Ark Invest has 11 Big Ideas for 2020. However, Five Ideas are clearly the biggest. AI and Sequencing will supercharge biotechnology for nearly $10 trillion in impact by 2024.
$5 to 10 Trillion in Market Value by 2025:
Biotech R&D Efficiency — The Convergence of Technologies in Healthcare. Improvements in R&D efficiency could add $9 trillion to the market capitalization of therapeutics companies during the next 5 years. Sequencing, Editing and AI will make biotech more productive and profitable.
Autonomous Ridehailing — Autonomous ridehailing should debut a year later than previously expected in 2021-2022. ARK’s research suggests that the 10-year net present value (NPV) of its cashflows is more than $1 trillion today and should hit $5 trillion by 2024 and $9 trillion by 2029. Winning companies in self-driving taxis will be worth $1-2 trillion from this portion of their business. The self-driving technology platform companies will be the winners.
Electric Vehicles is projected to have $1.1 trillion in revenue with 37 million electric cars sold in 2024. There were about 2 million electric cars sold in 2019. Strong profit margins could make the market capitalization of the electric vehicles companies higher than the revenues. Technology business trade for as much as 10X revenue.
$1-3 Trillion in GDP or Market Value Impact Around 2025
Deep Learning — $30 trillion to stock market value by 2037. This would be three times more than the first 20 years of the internet. Ark estimates that Deep Learning has created $1 trillion in market value so far. Internet, Deep Learning and IT have a market value of about $14 trillion today. They project the three components will combine to be about $51 trillion in market value. $30 trillion AI, $20 trillion internet and about $1 trillion in regular IT. Although the $30 trillion figure is bigger it is not until 2037 while Biotech supercharging and electric cars add trillions by 2025.
Automation — Increased Productivity and More Jobs. ARK’s research predicts automation will add $800 billion to US Gross Domestic Product (GDP) by 2024, and potentially $12 trillion by 2035. By 2035, US GDP could hit $40 trillion. This will be nearly 40% higher than would be the case without automation, compounding at a 2.4% growth rate instead of 1.8%. There is also trillions in impact in China and other countries. The global impact will be 3X or more higher than the US GDP impact.
Digital Wallets — The Transformation of Banking. US digital wallets could be valued at $800 billion by 2024, 27x the $29.5 billion in the US today. China has vastly higher mobile payment transactions than the USA. China’s mobile payments are already at $14 trillion per year.
Next Generation DNA Sequencing — The Transformation of Oncology. Whole human genomes sequenced will increase from 2.6 million people today to over 100 million in 2024. Sequencing will be a $20+ billion business in 2024 but its impact on medicine will be far larger.
Streaming Media — This will 4X to $390 billion in 2024.
Bitcoin — $3 trillion in network value for Bitcoin. There is no specific date for this result.
3D Printing — 3D printing will grow from $10 billion in 2018 to $97 billion in 2024 at an average annual rate of 65%.
Aerial Drones — A Cost Saver and Potential Life Saver. Estimated $327 billion in revenue in 2030.