Trends 2017

This is a piece that the team at Davidson Investment Advisors puts together annually and is meant to provide some insight into exciting, disruptive, or otherwise new developments we anticipate being impactful to businesses, consumers and society.

Alternate Reality

Virtual reality (VR), a completely fabricated reality, entered the mainstream during 2016 with the launch of the Oculus Rift, HTC Vive, PlayStation VR, Gear VR, and Google Cardboard. Augmented reality (AR), or the overlay of data on top of your current world view, has been in existence for many years through heads-up displays and Google Glass (see our 2016 trend “GUI to NUI”). Mixed Reality (MR) is still in its infancy, and lies somewhere between AR and VR, projecting fabricated elements on to existing real world structures and spaces. The most advanced MR technologies are Microsoft’s HoloLens and a company called Magic Leap, backed by Google, Qualcomm, and Alibaba. The magic of VR is “presence”, or the ability to trick your brain into believing it’s somewhere it’s not. VR has so far been relegated to entertainment. AR has been more focused on utility, overlaying information on to the real world, allowing the perception of both synthetic light and natural light bouncing off objects. Mixed Reality is the best of both worlds and could potentially have the most obvious path to mainstream consumer adoption. MR overlays completely synthetic visuals and anchors them in the real world, allowing a shark to swim through your kitchen for example, or displaying a three-dimensional castle on your desktop that you could walk around to explore. MR clearly has applications in entertainment but can also be used to create virtual computer desktops on any surface, allows for three-dimensional design work, or even aiding surgeons while working in patients. There are also implications for electronics, real estate, employment, industry, and media.

Fake News

Fake news is the deliberate publishing of misleading information, propaganda, or deception – typically via social media – with the hope of driving web traffic for either financial or other gains. Some describe it as a form of psychological warfare, especially if it is coming from foreign governments. It is a consequence of the polarization of society as people begin to feel – and then believe – that mainstream media (MSM) no longer reports information in a balanced, unbiased way. Debate is normal in a society, but for debate to be productive a common basis of fact needs to be established. Historically, MSM played an important role in searching out those facts. They have editors and fact checkers to verify the information they report. If they are wrong, which is not uncommon, they correct or retract it. As a reward for their effort, MSM gains credibility; however, if they are wrong, they can be held liable and sued. The major social media platforms are beginning to address the issue primarily through use of algorithms and factchecking services. What isn’t known is if they will publish corrections or retractions. What’s at stake for society is its ability to find consensus and adapt to changes in a timely manner.

Quantum Computing

In traditional silicon computers, data is represented in binary bits that are always in one of two states: either a 1 or a 0. However, in a quantum computer each quantum bit, or “qubit,” can represent both a 1 and a 0 at the same time through a principle called superposition. What this means is that a quantum computer can perform multitudes of calculations simultaneously; harnessing millions of qubits could, in a matter of minutes, process data and solve problems that would tie up today’s fastest supercomputers for a century.

Since 2016, when we first began tracking successful experiments of quantum computational operations executed on a very small number of quantum bits, more companies (such as Alphabet, IBM, Microsoft, and Nokia Bell Labs) have been moving from the lab to engineering development and even commercial experiments. The implications of large-scale quantum computers will be staggering. With such orders of magnitude improvement in computing power expect to see leaps forward in machine learning, artificial intelligence, and simulation modelling. At the same time, quantum computing could pose a threat to traditional encryption security measures that operate on the fundamental assumption that the encryption is too complex to break in a reasonable amount of time given prevailing computing speeds.

While it’s still early days and many challenges exist in the development of Quantum Computing, we cannot help but imagine the possibilities which could have a fundamental disruptive impact on the current technology market as we know it.