The first gene-edited approved drug (treating sickle cell anemia) is the first commercial rewriting of human genomes. Is this a new “Golden Age” for medicine? There is great promise, and the potential to treat unmet medical needs, scale dramatic innovations to commercial applications, and transform life sciences is enormous. Since every medicine is an intersection of scientific, technical, and clinical understanding, many new treatments are suddenly arriving because of the convergence of dramatic advancements in science, technical knowledge, and clinical results. Modern medicine is witnessing a transformative era of groundbreaking innovations and technological advancements. We are witnessing a renaissance in drug treatment driven by innovations in immunotherapy, weight management, vaccine development, gene editing, and AI. These advances reshape medical treatments and fundamentally alter our approach to health and disease. As these technologies mature and their applications broaden, the future of medicine holds unprecedented potential for improving human health and longevity. A golden age – with a bit of hype.
Our most intractable problems cannot be solved with behavior modification, conservation, or our existing technology, regardless of its advanced or widespread applications. Only new knowledge creating innovative solutions can address our most intractable problems. This can only be achieved through basic scientific discoveries and then combining these discoveries with enterprise-based innovation, commercial discipline, and competition. Innovation, creativity, and competitive dynamics create the most effective innovations, the best solutions, and the most sustainable companies. Developing the best public policy as well as the best structure to enable innovative and creative solutions, as well as the economic incentive to scale these opportunities and make them economically sustainable. Central planning, bureaucratic industrial policy, government-led economic management, and dictatorial focus have always failed, and always will.
Discovery, innovation, and practical application are never a straight line and, the best analogy is “the broken road.” Our greatest discoveries and advancements have confusing, uneven, and broken pathways that often lead somewhere astonishing – even though at the outset the initial steps could never envision this as a final destination. Artificial intelligence is the embodiment of this concept. A powerful tool that can lead anywhere given the imagination and unlimited creativity of its users. There may be nowhere more impactful, generating therapies for unmet medical needs in record time, than artificial intelligence’s ability to mimic evolution in minutes. The real outcomes are still unpredictable, but the potential is unfathomable. AI languages that produce pictures seem to be initially relegated toward a combination of Tik-Tok influencers, outraged artists, and those with limited imaginations and creative skills. But now, AI-generated pictures can use text to direct specific protein designs with properties of shape, size, and/or function that make it possible for these new proteins to perform specific tasks on demand. This breakthrough may lead to more efficient and effective drug development and, the discovery in minutes of what evolution would otherwise have taken millions of years to develop.
Most current innovations have yet to reach their potential, and new innovations are essential to address the most critical issues we confront, whether that is climate change, food scarcity, water shortages, or more effective distribution of innovation itself. Advanced technologies can be many things, but several areas, including artificial intelligence, life sciences, and software innovations provide the most potent platform for new opportunities, disruptive innovation, and value creation. Software will disrupt the most important industries in the world, especially finance, life sciences, and communications. These will be the fundamental innovations that will drive value creation over the course of the next year, and from now on.
This book explores the next decade’s more frequent and intense economic, geopolitical, fiscal, and market volatility, technological innovation, disruption, and hype.
Long-term opportunity exists, and this book uses a 10-year horizon as a surrogate for a long-term perspective. Some of the world’s most important industries are being disrupted, especially finance via digital assets and Blockchain-based businesses, life sciences via gene editing, DNA sequencing, and CRISPR, and communications via advanced wireless data networks, software technologies including artificial intelligence, and new interactive platforms such as the Metaverse.
The onslaught of market-making bad news seems almost a daily event. A gloomy picture of slowing economic growth, elevated inflation, and confusing fiscal and monetary policy has added a lethal mixture to the market’s performance. Fiscal stimulus is sidelined, and monetary policy is constricting economic growth and entrepreneurial innovation. It makes for a gloomy outlook and an even more depressing long-term perspective. The next 10 years look more like a lost decade. High-growth company valuations have been significantly discounted, and over time as discount rates drop, their valuations are likely to increase substantially. Higher-yielding fixed income securities will be a standout performer as interest rates are reduced, the higher-yielding BDCs, REITs, leveraged loan securities, and high cash flow instruments, along with high-dividend equities, will prove extremely attractive and are currently available at bargain prices. Providers of value and users of value will be the winners for the next decade. Those generating real cash flow and disruptive innovation will define the next decade.
