Halfway through the 2020s, technological advances that may have seemed unfathomable just a few years ago are now commonplace.
Take the most obvious example: generative artificial intelligence. It’s been hailed as the most disruptive invention since the smartphone after demonstrating remarkable capability for a range of tasks that required human execution only two years prior.
Meanwhile, super-targeted cancer treatments and blockbuster obesity medicines have resulted in major changes to the way that long-standing ailments are treated. The resulting increased lifespans and longevity bring opportunities and challenges to economies, markets and investors.
“Factors from demographics to decarbonization are driving rapid technological diffusion, as the search intensifies for solutions to humanity’s most pressing concerns—including immense power needs, the effects of increasing global longevity and a reskilled workforce for the future,” says Ed Stanley, Head of European Thematic Research at Morgan Stanley. “This could spur serious innovation in key areas that leads to new products and markets, especially as more advanced AI is deployed.”
As investors and consumers alike wonder what technology will upend industries and daily life by 2030, Morgan Stanley Research analysts are watching the following areas with potential for the biggest breakthroughs.
Markets & Economy
Humanoid Robots: Labor shortages caused by long-term demographic shifts, along with significant advances in large-language models and generative AI, are expected to drive the development of so-called humanoids. These advanced robots with AI-powered “brains” and people-shaped hardware could reach 63 million units by 2050, potentially impacting $3 trillion in wages, especially in farming, food preparation, logistics and manufacturing.
What investors should know: Investors may find opportunity in sectors and companies that are developing humanoids and their key components. They could also look at industries struggling to attract enough workers to remain productive, which could benefit from integrating humanoids into their labor force.
Multi-Earning Agents: Generative AI is already proving a significant differentiator for the 5% of the population who work more than one job or have multiple earnings streams. A Morgan Stanley Research survey showed that multi-earners who use generative AI tools to enhance their productivity or efficiency make an additional $8.50 per hour, representing 21% higher earnings, than those who don't. Multi-earning in the U.S. has risen 11% in the past year, the survey shows, with the figures for content creation and ecommerce up 7%.
What investors should know: The multi-earner era is an evolution of the gig economy and centers on platforms that offer avenues to earn money outside of traditional employment streams, including social media, gaming, shared mobility and vacation rentals. Analysts estimate that income from multi-earning could top $1.4 trillion globally, with generative AI adding $300 billion of that figure, by 2030.
Healthcare
Obesity: New medical studies and shifting perceptions have helped make the case for a new class of weight-management drugs that have been shown to treat a host of ailments related to obesity, such as heart disease. Demand for obesity drugs has skyrocketed—analysts expect the global market to reach $105 billion by 2030—with signs of upside taking hold: The U.S. is making gains in terms of life expectancy relative to healthcare dollars spent, compared to other developed nations.
What investors should know: Leading pharma companies may see obesity drug prescriptions grow at an annual average rate of about 25% a year through 2028. However, the appetite-suppressing drugs could also dent packaged food companies as people eat less overall and shun less healthy choices.
Smart Chemotherapy: Cancer is responsible for about one-fifth of the world’s deaths each year, making it the second leading cause of death after heart disease, with expectations that it could become more prevalent as people live longer. A new breed of cancer-killing drugs that target tumor cells while sparing healthy cells could help transform cancer treatment and create a $140 billion global market by 2040 from roughly $5 billion in 2022.
What investors should know: Large biopharma companies that are investing in smart chemo and acquiring smaller specialized firms to boost their portfolio may benefit, as could contract development and manufacturing organizations (CDMOs) that support the pharma industry. Analysts expect companies globally to compete in the smart chemo market, with the majority of clinical trials over the past two years originating in Asia, followed by the U.S. and finally Europe.
AI-Assisted Fertility: Policymakers in developed nations have been concerned for some years about the fact that people are having children later in life, as declining fertility rates have long-term economic repercussions. In the U.S., for example, people under 30 reported a 26% decline in interest in having a child compared with this same age cohort in 1983, while overall fertility rates have dropped by half in 20 years. At the same time, one in six couples has trouble conceiving; as a result, interest in egg freezing and in vitro fertilization (IVF) have increased, particularly since the COVID pandemic. AI can improve the success rate of embryo selection in IVF treatments, with accuracy of 78% compared with the current rate, which ranges from 13.8% to 66.3%.
What investors should know: While other areas of medical innovation, such as obesity drugs, may have more buzz or market potential, analysts believe AI-assisted fertility treatments may have lower regulatory hurdles to clear and the potential to capture more and more patients over time.
Energy
AI Sovereignty: In a multipolar world where national security has taken precedence over the efficient flow of goods and services, nations are rethinking and rebuilding supply chains to secure critical components to stay relevant in industrials, renewable energy and technology. In particular, power-intensive generative AI has increased the urgency of friendshoring, nearshoring and reshoring of semiconductor production and other raw inputs. Access to these resources will be essential as governments aim for the panacea of so-called AI sovereignty—the ability to build and run independent AI systems.
What investors should know: Demand for data centers should continue growing, bringing opportunity to companies that build computing power infrastructure, as well as property owners that specialize in industrial and logistics facilities. This growth will require power companies to upgrade generation and transmission capabilities, which could benefit several segments of the power sector.
Negative Power Prices: Wind and solar energy have made vast improvements in generation capabilities over the years, but unfortunately inadequate and insufficient storage have meant power captured at peak times can far outweigh demand, leading to what’s known as negative power prices. While that may be good for consumers in the short term, an increase in the once-rare phenomenon has made the need for sustainable battery storage more pressing.
What investors should know: The growing prevalence of negative power in Europe could impact returns for renewable developers and dampen investor interest in new projects while battery storage development progresses.
Nuclear Renaissance: After more than a decade of decline, nuclear power is coming back in favor as the world races to meet ambitious climate goals and address the soaring energy needs of generative AI. In fact, Morgan Stanley Research estimates that nuclear power is poised for a renaissance that could draw $1.5 trillion in capital investment through 2050. Analysts estimate that the share of global energy supply from nuclear power plants could reach 17% over the next decade and a half, up from 10% currently.
What investors should know: Nuclear energy’s comeback could benefit everything from uranium mining and nuclear power generation to physical infrastructure and waste handling, though investors should keep in mind regulatory hurdles and the history of cost overruns and long construction times.
Transportation
Autonomous Vehicles: Automation in vehicles has been on a journey, with features like hands-free driving, automatic emergency braking and lane control leading toward the ultimate destination of full self-driving capabilities. While broadly available autonomous vehicles are some distance away, analysts think the first vehicles that are fully automated under all conditions could be on the road by 2030 and by 2050 could be logging more miles travelled than partially automated versions.
What investors should know: Investors should note weekly trips and miles driven as metrics for developers of autonomous driving technology. Meanwhile, companies that build embodied AI components could also provide opportunity, since vehicles with some autonomous features that require driver control will likely remain dominant for many years.
