Trends 2021

This is a piece that the team at Davidson Investment Advisors puts together annually and is meant to provide some insight into exciting, disruptive, or otherwise new developments we anticipate being impactful to businesses, consumers and society.

Metaverse

The term Metaverse originates from Neal Stephenson’s science fiction novel, Snow Crash. In the novel, human beings interact as avatars in a three-dimensional space based on the real physical world. For most people today, the film adaptation of the Ernest Cline novel Ready Player One demonstrated a vision of what the Metaverse might look like. Coinciding with our previous years’ gaming trends (see “eSports” trend from 2018 and “Cloud Gaming” trend from 2019), the idea of a Metaverse is now an evolving trend to watch over the next several years. Advancements in 3D graphics, computing power, artificial intelligence, virtual reality, and social gaming are colliding creating early, small Metaverses. Gaming and digital worlds, such as Fortnite, are the forum for many young people today to experience a significant part of their social connections. Other companies such as Roblox even have thriving economies built inside of them, where players build virtual goods and games, generating income in the form of the platform’s digital currency, the Robux. The COVID-19 pandemic is pushing the idea of a Metaverse even further as we are all forced to interact more in a digital world than a physical world. Concerts, meetings, birthday parties, weddings among many other events have all moved into the Metaverse during the pandemic. Time will tell if the Metaverse becomes a normal part of our daily lives, that is, if we are not living in a simulation already.

Solid-State Batteries

A solid-state battery differs from today’s lithium-ion or lithium polymer batteries in that it uses solid electrodes and a solid electrolyte, instead of liquid or polymer gel electrolytes. As both the electrodes and the electrolyte are solid state, the solid electrolyte also behaves as the separator, allowing volume and weight reduction due to the elimination of certain components. In addition, the removal of flammable liquid electrolytes can be an avenue for safer, longer-lasting batteries as they are more resistant to changes in temperature and physical damages which occur during usage. While the concept has been known for decades, implementation has been challenged in the past by short lifetimes and slow charging rates. However, in 2020 Volkswagen-backed QuantumScape announced a breakthrough of its single-layer solid-state battery cells with much higher energy density, significantly increasing the drivable range per charge of electric vehicles, as well as the ability to fast charge to 80% in 15 minutes. According to Kent Helfrich, Executive Director, Global Electrification and Battery Systems at General Motors and other known experts in the industry, there is potential for at least a 50% reduction A solid-state battery differs from today’s lithiumion or lithium polymer batteries in that it uses solid electrodes and a solid electrolyte, instead of liquid or polymer gel electrolytes. As both the electrodes and the electrolyte are solid state, the solid electrolyte also behaves as the separator, allowing volume and weight reduction due to the elimination of certain components. In addition, the removal of flammable liquid electrolytes can be an avenue for safer, longer-lasting batteries as they are more resistant to changes in temperature and physical damages which occur during usage. While the concept has been known for decades, implementation has been challenged in the past by short lifetimes and slow charging rates. However, in 2020 Volkswagen-backed QuantumScape announced a breakthrough of its single-layer solid-state battery cells with much higher energy density, significantly increasing the drivable range per charge of electric vehicles, as well as the ability to fast charge to 80% in 15 minutes. According to Kent Helfrich, Executive Director, Global Electrification and Battery Systems at General Motors and other known experts in the industry, there is potential for at least a 50% reduction in battery pack cost over the next several years, putting the cost of an electric vehicle at or below parity compared to the internal combustion engine. This could be a game changer for electric vehicles.

WFA

As COVID-related office closures extend beyond their initial expected lives, both employers and employees have learned to embrace the concept of Work from Anywhere (WFA), a new reality where if an employee has internet and cell service, work can be done. This newfound freedom relaxes the need for employees to make time-consuming and expensive commutes to the office and reduces the need for employers to provide designated office space for each employee as the availability of low-cost, easy-to-use video conferencing services provides a viable alternative to in-person meetings.

The effects of this rapid shift to remote work continue to develop. Employees are now empowered to relocate to less expensive or more desirable locales, with the need to physically commute to the office no longer as necessary. They are also investing more in creating a conducive work environment in their home, both through expansion of designated working spaces and investment in home office equipment. Employers are considering reducing office footprints, investing more in resources to allow for a safe and efficient remote working environment, and learning that perhaps providing a flexible work environment and expecting employee productivity are not mutually exclusive concepts. While the need for collaboration and creativity continue to exist, a new equilibrium between autonomy and accountability seems to be forming between employers and their employees.