Disruptive innovation is the launch of a new product or service that permanently alters the environment of an industry by bringing ease, comfort, and accessibility to it while also lowering costs.
Disruptive innovation is critical to development, providing investors with powerful portfolio diversification and long-term growth opportunities in a slow-growth world. Investing in companies that are changing the way the world operates and making it a better place offers investors powerful portfolio diversification and long-term growth prospects in a slow-growth world.
The five megatrends can be resolved or accelerated using new technologies. To address large-scale challenges (e.g., ageing economies, climate change), breakthrough innovation is needed, but new technologies are also being developed to address relatively minor issues (e.g. Payments, streaming). This environment has been ideal for technological innovation and thematic investing.
Disruptive innovation is most likely to emerge in two scenarios:
A new and unique solution is developed to resolve a significant constraint or challenge.
New entrants are drawn to industries with wide profit margins and high returns, resulting in the development of better alternatives in developed markets.Globalisation and the pervasiveness of technology have made breakthrough technologies more powerful in recent years. Together, they have lowered entry barriers for new competitors and accelerated the adoption of new technologies around the world, thereby unleashing a wave of disruptive opportunities across industries and economies. As such, technological growth has become exponential.
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