And how you can capitalize on the investment
Ric Edelman: It's Thursday, January 19th. You've heard me talk a lot about exponential technologies, but I want to talk about a subset called experiential tech. I'm talking about artificial intelligence, cloud computing, the Metaverse. These breakthrough technologies are helping businesses and consumers function more efficiently. And all of this is going to transform the way we shop, the way we play travel, drive, learn, conduct business, even how we make new scientific discoveries. Some of this will be stuff you've either never heard of or don't understand. Things like the Metaverse or IoT, the Internet of Things. But you certainly know about robotics and AI and e-commerce. There's also cloud computing data centers, cell towers, video games, EA Sports, all of these are part of experiential technologies and they're changing everything about how we work and also about our leisure.
Let's start with big data. Remember when you'd go on vacation, you had a film camera. You can only take 12 pictures, choose carefully, and when you got home, you took them to Fotomat. Remember that you waited two days, you paid $20 and you got two - count them - two copies of each picture. And only then did you realize, dumb ass, you left the lens cap on. Everything was out of focus. Well, now we use our smartphone, right? We take thousands of pictures. We do it for free. We upload them to the entire world to see instantly. That photo, today, it's just a bunch of bits and bytes, data in the form of a digital file. When you upload it, you're sending that data to the cloud via the Internet. How many photos have you uploaded? Multiply that number by the billions of people around the world who are doing the same thing.
All that data that's being generated, it's got to be stored and processed and all of this is happening at an exponential rate. And after all that data gets uploaded, you then want to access it. How often do you access data on the Internet? According to the data, 5,000 times a day. Over the next three years, we're going to be increasing the amount of data we've created, stored and consumed by a factor of three, and then we've got to secure it. So security software is growing 18% a year over the next eight years.
And it's not just stuff we're looking at on our phones, it's stuff we're buying. I'm talking about e-commerce. It's only 20% of retail spending so far. Imagine the growth potential. Frankly, we don't even have to imagine. The folks who study this stuff, they say that global e-commerce, the revenue from that will hit $10 trillion by 2030. That's a 50% increase over retail sales worldwide. Remember, we're at 20% of retail sales is e-commerce. It's going to hit 30% by 2030. Digitized shopping is even forcing retail stores to adapt. We're already seeing contactless checkouts, automated kiosks, and the next wave, which has already started, we're going to have immersive experiences. I'm talking about the Metaverse.
Big Changes Ahead Thanks to the Metaverse, Robotics and AI
Let me try to explain what it is. Picture a digital reality, like a video game that combines social media and virtual reality in a way that lets you interact with people and places and things virtually instead of physically. It's expected to alter the entire digital economy. Online games are projected to be a $350 billion business by the end of the decade.
And then there's robotics. The robotics industry is expanding, and it's not just involved in manufacturing anymore. Robotics are now starting to move into the service sector. Have you been in a restaurant where a robot brings your food? Bots are already traveling college campuses making deliveries. This year, for the first time, sales of robots in the service industry will be more than sales of industrial robots. We're talking about a 6X increase over the next few years in the use of drones for delivering packages. The market for surgical robots will be $120 billion by the end of the decade, - double what it was two years ago.
By the way, these robots are relying on artificial intelligence. Their performance is 10 times better than it was 10 years ago, and it's going to be 10 times better in the years to come. With AI, computers are already better than humans at chess, Go, auto racing, poker. They're being used to write news stories, predict the weather, create art and music. Soon, AI will lead to commercial use of self-driving vehicles, diagnosing diseases, creating personalized courses for education, and leading to more and more scientific discoveries. The projected compound annual growth rate of the global AI market - 36% a year over the next six years.
And it's not enough to create all this stuff. The key is transmitting it to everybody else, no matter who we are or where we are. We're talking connectivity, 5G networks. Those are helping the global market for the Internet of Things grow at a rate of 26% a year for the rest of the decade by 2030. The Internet of Things will be $13 trillion, eight times bigger than it was in the beginning of the decade. This is pretty exciting stuff.
A few tech ETFs to help diversify your portfolio
Does your portfolio have exposure to the companies that are building all of this? How do you capitalize on it? You need to invest in ETFs that specialize in this space. That's why I'm a big fan of Global X ETFs. They offer a bunch of ETFs that give you exposure to the companies in this space:
Global X E-commerce ETF. The ticker is EBIZ.
Global X FinTech ETF. The symbol is FINX.
Global X Internet of Things ETF. The symbol is SNSR.
Global X Cloud Computing ETF. The symbol is CLOU.
Global X Social Media ETF. The symbol is SOCL.
Global X AI and Technology ETF. The symbol is AIQ.
Global X Robotics and Artificial Intelligence ETF. The symbol is BOTZ.
You need to learn about these. You need to ask your financial advisor about these. Your portfolio needs to overweight exponential technologies to invest in the companies of the future rather than the companies of the past. You want to learn more about this notion of experiential technologies. Global X has produced a report that they did in conjunction with the Wall Street Journal. The interactive website is at ChartingDisruption.com and you can get the full report from Global X at their main home page, GlobalXETFs.com.