13 Stocks and Sectors to Invest in for the Fourth Industrial Revolution - Equity Insiders (2024)

We are currently living through the early stages of a Fourth Industrial Revolution which will have an enormous effect on everyone’s lives. This Fourth Industrial Revolution will see huge upheavals in all industries as new technologies completely transform the way things are made and the way our lives are lived.

The First Industrial Revolution (1760-1840) saw water and steam power used to greatly increase manufacturing capabilities. The Second Industrial Revolution (1871-1914) increased these capabilities further through the widespread use of electricity. This was the birth of modern mass manufacturing. At the same time, railroad and telegraph networks greatly increased the speed of travel and communication. The Third Industrial Revolution (1945-2000s) saw huge advances in computing have a major effect on all kinds of industries. Since the early 2010s, the focus has shifted to a Fourth Industrial Revolution which blends new technologies to completely reshape the global economy.

So which sectors and stocks will be at the forefront of this Fourth Industrial Revolution? Here’s a complete guide to the 13 sectors which will play a major role in the Fourth Industrial Revolution and some of the companies at the forefront of these fields.

1. Artificial Intelligence

Artificial intelligence has long been depicted in science fiction as an existential threat to mankind. Prominent figures such as Stephen Hawking and Elon Musk have warned that advanced AI could spell doom for human civilization. But AI is already being used in many innovative ways. Social media networks use AI to identify patterns in user behavior which would escape the notice of human observers. Machine learning can be used to improve computer systems with limited human input. AI is a also a key component in technologies such as self-driving vehicles.

Key Players: Nvidia is driving lots of innovation within the field of artificial intelligence. Nvidia’s Deep Learning and AI Start-up Accelerator has backed more than 7,000 innovative projects. Nvidia’s market-leading graphics processing units (GPUs) are being used to power supercomputers such as IBM’s Summit. Other companies leading the field in AI include established computing players such as Intel and innovative newer arrivals such as C3.ai.

2. Advanced Robotics

Advanced robotics is primarily being used to increase automation in the manufacturing sector. Advanced robotics also includes the development of products which can help people overcome physical difficulties. As the field continues to grow, there are almost limitless future applications which were once considered the realm of fantastical science fiction.

Key Players: Teradyne has been leading innovation in the field of advanced robotics since the 1960s. Teradyne’s customers include major players such as IBM, Intel, Qualcomm, and Samsung. Japan’s Cyberdyne is another major innovator with products including the HAL exoskeleton suit. This suit is already being used in medical facilities and nursing homes across Japan to provide patients with greater mobility. Boston Dynamics is another big player in advanced robotics. Originally created as an off-shoot of the Massachusetts Institute of Technology, Boston Dynamics was purchased by South Korean conglomerate Hyundai in December 2020 in a deal worth $1.1 billion.

3. Big Data

In 2017, The Economist published a widely quoted article which proclaimed data is the new oil. Data is key to the enormous success of tech firms such as Google and Facebook. These companies provide free services to users in exchange for harvesting vast amounts of data which can then be used by advertisers. Companies which are able to harvest the power of big data are likely to go from strength to strength as the Fourth Industrial Revolution gathers pace.

Key Players: Big data is key to the success of major tech players such as Amazon, Facebook, and Google. Other companies leveraging the power of big data include SalesForce which provides market-leading big data customer relationship management (CRM) solutions. SalesForce claims that companies which use intelligent big data CRM solutions are 23 times more likely to outperform competitors and nine times more likely to promote long-term customer loyalty.

4. Biotechnology

Biotechnology is a diverse field with revolutionary potential for medicine, healthcare, and agriculture. Innovative new applications of biotechnology include emerging fields such as biomedical and chemical engineering, gene editing, and genetically modified food production.

Key Players: CRISPR has been one of the biggest scientific breakthroughs of the 21st Century. CRISPR uses insights from the immune systems of bacteria to easily edit the gene sequences of other organisms including humans. The Swiss-American biotech firm CRISPR Therapeutics uses this technology to development new treatments for illnesses such as sickle cell disease. Other companies to watch in this space include Beam Therapeutics, Fate Therapeutics, and NTL Biotech.

5. Cloud Computing

If you’ve ever backed up photos from your phone to Google Drive or Apple’s iCloud, you’ve used cloud computing. Cloud computing has become even more talked about recently as companies switched to a working from home model in response to the coronavirus pandemic. Cloud computing can also allow companies to access high-performance computing solutions remotely, vastly reducing their cost.

Key Players: Amazon Web Services (AWS) is one of the biggest players in this field, providing companies with a wide range of infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) offerings. Microsoft Azure is expanding rapidly with a similar range of cloud computing services. Other companies such as Cloudfare and Fastly are entirely built around offering innovative cloud computing solutions.

6. Cyber Security

Cyber security is an operational challenge for all sectors of the hyperconnected Fourth Industrial Revolution. An Information and Risk Management forecast released by Garner in early 2020 projected cyber security spending would hit $174 billion by 2022.

Key Players: Cyber security is one of the most well-established sectors on this list and there are a huge number of companies offering cyber security solutions to both personal and business users. Companies at the forefront of developing advanced new solutions to the growing threat of industrial cyber attacks include Absolute, Centrify, Deep Instinct, Infoblox, Kount, Mimecast, MobileIron, One Identity, and SECURITI.ai. Other firms such as Cloudfare roll advanced cyber security into their package of services.

