Fidelity on Leading Sectors for Innovation

I like to follow research from investment companies because they put their money (actually, other peoples money) where their mouth is.

Leading Sectors for Innovation from Fidelity Investments looks at innovations in health care/medical devices, media and entertainment and information technology.

The medical innovation areas covered include genomics, biotech pharmaceuticals and digital health records. Interesting quote on genomics:

“The cost of sequencing a human genome has fallen considerably over the past few years, enabling research that not so long ago was cost prohibitive. As a result, DNA sequencing has just been exploding. Eventually I think we’ll be sequencing everything—from newborn babies to cancers to cattle and corn. And the field has already been generating profits. The numbers speak for themselves: In 2006, this market was less than $100 million; in 2011, I’ve heard estimates that it may grow to $1 billion.”

The media and entertainment section of the article focuses on the growing role of disintermediation and the growth of online advertising. But what caught my eye was Fidelitys view on the IPO market:

“Over the next 12 to 24 months, I’m expecting an IPO pipeline—and the incumbent investment opportunities—the likes of which I’ve never seen before. These companies will be focused on creating whole new markets that haven’t previously existed.”

The IT section focused on cloud computing and “big data.” Nice quote with data on the growth of cloud computing:

“The first area of cloud computing to really gain traction has been Software as a Service (SaaS). According to Gartner, a leading IT consulting firm, the combined market for cloud services such as SaaS is projected to top $20 billion by 2014, up from a little over $5 billion in 2009.”

The article makes the important point that today is a time of great innovation and these innovations are leading to opportunities for investors.

They are also leading to opportunities for entrepreneurs.

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