Saturday, 12 January 2013

The Technology boom - too late to get on board or is it just beginning?

Every time I try and think of something to do with my life, it invariably gets countered by thoughts of 'that thing is now done in the cloud', or reading about places where factories are now operated by 12 robots rather than 100 people.

Yep, technology continues to interfere and change the game in all our lives. Earlier in the week another high street retailer died (Jessops) as a result of a technology change. Who needs cameras? Everyone. Why don't they buy them anymore? They do is the answer, it's just they buy them connected to phones these days. And anyone with any real requirement for a high end camera does their endless research online and then buys from the cheapest source with the best warranty. Jessops is just one example of technology affecting change in our lives. Look at the music industry and how much life has changed for record companies and music shops even just over the last 10 years. With the digitisation of music and movie files, there's no need to have shops on every street of every town selling the latest cd / cassette / vinyl album. Everything can be delivered online and instantly.

But are there any useful technological advancements happening?

Yet for all the technological advancements going on it is hard to think of any relatively useful ones in the last few years. I can only think of the internet (and the proliferation of information) and satellite navigation that have truly changed the world (think back just 10 years ago - travelling anywhere was all about getting lost, map books on the passenger seat, panicked phone calls and planning routes days in advance). Both of these innovations are more than 15 years old now. The majority of other tech changes seem to be all app and internet based frippery, or miniaturisation of already existing equipment. It seems the world's geniuses are being swallowed up by the Facebook, Google, Apple and Microsoft monoliths who all basically compete in the same reasonably narrow and dull field of information technology.

Where are my flying cars?

As is oft mentioned in the world, by now we should really have been enjoying the benefits of flying cars, robot butlers, holograms, fusion power, etc. Blade Runner was set in 2019 - it had flying cars - just 6 years in our future, yet they still seem so far off. At the 1984 LA Olympics a flight suited chap with jet pack whizzed over the Coliseum and landed on the track. That was 29 years ago. These things should be everywhere by now. Here's the coolest named band in the world:

There was a good article recently at something called Pando Daily (stupid name) which was trying to list some of the most promising 'real world' technological advancements. It came up with:

A flying car - which was a plane with wheels and frankly ridiculous.
Electric cars - which have been with us for god knows how long but are still basically crap.
Solar panels - what? Was this guy born yesterday. Solar panels have been on people's roofs since I was a boy.
A rocket that can fly for 29 seconds - NASA probably have this on repeat in their office just for laughs.

But for all the useless inventions on the cards, there is reason to be truly hopeful that technology can and will change our world for the better. Here's a few:

Google have recently had their driverless car licensed to be used in most of California.
These cool robots can figure out what what is useful trash from our rubbish, and therefore how to turn trash into cash.

I recently had the pleasure of seeing Futurologist Mark Stevenson speak at a car manufacturer's conference. He talked of the real advancements going on in the world, such as 3D printing (see here for plenty more on the subject), carbon neutral fuel generation including companies like Air Fuel Synthesis, human genome sequencing and the benefits of stem cell organ generation.

Obviously all these cool things are going to render loads of us unemployed. eg. Driverless cars are going to replace taxi and truck drivers. But unless a truly socialist / communist government arrives and demands we head back to the stone age, there is little point fighting the change. So embrace it, invest in it and try and make some money from it.

So my investing theme for the 2010s is to put money into technology. 

Well, food, technology, water, and demographics. But this article is about technology and as I'm trying to go down the passive investing angle these days and work less on managing all those shares then it's best to leave the picking of these next big thing stocks to the market. Here's a look at a few ways to buy into the technology world.

L&G Technology Tracker - possibly too dominated by Apple, which appears to have had its day, but as all good index trackers should operate, this will obviously be replaced by other up and coming companies. It has a ridiculously high TER of 1.15% but appears to be the only index tracker available on the UK market. Alternatively you could choose Herald Investment Trust or Polar Capital Technology Trust. All three however are focused just on information technology.

You could also look at iShares Global Clean Energy ETF which tracks an index of 30 clean energy companies. However, as you can see it has been an excellent way to lose money so far!

As to future biotech innovations, you could try Franklin Biotechnology Fund or International Biotechnology Trust. Both have decent track records and you have to hope that they have truly clever people there doing the research and buying into the next big thing.

However, there really doesn't appear to be a way to invest in a trust or fund that buys into the future technology of the world. For some alternative ideas you could look at IP Group, which spins startups out of UK universities or Oxford Catalysts which is doing clever stuff with fuel processing.

If you've got loads of money and want to risk it all, you could opt for one of the Enterprise Investment Schemes (EIS) like Parkwalk's Technology Fund., which invests in Cambridge University startups, or its Oxbridge rival Oxford Capital Partners similar Gateway funds that support Oxford university startups. Not for the faint of heart, nor the non-wealthy, they are a way to buy into possible future technology successes.

Alternatively, you could get all international and choose to buy into IBM, General Electric or 3M in America. All have a decades long track records of innovation.

Here's the coolest use of new technology I've seen for a while. 

The Terminator looks more and more like a documentary every day!