7. Internet of Things and Cyber-physical Systems

Internet of Things (IoT) and Cyber-physical Systems (CPS) similarly describes the relationship between computer networks and physical objects. IoT covers all kinds of internet-connected devices including smart home appliances such as lights and thermostats. CPS concerns an even greater integration between physical and computational elements. Applications of CPS include smart energy grids, medical monitoring devices, industrial control systems, and self-driving vehicles.

Key Players: The QNX operating system is used by many IoT and CPS devices including electric vehicles, phones, and tablets. BlackBerry acquired QNX developer Quantum Software Systems in 2010. PTC is one of the leading players in development of industrial IoT applications. PTC’s ThingWorx platform is aimed at enabling companies to more easily develop innovative IoT products and services.

8. Quantum Computing

While traditional computers operate with bytes that express either 0 or 1, quantum computing introduces qubits which can occupy both 0 and 1 positions simultaneously. This theoretically allows for a huge increase in computing power. However, research into creating a stable quantum computer is still ongoing.

Key Players: The two most promising solutions to creating stable quantum computers are ion trap computers and superconducting qubits. IonQ is one of the leading companies driving the development of ion trap quantum computing. In March 2021, IonQ announced plans to became publicly listed through a special-purpose acquisition company (SPAC). The established tech heavyweights of IBM and Google are at the forefront of development of superconducting qubits.

9. Rare Earth Mining

Rare earth elements are a key component in all kinds of electronic devices, from consumer products to military hardware. In 2016, China accounted for 90% of global rare earth production. By 2020, this had dropped to just 58% as the United States and Australia expanded operations to mine these vital elements.

Key Players: The Mountain Pass mine in California’s Mojave Desert was the world’s main supplier of rare earth minerals from the 1950s until the 1990s but mining operations stopped in 2002 as rare earth mining was increasingly outsourced to China. In 2008, Molycorp was formed with Wall Street and Pentagon backing to bring the Mountain Pass mine back into action. While Molycorp’s stock initially soared, it struggled to become solvent and ultimately collapsed into bankruptcy in 2014. JHL Capital Group acquired rights to the Mountain Pass mine in the bankruptcy proceedings, leading to the formation of MP Materials. MP Materials was listed on the New York Stock Exchange in November 2020. MP Materials signed a contract with the Department of Defense in July 2020 aimed at restoring the US’s lead role in global rare earth production.

10. Renewable Energy

Renewable energy utilizes carbon neutral energy sources such as sun, wind, water, and geothermal heat to provide a green alternative to traditional fossil fuels. With President Joe Biden returning the United States to the Paris Accords after assuming office in 2021, all the world’s governments are now committed to reducing global fossil fuel emissions. Renewable energy is key to achieving this aim.

Key Players: Renewable energy is one of the most crowded fields likely to play a key role in the Fourth Industrial Revolution. Some of the biggest companies in this sector include Denmark’s Orsted and Vestas Wind Systems, Spain’s Iberdrola and Siemens Gamesa, China’s JinkoSolar, Canada’s Brookfield Renewable and Canadian Solar, and the United States’ First Solar, Renewable Energy Group, and SunPower.

11. Robotic Process Automation

Robotic process automation (RPA) is a broad field covering ways in which companies can automate tasks to make their operations more efficient and free up employees to work on higher value tasks. RPA covers everything from email autoresponders to triggering much more complex interactions within digital systems. The key benefits of RPA to companies is that it can reduce labor costs and mitigate the risk of human error.

Key Players: Many large companies are creating in-house RPA solutions. For example, Walmart has implemented around 500 different bots tailored to perform specific routine tasks. American company Teradyne has made big moves in the RPA space in recent years, acquiring Danish firms Universal Robots in 2015 and Mobile Industrial Robots in 2018 and the American AutoGuide Mobile Robots in 2019. Other big players in the RPA space include Swedish-Swiss corporation ABB and Japanese robotics and technology company Cyberdyne.

12. Semiconductors

Semiconductors are powerful conducive materials which are vital in the operation of all kinds of modern electrical devices. From phones to televisions, the average home is full of devices which rely on semiconductors. Put simply, the modern world would cease to function without semiconductors.

Key Players: Taiwan Semiconductor Manufacturing Company (TSMC) dominates the global semiconductor market. With key clients including Apple, Qualcomm, and Nvidia, TSMC accounts for 54% of the entire semiconductor market. Other major producers of semiconductors include Taiwan’s United Microelectronics Corporation (UMC), South Korean conglomerate Samsung, China’s Semiconductor Manufacturing International Corporation (SMIC), and the United States’ GlobalFoundries.

13. 3D Printing

3D printing has existed since the 1980s. Initially 3D printing was only suitable for the creation of pre-production prototypes but the technology is now sufficiently advanced to be used in industrial mass production. Hobbyist 3D printing is also growing in popularity as entry level 3D printers have improved in quality while decreasing in price.

Key Players: Desktop Metal was founded by numerous Massachusetts Institute of Technology alumni and professors in 2015 and quickly attracted venture funding from big players such as Google Ventures, BMW, and Ford Motor Company. By 2018, Desktop Metal was recognized as the fastest growing unicorn company in United States history with a valuation of over $1.5 billion. Key to Desktop Metal’s success are patents for innovative techniques such as single pass jetting, which allows printing to be completed up to four times faster than any other 3D printing solutions on the market. Other innovators in the 3D printing space include Markforged and Nano Dimension.

Preparing for the Fourth Industrial Revolution

The Fourth Industrial Revolution is already well under way, but we are still years away from seeing the full effect its innovations will bring to the world. The cutting-edge nature of the sectors on this list mean things will change quickly in all of them. However, each of these 13 sectors are likely to be some of the highest growth industries of the 2020s. All the companies mentioned are in a great position to capture much of this growth.