Where will venture capitalists be going next?That's a tough question right now. If you're an entrepreneur, you need to know the answer. After all, can you really expect them to keep throwing money at companies that aren't promising growth? The global economy is in the midst of a dramatic shift. At the same time as it's become easier to start a company (and more people are doing so), traditional investment opportunities are drying up. So what's the answer? Whether we like it or not, the future is in alternative investments and growth businesses.
In 2022, the healthcare industry will be more than twice as valuable as the next most valuable industry.
The healthcare industry has been a target for venture investors for some time now. Over the past five years, VCs have poured $2 billion into healthcare startups in Europe and $6 billion in North America. That's in addition to the $1 billion invested by pharma companies and the $20 billion spent by insurance companies on new drugs and medical devices each year.
But it's not just about money — it's also about time. As of 2022, there will be an estimated 57 million people in Europe over 65 years old and 22 million over 80 years old. These are huge numbers — especially when you consider that there were only 14 million people over 65 in 2010. This rapid increase is driven by two factors: longer life expectancy and lower birth rates.
The most valuable startups after healthcare will be in cybersecurity and AI software.
As we enter the second decade of the 21st century, it is clear that technology is changing the world as we know it. From internet banking to self-driving cars, technology is transforming every aspect of our lives. In fact, according to a report from Goldman Sachs, there are over 1 million jobs related to artificial intelligence (AI) software alone.
As a result of this rapid change, venture capitalists are looking beyond traditional industries like healthcare, finance and energy toward new areas of investment such as cybersecurity and AI software. These emerging technologies could be worth trillions of dollars by 2030 and have the potential to disrupt many industries.
Next will come infrastructure and robotics, with the latter driving a new generation of industrial expansion.
Robots are already replacing humans in factories, but their use is still limited to repetitive, predictable tasks. That's about to change as artificial intelligence (AI) and machine learning (ML) get smarter and more capable.
The first generation of AI is focused on replacing human knowledge with machine intelligence — think Siri, Alexa and Cortana. The second phase will allow robots to learn from their environment and adjust their behavior accordingly. For example, a self-driving car can learn how to drive on its own but still needs a human to tell it when it makes a mistake or react appropriately to unexpected events like pedestrians or other vehicles.
The third phase of AI will combine ML with autonomous systems so that robots can learn from experience without human intervention — think self-driving cars that can change lanes or avoid obstacles without being told what to do.
A massive (albeit belated) industrialization of China is already well underway.
In 2022, venture capitalists will look to China for the next big thing. The country has spent the last decade transitioning from a manufacturing economy to an innovation economy, and investors are starting to notice.
But it's not just the size of the market that makes China attractive. Chinese entrepreneurs are hungry for new ideas and technologies, and they're willing to take risks on untested startups. That's why U.S.-based companies like Uber and Airbnb have been so successful there: They've been able to adapt their products to fit local needs and preferences more easily than if they'd tried doing it from scratch in Silicon Valley or New York City.
Most importantly, investors are finding that Chinese entrepreneurs are willing to work with them in ways that don't happen in Western countries. In the U.S., for example, a lot of innovation happens at universities funded by government grants or nonprofit organizations like the National Science Foundation (NSF). But there's no equivalent "universities" in China — yet — so many researchers end up working for large corporations instead of universities or nonprofits; this makes it harder for them to collaborate with industry partners than it would be in the U.S.
Venture capitalists will have to look outside of silicon valley to find the next big startups.
As the world becomes more and more interconnected, technological innovations will begin to spill over into every corner of our lives. Perhaps one of the most exciting places for tech development is in augmented reality, and it will be exciting to see where venture capitalists decide to pour their money after 2022.
Where will venture capitalists be going next?That's a tough question right now. If you're an entrepreneur, you need to know the answer. After all, can you really expect them to keep throwing money at companies that aren't promising growth? The global economy is in the midst of a dramatic shift. At the same time as it's become easier to start a company (and more people are doing so), traditional investment opportunities are drying up. So what's the answer? Whether we like it or not, the future is in alternative investments and growth businesses.