Learn about the industries driving innovation and the tools shaping the future of technology
In the mid-19th century, during the California Gold Rush, it wasn’t just the miners who struck it rich. Entrepreneurs who supplied essential tools and services—like shovels, picks, and clothing—often found greater and more consistent wealth than those searching for gold. This historical lesson remains relevant today. As new industries emerge and evolve, businesses that provide the necessary infrastructure, tools, and services to these sectors frequently experience significant growth and profitability.
The Modern Gold Rush: Emerging Technologies
The 21st century has witnessed rapid technological advancements, leading to the rise of industries such as artificial intelligence (AI), extended reality (XR), quantum computing, and blockchain. These sectors are akin to modern gold rushes, attracting substantial investment and talent. However, the true beneficiaries are often the companies supplying the “shovels”—the tools, platforms, and services that enable these technologies to flourish.
Artificial Intelligence and Machine Learning
AI and machine learning have transitioned from theoretical concepts to practical tools integrated into various industries. The global AI market is projected to reach $190.61 billion by 2025, growing at a compound annual growth rate (CAGR) of 36.62% from 2018. This growth is driven by the increasing adoption of AI across sectors such as healthcare, finance, and retail.
Companies like NVIDIA, which produce high-performance graphics processing units (GPUs) essential for AI computations, have seen significant growth. NVIDIA’s revenue from its data center segment, which includes AI-related products, reached $10.61 billion in fiscal year 2022, a 58% increase from the previous year. Similarly, cloud service providers like Amazon Web Services (AWS) and Microsoft Azure offer AI and machine learning platforms, generating substantial revenue from businesses seeking scalable AI solutions.
Extended Reality (XR)
Extended Reality, encompassing virtual reality (VR), augmented reality (AR), and mixed reality (MR), is reshaping industries by providing immersive experiences. The XR market is expected to grow from $33.0 billion in 2021 to $125.2 billion by 2026, at a CAGR of 30.6%. This expansion is fueled by applications in gaming, education, healthcare, and remote collaboration.
Hardware manufacturers like Oculus (owned by Meta Platforms) and HTC provide VR headsets, while software platforms such as Unity and Unreal Engine offer development environments for XR applications. These companies supply the essential tools for creating and experiencing XR content, positioning them as key players in the industry’s growth.
Quantum Computing
Quantum computing holds the potential to revolutionize problem-solving across various fields, including cryptography, optimization, and complex simulations. While still in its early stages, the quantum computing market is projected to reach $1.76 billion by 2026, growing at a CAGR of 30.2% from 2021.
Companies like IBM, Google, and Rigetti Computing are developing quantum hardware and cloud-based quantum computing services. By providing access to quantum processors and development tools, these firms enable researchers and businesses to explore quantum algorithms and applications, effectively supplying the “shovels” for this nascent industry.
Blockchain and Cryptocurrencies
The rise of blockchain technology and cryptocurrencies has created a new digital economy. Beyond digital currencies, blockchain offers solutions for supply chain management, secure voting systems, and decentralized finance (DeFi). The global blockchain market size is expected to reach $69.04 billion by 2027, expanding at a CAGR of 56.1% from 2020.
Companies like Coinbase and Binance, which operate cryptocurrency exchanges, have experienced substantial growth by facilitating the buying, selling, and trading of digital assets. Additionally, firms providing blockchain development platforms, such as Ethereum, enable the creation of decentralized applications (dApps), serving as foundational tools for the blockchain ecosystem.
Cybersecurity
As digital transformation accelerates, the need for robust cybersecurity measures becomes paramount. The global cybersecurity market is projected to grow from $217.9 billion in 2021 to $345.4 billion by 2026, at a CAGR of 9.7%. This growth is driven by increasing cyber threats and the adoption of remote work models.
Companies like Palo Alto Networks, CrowdStrike, and Fortinet provide cybersecurity solutions, including firewalls, endpoint protection, and threat intelligence services. By offering tools to safeguard digital assets, these firms play a crucial role in the modern digital landscape, capitalizing on the growing demand for security solutions.
Cloud Computing and Data Centers
The shift towards cloud computing has transformed how businesses operate, offering scalable resources and reducing the need for physical infrastructure. The global cloud computing market is expected to grow from $445.3 billion in 2021 to $947.3 billion by 2026, at a CAGR of 16.3%.
Major players like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud dominate the market by providing a range of cloud services, including storage, computing power, and machine learning tools. These platforms serve as the backbone for numerous digital services and applications, making them indispensable in the current technological landscape.
E-commerce Infrastructure
The e-commerce sector has witnessed exponential growth, further accelerated by the global pandemic. Global e-commerce sales are projected to reach $6.38 trillion by 2024, up from $4.28 trillion in 2020.
