ARK's Big Ideas 2024: 14 Innovation Trends with Exponential Growth Potential

The five innovation platforms and technology catalysts cover the 14 big ideas in the 2024 report:

1. Technological Convergence

2. Artificial Intelligence

3. Bitcoin

4. Smart Contract

5. Digital Consumers

6. Digital Wallets

7. Precision Therapies

8. Multiomic Tools & Technology

9. Electric Vehicles

10. Robotics

11. Robotaxis

12. Autonomous Logistics

13. Reusable Rockets

14. 3D Printing

In this article Moomoo will provide an overview of the first four big ideas - Technical Convergence, AI, Bitcoin, and Smart Contract.

According to ARK's research, convergence among disruptive technologies will define this decade.Five major technology platforms - Artificial Intelligence, Public Blockchains, Multiomic Sequencing, Energy Storage, and Robotics - are coalescing and should transform global economic activity.

Technological convergence could create tectonic macroeconomic shifts more impactful than the first and second industrial revolutions. Globally, real economic growth could accelerate from 3% on average during the past 125 years to more than 7% during the next 7 years as robots reinvigorate manufacturing, robotaxis transform transportation, and artificial intelligence amplifies knowledge worker productivity.

Catalyzed by breakthroughs in artificial intelligence, the global equity market value associated with disruptive innovation could increase from 16% of the total to more than 60% by 2030. As a result, the annualized equity return associated with disruptive innovation could exceed 40% during the next seven years, increasing its market capitalization from $19 trillion today to roughly $220 trillion by 2030.

With superhuman performance on a wide range of tests, AI models like GPT-4 should catalyze an unprecedented boom in productivity. Jolted by ChatGPT’s “iPhone” like moment, enterprises are scrambling to harness the potential of artificial intelligence (AI) according to ARK’s research.

AI promises more than efficiency gains, thanks to rapidly falling costs and opensource models. If knowledge worker productivity were to quadruple by 2030, as we believe is likely, growth in real GDP could accelerate and break records during the next five to ten years.

According to Wright’s Law, improvements in accelerated compute hardware should reduce AI-relative compute unit (RCU) production costs by 53% per year, while algorithmic model enhancements could lower training costs further by 47% per year. In other words, the convergence of hardware and software could drive AI training costs down by 75% at an annual rate through 2030.

Coding assistants like GitHub Copilot and Replit AI are early success stories that have boosted the productivity and job satisfaction of software developers. AI-powered assistants are increasing the performance of knowledge workers and, interestingly, benefiting underperforming workers relatively more than high performers.

Bitcoin has outperformed every major asset over longer time horizons. During the last seven years, bitcoin's annualized return has averaged 44%, while that of other major assets has averaged 5.7%.

According to ARK's research, the role of Bitcoin in investment portfolios is growing:

Historically, bitcoin’s price movements have not correlated highly to those of other asset classes. During the past five years, the correlation of bitcoin’s returns relative to traditional asset classes has averaged only 0.27.

Focused on the volatility and return profiles of traditional asset classes, ARK’s research suggests that a portfolio seeking to maximize risk-adjusted returns would have allocated 19.4% to bitcoin in 2023.

Deployed on public blockchains, smart contracts offer a global, automated, and auditable alternative to rent-seeking intermediaries and legacy financial infrastructure.

In the aftermath of the “crypto crisis” in 2022, several digital asset solutions gained traction, including stablecoins, tokenized treasury funds, and scaling technologies.

According to ARK’s research, as the value of on-chain financial assets increases, the market value associated with decentralized applications could scale 32% at an annual rate, from $775 billion in 2023 to $5.2 trillion in 2030.

Smart contracts could facilitate the origination, ownership, and management of on-chain assets for a fraction of traditional financial costs. If financial assets were to migrate to blockchain infrastructure at a rate similar to the adoption of the internet, and the take rates associated with decentralized financial services were a third those of traditional financial services, smart contracts could generate annual fees of more than $450 billion.

Source: ARK Invest