Growing the Seeds of Giants

giants

Today, we can see what a great idea it would have been to invest in Google, Apple, or Facebook back when they were tiny startups. The rewards have been in the billions for the lucky or insightful people who invested in them early on. It’s easy to look back and see how strong these companies’ upward trajectories would be, but it wasn’t so easy years or even decades ago. We will be able to say similar things about other companies in a couple of decades, but how can we know or at least get lucky picking out the seeds of future giants now… when they are just seeds?

The first thing to start with is the industry. Which industries are on the verge of massive change and “disruption,” as economists call it? To me, two industries stand out above the others: the energy industry and, relatedly, the automobile industry.

If we continue to burn fossil fuels, we’re going to turn our planet into an oven — a nasty, messy, diseased, explosive oven — where humans suffer and die at an unprecedented scale. Even if that weren’t the case, simple economics are making fossil fuels (and nuclear power) uncompetitive with renewable energy. Easy-to-access fossil fuels are declining fast, driving up the cost of fossil fuels. Meanwhile, renewable energy is free; it’s just the technology used to convert it into electricity that costs something, and such technology costs come down on a steady and often rapid basis. This has made renewable energy cheaper than fossil fuels in many regions now, and the number just keeps growing.

The energy industry is an industry of giants. While the wealth in the future may be more dispersed thanks to the distributed nature of renewable energy, the market transition will surely spawn new giants that master these technologies and offer the best products at the best prices. I think you can already spot these renewable energy giants starting to emerge. Compared to where the industries will be in a few decades, the wind and solar industries are tiny today, but they have developed enough that there are clear leaders, companies that are likely to lead and grow for decades.

The automobile industry is very closely connected to the oil industry. What is transformative here is that electric cars offer many notable benefits over gasoline-powered cars. Even if you ignored the climate concerns mentioned above (as well as pollution and health concerns), which you shouldn’t and I hope we won’t, electric cars offer a better driving experiences in numerous ways, as well as greater convenience. Luckily, battery technology has improved enough that electric cars are also now cheaper to own or lease for many people, offering a triple threat. So, again, I see this massive automobile industry, currently dominated by a handful of giants, transitioning to an electric automobile industry. The companies — startups or some of the current auto giants — will be the big winners. Are you ready to ride this wave?

Image Credit: Alex Green (CC BY-NC 2.0)

Originally published on Sustainnovate.

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