Innovation is unpredictable and astonishing – it can address the world’s most critical issues today, from hunger to efficient energy, to devastating diseases. It is also too often misguided, inefficient, and meaningless – creating nothing more than distractions and wastes of time cloaked in an image of technological wonder. Misguided and manipulative business plans sit side-by-side with the groundbreaking disruptions that may address society’s greatest problems.
Remarkable things can happen. Or not. Can we solve climate change, food shortage, limited healthcare, and other global stresses – all with TikTok videos? Innovation is unpredictable and astonishing – it can address the world’s most critical issues today, from hunger to efficient energy, to devastating diseases. It is also too often misguided, inefficient, and meaningless – creating nothing more than distractions and wastes of time cloaked in an image of technological wonder. Misguided and manipulative business plans sit alongside the groundbreaking disruptions that may address society’s most significant problems. We don’t have time. Even though there is no clear argument for resources going to a new video-sharing platform or immersive game, that is beside the point. Technology delivers something, nothing else can. It is the only way to find solutions to otherwise intractable and potentially devastating global crises. The freedom to pursue solutions is the essential first step. Letting the best people do their best is still the best policy. It will also generate the best outcome.
Transformation, or euphemistically, “disruption,” creates great opportunities to capture newly created wealth. But, as industries are transforming and strategic disruption is occurring, quite a lot of absurdity and certainly enough terror are associated with some of these extraordinary opportunities to require much greater analysis and understanding.
There are extraordinary risks associated with anything disruptive and transformational. The first disruptor isn’t always the one who creates the most value or is even a sustainable competitive entity.
Innovation does not mean competitive sustainability. Digital platforms, ranging from the internet to digital assets and cryptocurrency are transforming industries globally. But, along with that comes a lot of hyperbole and typically that is followed by very little substance. Great companies use technological disruption, innovation, and transformation to establish themselves and thrive. But they rarely last. Every company, even the most valuable companies such as Apple, Apple, Amazon, Facebook, Netflix, etc. must dynamically transform to stay competitive and valuable.
Transformations are certain. New entities will become very valuable, legacy companies will diminish, and a handful will transform and thrive.
Transformation and sustainability create and capture great wealth, but are far more challenging to identify, and even more challenging to sustain.
While messenger RNA (mRNA) has been catching recent headlines thanks to its ability to fight Covid, the combination of a global pandemic and the miraculous mRNA vaccine development in less than one year (when typical timelines approach 10 years) has made mRNA life science’s overnight sensation even though the underlying scientific knowledge is based on discoveries from over 20 years ago. Still, mRNA has the promise to disrupt life sciences and drug development and create enormous economic value.
There are fantastic fortunes to be made in mRNA technology. Moderna and BioNTech have created over $100 billion of value collectively, as of February 2022. That kind of value creation will not be ignored by a combination of firms within an industry with hundreds of billions to invest. There will be an incredible future of development, capital availability, and industry focus until all potential options are exhausted. But, mRNA has a fantastic future, even if it ultimately lives only in labs and R&D centers spread around the globe. It will become an area of focus for every major pharmaceutical company and most biotechs in some form from now on.
Artificial intelligence, while generating powerful tools for analysis, is only the beginning of a more ambitious phase making AI systems more accurate, less biased, and effective prediction tools. Gathering more and more raw data does not create value. One cannot simply push a button and have valuable output generated. Data needs to be collected, processed, stored, managed, analyzed, and visualized – only then can we begin to interpret the results. Each step is challenging, and every step in this cycle requires massive amounts of work and value-added tools. It’s not just the software and hardware artifacts we produce that will be physically present everywhere and touch our lives all the time, it will be the computational concepts we use to approach and solve problems, manage our daily lives, and communicate and interact with other people. It will be a reality when it is so integral to our lives it disappears. The problems and solutions we address are limited only by our own curiosity and creativity.