M C I NTIRE I NVESTMENT I NSTITUTE A T THE U NIVERSITY OF V IRGINIA Disruptive Technologies Presented by Ryan Rechkemmer | October 17 th , 2013 M c I n t i r e I n v e s t m e n t I n s t i t u t e 1
D ISRUPTIVE T ECHNOLOGIES “Advances that will transform life, business, and the global economy” McKinsey Global Institute’s Criteria • The technology is rapidly advancing or experiencing breakthroughs • The potential scope of impact is broad • Significant economic value could be affected • Economic impact is potentially disruptive General Observations • “Creative disruption” alters the economics of an industry • Societal challenges accompany the “next big thing” M c I n t i r e I n v e s t m e n t I n s t i t u t e 2
H ISTORICAL P RECEDENT M c I n t i r e I n v e s t m e n t I n s t i t u t e 3
C ASE S TUDY • Focused on preserving its leadership in the photographic film market • Developed and marketed “film- based digital imaging” • Underestimated competition from Fujifilm • Made unrelated acquisitions to diversify its business • Belatedly transitioned to digital photography • Filed for Chapter 11 bankruptcy in January 2012 M c I n t i r e I n v e s t m e n t I n s t i t u t e 4
12 P OTENTIALLY D ISRUPTIVE T ECHNOLOGIES M c I n t i r e I n v e s t m e n t I n s t i t u t e 5
U NDERESTIMATED D ISRUPTIVE T ECHNOLOGIES "The desktop "There is not the computer industry slightest is dead. indication that Innovation has nuclear energy virtually ceased. will ever be Microsoft obtainable. It dominates with would mean that very little the atom would innovation. That's have to be over. Apple lost." shattered at will." – Steve Jobs, 1996 — Albert Einstein “Not within a thousand years will man ever fly!” – Wilbur Wright, 1901 M c I n t i r e I n v e s t m e n t I n s t i t u t e 6
D E - RAILED D ISRUPTIVE T ECHNOLOGIES “ Nuclear powered vacuum cleaners will probably be a reality within 10 years .” —Alex Lewyt, quoted in the New York Times, June 10th, 1955 M c I n t i r e I n v e s t m e n t I n s t i t u t e 7
T OO M UCH OR T OO L ITTLE A TTENTION Overhyped (KIOR-S) (AAPL-L) (GOOG-L) (AMT-L) (TLK-L) (DLR-L) (LAYN-L [W]) (CTXS-L) (CRM-S [W]) (ABT-L) Overlooked M c I n t i r e I n v e s t m e n t I n s t i t u t e 8
O THER T ECHNOLOGIES OF I NTEREST Runner-Ups Honorable Mentions • Next-generation nuclear • Private space flight (fission) • OLED / LED lighting • Fusion power • Wireless charging • Carbon sequestration • Flexible displays • Advanced water purification • 3D and volumetric displays • Quantum computing M c I n t i r e I n v e s t m e n t I n s t i t u t e 9
G ROUP B REAKOUT A CTIVITY Task 1. Select a disruptive technology 2. Meet the corresponding Manager or Associate to form a group (see below) 3. Research and discuss the investment implications of your technology Disruptive Technology Group Leader Ajay 3D printing Ryan R. Advanced materials Chase Advanced oil and gas exploration and recovery Joe Advanced robotics Alvin Automation of knowledge work Rahul Autonomous and near-autonomous vehicles Kevin Cloud technology Max Energy storage Selena Internet of Things Harrison Mobile Internet Jessica Next-generation genomics Mitchell Renewable energy M c I n t i r e I n v e s t m e n t I n s t i t u t e 10
12 P OTENTIALLY D ISRUPTIVE T ECHNOLOGIES M c I n t i r e I n v e s t m e n t I n s t i t u t e 11
S PEED , S COPE , AND E CONOMIC V ALUE AT S TAKE M c I n t i r e I n v e s t m e n t I n s t i t u t e 12
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