What Lies Ahead in Disruptive Innovation—and How You Can Benefit, Part I: the Challenges and the Dislocation
Challenges always present opportunities for smart, steady, and observant investors.
The pace of innovation in the technology sector continues to accelerate while having a massive impact at the company, industry, and global levels. Twice during the past several years, I have shared my views on what many refer to as the Fourth Industrial Revolution. My first featured article on the subject, “The Industrial Revolution of the 21st Century” (November 2019), discussed the embedded themes of artificial intelligence (AI), machine learning, and big data, and how every industry is being disrupted by these irreversible trends. My second article, “Innovation, Disruption and Opportunity” (March 2021), provided a historical perspective on past industrial revolutions and why the current one is different.
Fast-forward to the summer of 2022 and a lot has changed regarding valuations, the appetite of private equity for investing in innovation, and what the road ahead may look like. As with any period of rapid innovation, opportunity, and capital formation, the journey takes many turns and is never without challenges. As of the writing of this article, there are a number of factors impacting the pace of investment, valuations, and the futures of public and private companies. I will share our views on the challenges, dislocations, and opportunities that have materialized as a result of this pendulum swing. Having been an observer of capital markets for more than three decades, my perspective is based on personal experience of investing billions of dollars of capital during many dynamic and challenging market cycles.
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