Converging technologies and the industrial renaissance

A convergence of disruptive technologies is looking set to reshape entire industries, creating new investment opportunities as this industrial renaissance unfolds.

The use of artificial intelligence, in combination with other technologies, is accelerating the pace at which new applications emerge, with the potential to disrupt existing industrial and market structures. That is making it ever more important for industries to restructure themselves around those technologies, said Cathie Wood, Founder and CEO at Ark Investment Management, in a panel discussion at the HSBC Global Investment Summit 2025.

Consider autonomous or self-driving vehicles as an example. They are born out of a convergence of robotics, battery storage systems and AI. The progress so far is driving expectations that such vehicles will lead the automobile industry into a new paradigm. Just autonomous taxis could grow into a USD8 trillion to USD10 trillion global opportunity, from almost nothing today, Ms. Wood said.

AI is similarly interacting with technologies in other business areas and fueling hopes of an industrial renaissance. The winners in this converged world will likely take a lion’s share of the transformed industries. Who they are will probably be determined by companies that can learn and master the technology faster, as well as by their ability to drop costs.

Ms. Wood cited the example of Chinese electric vehicle maker BYD, whose sales have rapidly grown in recent years while EV prices declined, as the reason “we are moving down these cost curves faster than would otherwise be the case.”

Revolutionary medicine

Healthcare is another area where the convergence of technologies is fueling rapid changes, which are in turn creating new investment opportunities.

“I think healthcare is going to be one of the most exciting places to invest after being one of the treacherous places to invest during the last 10 years,” Ms. Wood said.

Medical research and drug discovery have progressively improved over the past few decades and made it possible for us to experiment today with genetic engineering, where a person’s genes are altered to correct hereditary disorders or enhance the body’s ability to fight disease.

“I think we are in the very early stages of a revolution in medicine,” said Jean Hynes, CEO and Managing Partner at Wellington Management.

The advancements so far are fueling hopes that we’ll be able to see fewer people affected by heart disease, a reduction in hip- and knee-replacement cases within five years, and declines in the cases of cancer or Alzheimer’s within a decade.

Investment strategies

For investors, the rapid pace of technological changes means investors are asking questions about how they should diversify their portfolios, especially given the concentration of the US stock market. The proliferation of AI and its use cases is raising the need for investors to evaluate which companies are going to increase their productivity, and how that would affect earnings and stock prices.

“AI has the potential to impact every company in the world” Ms. Hynes said.

Technological convergence is also likely to change the investment world in other ways. Traditional asset managers, who are currently organized by sector or industry, will likely need their analysts from different sectors to collaborate to have a better understanding of any industry.

Lisa McGeough, CEO and Head of Banking, United States at HSBC, who moderated the panel discussion, emphasised the importance of ensuring that internal teams are properly organized.
“We can’t think in silos anymore. We have to think cross-functionally,” McGeough said.

Democratising access

Jenny Johnson, President and CEO at investment manager Franklin Templeton, said AI and blockchain-related applications were among the most disruptive forces in financial services.

Blockchain, which helps record transactions and track asset ownership through a digital, immutable ledger, is a technology that is at the heart of smart contracts and tokenisation. The ability to create digital tokens of ownership for real-world assets, in particular, is seen holding immense potential.

Consider the case of Rihanna, for instance. The popular music artist has sold 300 non-fungible tokens for USD210 each in a transaction that gives the owners of those tokens the right to earn a fraction of the streaming royalties to a song. Such tokens are increasingly being created to own other assets, including art and real estate, and also as collateral to borrow funds.

Ms. Johnson said that for greater use of digital tokens to happen, the cost of transactions needs to be lower and an exchange of liquidity has to be created.

Still, people are not focused enough on tokenisation today, and it has the potential to “democratise" the investment world by giving individuals access to a whole series of investments that were not even imaginable so far, Ms. Johnson said.