all but are already partially with us already. This is a very brief summary of those innovations.
The first is the big data revolution in energy. Oil exploration and production already generate huge amounts of data; greater processing power and more sophisticated software could significantly lower the cost of finding, extracting and refining oil and gas by making better use of this data. In the electricity sector improved data analytics are going to be required to optimise bi-directional networks made more complex through the installation of renewable and local power generation and associated distribution systems. Deployment of these tools has the potential to significantly reduce electricity costs.
Switching from traditional steel pipes to new thermoplastic pipes decreases subsea costs by 30-40% and total deepwater costs by 10%, enough to lower the breakeven oil price by $4/bbl. (With climate scientists calling for an end to fossil fuels by 2030 in order to stave off rising temperatures, these cost cutting measures in the oil and gas industry will make this more difficult to achieve).
Contextual commerce would allow consumers to order goods and services without having to exit an application and access a vendor’s website. Increasingly, online purchases will be suggested and transacted through non-traditional e-commerce sites such as social media. We see crude versions of this right now when Google or Facebook present adverts consistent with knowledge of both the consumer and the content of the web page.
A related innovation is the emergence of the direct to consumer marketplace which cuts out wholesalers and retailers and allows consumers to interact directly with manufacturers. Moving from proximity sourced product to a direct-to-consumer marketplace would create a $200bn annual revenue opportunity for apparel manufacturers. (Again this is not a new phenomenon as I watch my daughters increasingly purchasing clothing online, often on a try-on and optionally return basis.)
Wide bandgap (WBG) semiconductors let devices operate at much higher temperatures, voltages, and frequencies while being smaller and more reliable. WBG semiconductors have shown the capability to meet the higher performance demands yet enable design of modules that are smaller, faster, and more reliable than their silicon-based counterparts, resulting in improved efficiency when it comes to existing applications such as power chargers, and fully meeting the needs of new emerging applications such as MRI scanning and automotive radar.
In like vein, consumer devices by 2021 could look like a thin and flexible piece of paper through the use of flexible, organic electroluminescent display (OLED) technology. Future devices will enable augmented reality functions which allow users to view and touch objects from different angles in an almost realistic fashion and to use a gyroscope to adjust views and aspects. Consumer media devices could be the focal point of the “connected home”, integrating a variety of services and connectivity into one location.
The use of open source software in robots can accelerate robot penetration by lowering customer adoption cost as the source code is made available to users to amend as they see fit, and usually entitles unrestricted re-distribution to others. This is a benefit to developers in a variety of ways ranging from collaborative development to standardized robotic interfaces.
Epigenetic approaches in cancer treatment could become a $10bn market by 2025. Epigenetic drugs, which can switch genes on and off, may materially increase the percentage of patients likely to experience profound increases in survival in response to immunotherapy. Also on the medical front, new delivery methods will increase the ease and effectiveness of drug delivery for the growing number of people with ocular disease. (With so many developments taking place in the medical arena, I’m not sure why these two received special mention.)
Useful Links
Citi Group Global Perspectives & Solutions: Disruptive Innovations IV
In July 2016 Citi Group published their latest Global Perspectives & Solutions report entitled Disruptive Innovations IV. While their choice of technologies is interesting, I found their narrative dense and difficult to read. As you will see, some of the technologies are not futuristic at all but are already partially with us already. This is a very brief summary of those innovations.
The first is the big data revolution in energy. Oil exploration and production already generate huge amounts of data; greater processing power and more sophisticated software could significantly lower the cost of finding, extracting and refining oil and gas by making better use of this data. In the electricity sector improved data analytics are going to be required to optimise bi-directional networks made more complex through the installation of renewable and local power generation and associated distribution systems. Deployment of these tools has the potential to significantly reduce electricity costs.
Switching from traditional steel pipes to new thermoplastic pipes decreases subsea costs by 30-40% and total deepwater costs by 10%, enough to lower the breakeven oil price by $4/bbl. (With climate scientists calling for an end to fossil fuels by 2030 in order to stave off rising temperatures, these cost cutting measures in the oil and gas industry will make this more difficult to achieve).
Contextual commerce would allow consumers to order goods and services without having to exit an application and access a vendor’s website. Increasingly, online purchases will be suggested and transacted through non-traditional e-commerce sites such as social media. We see crude versions of this right now when Google or Facebook present adverts consistent with knowledge of both the consumer and the content of the web page.
A related innovation is the emergence of the direct to consumer marketplace which cuts out wholesalers and retailers and allows consumers to interact directly with manufacturers. Moving from proximity sourced product to a direct-to-consumer marketplace would create a $200bn annual revenue opportunity for apparel manufacturers. (Again this is not a new phenomenon as I watch my daughters increasingly purchasing clothing online, often on a try-on and optionally return basis.)
Wide bandgap (WBG) semiconductors let devices operate at much higher temperatures, voltages, and frequencies while being smaller and more reliable. WBG semiconductors have shown the capability to meet the higher performance demands yet enable design of modules that are smaller, faster, and more reliable than their silicon-based counterparts, resulting in improved efficiency when it comes to existing applications such as power chargers, and fully meeting the needs of new emerging applications such as MRI scanning and automotive radar.
In like vein, consumer devices by 2021 could look like a thin and flexible piece of paper through the use of flexible, organic electroluminescent display (OLED) technology. Future devices will enable augmented reality functions which allow users to view and touch objects from different angles in an almost realistic fashion and to use a gyroscope to adjust views and aspects. Consumer media devices could be the focal point of the “connected home”, integrating a variety of services and connectivity into one location.
The use of open source software in robots can accelerate robot penetration by lowering customer adoption cost as the source code is made available to users to amend as they see fit, and usually entitles unrestricted re-distribution to others. This is a benefit to developers in a variety of ways ranging from collaborative development to standardized robotic interfaces.
Epigenetic approaches in cancer treatment could become a $10bn market by 2025. Epigenetic drugs, which can switch genes on and off, may materially increase the percentage of patients likely to experience profound increases in survival in response to immunotherapy. Also on the medical front, new delivery methods will increase the ease and effectiveness of drug delivery for the growing number of people with ocular disease. (With so many developments taking place in the medical arena, I’m not sure why these two received special mention.)
Useful Links
Citi Group Global Perspectives & Solutions: Disruptive Innovations IV
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