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The 4th Revolution: Two-and-a-Half Centuries of Innovation

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One thing we know for sure about the financial markets is that no matter how far they fall, they always recover. With stocks severely discounted by the coronavirus crisis, there is no better time to buy than now.

The 4th industrial revolution is just beginning to take form as our economy evolves. The world is becoming increasingly computerized and technology is driving economic growth.

The world’s most valuable firms have shifted from predominantly energy companies to primarily tech companies over the past 40 years. 

The technology sector itself is becoming increasingly difficult to define, with every major enterprise digitalizing its product offering in some way. Computers have taken over our economy with cloud computing, big data, the internet of things, and artificial intelligence (AI) seeming to be the underlying technologies that are defining our contemporary industrial revolution.

The most recent market breakdown has provided us with an excellent buying opportunity to upgrade our portfolio with high-quality next-generation companies. The usefulness of advanced technology is being illuminated during this coronavirus quarantine. The ability to work, communicate, and even order groceries remotely is a product of this advancing technological wave.

To understand where we are today, we must look back at the road that led us here. To understand the 4th industrial revolution, we must examine the prior 3. 

1st Revolution

The 1st industrial revolution started in the mid to late-1700s with the steam engine, which has been the framework for energy sources since. Mechanization was also an underlying theme, with huge leaps and bound made in textiles that changed the sale of cloth from small street vendors into a global industry.

This revolution was an enlightenment of innovative thinking that stimulated the next two and a half centuries of prolific advancement in technology.

2nd Revolution

The 2nd industrial revolution began in the late 1800s, and can be symbolized by modern electricity, the light bulb, and Henry Ford’s assembly line. We all hear about Benjamin Franklin’s discovery of electricity back in 1752, with the kite and key experiment that not only shocked him but the entire world.

Thomas Edison was the first one to be able to harness this power and distribute it with the first coal power station called the Edison Electric Light Station, which opened in 1882 in London. The first power plants were used only to power light bulbs, but as we know, power uses have gone far beyond this.

Nikola Tesla’s invention of alternative currents (AC) in 1888 further revolutionized electricity making it more efficient and allowing it to travel much further distances. AC is the type of electricity that powers almost everything today. Tesla, Inc was named as such to honor Nikola Tesla and his development of the first AC motor, which powers these electric vehicles 130 years later. 

Digital Revolution 

Electricity was the stepping stone needed for the 3rd industrial revolution, also known as the digital revolution. The shift from analog technology to digital electronics began in the mid-20th century and redefined everything the world thought they knew. This marked the beginning of the information age.

This was the age in which the computer was invented, and the era that the internet was born. We have all been alive through this era and have become accustomed to the rapid evolution of technology, which has only seemed to accelerate with time.

The internet’s ability to obtain, hold and create information has changed the world in which we live in. Information is so readily available that whenever a disagreement arises, the phrase “Google it” will generally be mentioned in the first 10 seconds, and the argument can be resolved in the blink of an eye.

The computer and the internet have both laid the ground work for the next industrial revolution. A revolution that will once again change the world.

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4th Revolution

The 4th industrial revolution is just commencing, and technological advances are already accelerating past most people’s understanding. This is only the beginning. Once the development of AI hits a critical stage, information and technology will proliferate incomprehensively.

The number of people on the internet has grown to 4.5 billion or just less than 60% of the world’s total population. This is nearly double the number of internet users only 5 years ago. People around the world are increasingly relying on the internet for software and storage, creating a massive market for cloud computing.

Today, 3.3 billion people have a smartphone and roughly 9 billion mobile devices, with the internet of things (IoT) devices surpass mobile phones (according to BankMyCell). The IoT devices include any smart tool from smart homes to smart meters. The market for such devices is only expanding as the computerizing world advances.

As the world rapidly digitalizing, the creation of information accelerates. Ostensibly 90% of the internet’s data has been created since 2016 (according to an IBM study). This data is often unstructured and has created an enormous opportunity for big data firms to make this information valuable.

Put Your Money Into The Future

The coronavirus driven market crash has discounted stocks across the board, creating one of the few great buying opportunities of our lifetime.

Now is the time to be investing in the companies that will take us through the modern industrial revolution. Companies involved in AI, cloud computing, internet of things, and big data are going to drive our future economy. The trouble is sorting between the studs and the duds.

Zacks proprietary ranking system can help filter your options. Zacks Rank is an algorithm that ranks stocks based on future profitability, putting the most favorable stocks on the top of the list and the least at the bottom.  

As technology becomes increasingly convoluted, it is crucial to have a consistent strategy that you follow.

How to Capitalize on the 4th Revolution 

5G technology is the catalyst driving this latest revolution.

5G is much more than simply the next evolution of smartphones. Because of the blinding speed, expansive bandwidth and reliability of 5G, we will finally be able to experience the full capabilities of the Internet of Things, artificial intelligence and more. And just like each of the previous industrial evolutions, we’ll begin seeing the creation of new technologies that were previously unimaginable.  

The resulting opportunities for investors could be tremendous, especially for those who get in early.

Our team of experts here at Zacks has just released 5G: Top Stocks for the $12 Trillion Data Revolution, a special report revealing 3 companies at the forefront of this developing technology. Their stocks could skyrocket as new networks and devices begin to rapidly come to market this year.

Now is an ideal time to get started. There’s no question 5G cause explosive growth in multiple sectors. The sooner investors get in position, the more profits they stand to gain.

The report is only available until Sunday, March 29. I encourage you to download it now.

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Good Investing,

Daniel Laboe
Zacks Strategist

Daniel Laboe is an investment expert with a focus and passion for tech, previously working at a Fortune 50 company as a financial analyst and a trader for a Chicago-based proprietary trading firm.

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