Companies that provide e-commerce infrastructure, such as Shopify and Magento, enable businesses to establish and manage online stores with ease. Payment processors like PayPal and Stripe facilitate secure transactions, while logistics firms like FedEx and UPS handle the delivery of goods. By offering these essential services, these companies thrive alongside the expanding e-commerce industry.
Educational Technology (EdTech)
The education sector is undergoing a digital transformation, with technology playing a pivotal role in delivering and enhancing learning experiences. The global EdTech market is expected to reach $404 billion by 2025, growing at a CAGR of 16.3% from 2020.
Platforms like Coursera, Udemy, and Khan Academy have emerged as leaders in the EdTech industry, offering online courses and training programs across various disciplines. These companies provide the tools and platforms that make digital learning accessible to students and professionals globally. Additionally, hardware manufacturers like Lenovo and HP have experienced growth by supplying devices tailored for educational purposes, such as Chromebooks and tablets.
EdTech firms also cater to institutions by providing software for virtual classrooms, learning management systems (LMS), and analytics to track student progress. As education continues to embrace hybrid and online models, these businesses remain essential to the ecosystem’s growth.
Electric Vehicles and Renewable Energy
The shift toward sustainability has fueled significant growth in the electric vehicle (EV) and renewable energy sectors. The global EV market is projected to grow from $163 billion in 2020 to $802.81 billion by 2027, at a CAGR of 24.3%. Similarly, the renewable energy market is expected to reach $1.1 trillion by 2030.
Businesses supplying the critical infrastructure for these sectors are thriving. Tesla, the pioneer in EV manufacturing, also benefits from its energy storage solutions and Supercharger network. Other companies, such as BYD and Rivian, are gaining traction in the EV space. Meanwhile, firms like ChargePoint and EVgo provide essential charging infrastructure, which supports the growing number of EV users.
In renewable energy, companies like First Solar and Vestas are driving innovation in solar panels and wind turbines, respectively. By providing the tools and technologies required for clean energy generation, these firms are capitalizing on the global push toward sustainability.
Healthcare Technology
The healthcare industry is undergoing a profound transformation with the integration of technology. Digital health tools, wearable devices, and telemedicine platforms have become essential in modern healthcare delivery. The global digital health market is expected to grow from $175 billion in 2019 to $660 billion by 2025, at a CAGR of 24.8%.
Companies like Teladoc Health and Amwell have revolutionized telemedicine, enabling patients to consult with healthcare providers remotely. Wearable device manufacturers such as Fitbit and Apple are empowering individuals to monitor their health in real-time, providing valuable data to both users and healthcare professionals.
Additionally, businesses offering electronic health records (EHR) systems, such as Cerner and Epic Systems, play a vital role in streamlining patient information management. These tools enhance efficiency and ensure better care delivery, making them indispensable in the healthcare sector.
Fintech Revolution
Financial technology, or fintech, continues to disrupt traditional banking and financial services. The global fintech market is projected to grow from $127.66 billion in 2018 to $309.98 billion by 2022, at a CAGR of 24.8%. The adoption of digital payment systems, blockchain, and financial analytics tools has accelerated this growth.
Payment processors like PayPal, Square (now Block), and Stripe have become household names, enabling seamless transactions for businesses and consumers. Additionally, companies like Robinhood and eToro provide platforms for stock trading and cryptocurrency investments, democratizing access to financial markets.
In the realm of blockchain, firms offering secure and efficient transaction platforms, such as Ripple and Chainalysis, are thriving. These companies act as the backbone of the fintech ecosystem, enabling innovation and growth in the sector.
Robotics and Automation
The robotics and automation industry is expanding rapidly, driven by advancements in AI and machine learning. The global robotics market is expected to reach $74.1 billion by 2026, growing at a CAGR of 17.45%. Applications in manufacturing, healthcare, and logistics are key drivers of this growth.
Robotics firms like Boston Dynamics and Fanuc are at the forefront of innovation, creating machines capable of performing complex tasks. Automation solution providers like UiPath and Blue Prism enable businesses to optimize processes through robotic process automation (RPA). These tools enhance productivity and reduce costs, making them invaluable in today’s competitive landscape.
The Lesson from History
The analogy of shovels in the gold rush serves as a reminder of the enduring value of infrastructure providers. In every wave of innovation, those supplying essential tools and services often enjoy consistent and substantial growth. While the spotlight may shine on emerging trends like AI, blockchain, or EVs, the companies enabling these industries’ success are the true beneficiaries.
By identifying and investing in businesses that provide critical infrastructure for these emerging sectors, stakeholders can position themselves to thrive in the rapidly evolving technological landscape. As history has shown, the real wealth often lies not in the pursuit of gold but in the tools that make the pursuit possible.
