CONTRIBUTORS
Matthew Moberg
Portfolio Manager,
Franklin Equity Group
United States
Innovation continues to accelerate as new technological discoveries lead to the development of scalable applications. In this Innovation Insights, we highlight five advancements we found interesting this quarter. From layering new concepts on old infrastructure, like bricks, to the “final frontier” (i.e., space), each example supports our belief that the ability to manipulate data, material, and organisms at their basic forms will create profound advancements in the economy.
World’s largest rocket takes off
The world’s most powerful rocket performed its first launch and exploded mid-flight when the booster failed to separate.1 Despite its failure, this test represented a transformational moment for the private space industry. The rocket is designed to carry over 100 tons of cargo—more than four times the space shuttle’s capacity. The world collectively sends 500 tons of cargo into space every year.2 Imagine meeting that load with just a handful of launches. Rocket reusability would drive down costs well below today’s levels.3
Why it matters: Reducing the painstaking effort of shaving weight off instrumentation at the expense of other design factors expands what can be sent to space, unlocking opportunities from scientific research to satellite internet, and even space tourism.
Sources: Gartner, Franklin Equity Group. This information is for illustrative purposes only and not necessarily representative of the strategy’s past or future portfolio composition. There is no assurance that the strategy will invest in any or all of these innovation examples. This information is not intended as an investment recommendation, nor does it constitute investment advice.
AI mimics celebrity voices
Recently, a handful of songs generated by artificial intelligence (AI) have gone viral by mimicking the voices of world-famous musicians.4 While this has raised copyright questions and ethical issues, such applications of AI can also drive innovation around digital entertainment and advertising. Generative AI has even been used to replicate the voices of celebrities translated into languages they do not actually speak.5 The technology improves in tandem with the exponential growth of data, so we expect the quality to improve going forward.
Why it matters: The lowering of technological barriers makes AI tools widely accessible. The perception that rote automation is first in line for replacement by AI must be questioned when the creative moats surrounding human artwork and music are under threat of disruption.
Microbes on the skin are engineered to shrink tumors in mice
Harmless microbes found on the skin were modified with a genetic code that is also found on the surface of cancer cells.6 Smearing these “designer bug” microbes on the skin of mice triggered an immune response that destroyed skin cancer cells and shrunk tumors. This genetic approach could one day be used to treat other diseases and allergies by simply rubbing microbes on the back of your ear.
Why it matters: Cancer remains the second most common cause of death in the United States.7 These immunotherapy approaches recruit your own body to fight disease and show great promise in tackling one of the largest outstanding problems in medicine.
Bricks: storing renewable energy as heat
Heavy industries make up about 40% of global carbon emissions, and heat energy accounts for three-quarters of industrial usage.8 However, intermittent renewables can’t provide stable heat needed for continuous industrial processes. Companies are testing a “heat battery” to store electricity from carbon-free sources by using stacks of clay bricks.9 Similar to a toaster, a heating element turns electricity into heat that can be stored for hours or days at one-fifth the storage costs of batteries.10 To recover the energy, air is blown through gaps in the bricks, with the air reaching up to 1,000 degrees Celsius.11 This hot air can be used for industrial water boilers, furnaces and other heatintensive applications.
Why it matters: Heat is the largest energy end-use, making up half of global final energy demand—more than electricity (20%) and transportation (30%).12 The energy transformation will need innovation that includes the application of simple, cost-effective solutions to meet massive market inefficiencies.
Electrified road charges EVs on the go
A 13-mile stretch of electrified road is being built in Sweden to power cars as they drive over the surface. The e-motorway’s passive charging design would reduce the reliance on plug-in chargers, and battery packs could be made 70% smaller to drop the electric vehicle (EV) cost of ownership. A proof of concept for this technology was demonstrated in 2013 over a 15-mile road in South Korea dedicated to electric public buses.13
Why it matters: EV charging and cost of ownership are the two main hurdles to broader adoption. The technology inside EVs continues to evolve—from advanced battery chemistries to AI self-driving. However, beyond the four doors, innovation in the supporting infrastructure makes the EV proposition stronger through convenience for commuters.
There are also risks in investing in this or any asset class. The initial potential of any asset class may not carry over to any specific company or the entire asset class chosen for investment, over any investment time period. Any of the investment assumptions may never come to fruition. Investors should be prepared for potential losses as well as the possibility of investment gains. Ideas, products, companies or entire asset classes with positive past performance are not indicative of future results.
Endnotes
1. Source: Manin, A. “Despite test flight failure, Starship poised to transform space science,” Science, April 20, 2023.
2. Ibid.
3. Source: Venditti, B. “The Cost of Space Flight Before and After SpaceX,” Visual Capitalist, January 27, 2022.
4. Source: Veltman, C. “When you realize your favorite new song was written and performed by… AI,” NPR Up First, April 21, 2023.
5. Source: Kanetkar, R. “ElevenLabs Pitch Deck: AI voice intelligence startup raises $2 million,” Business Insider, April 12, 2023.
6. Source: Hamzelou, J. “Bacteria can be engineered to fight cancer in mice. Human trials are coming.” MIT Technology Review, April 13, 2023.
7. Source: American Cancer Society, “Risk of dying from cancer continues to drop at an accelerated pace,” January 12, 2022.
8. Source: Gross, S. “The challenge of decarbonizing heavy industry,” Brookings, June 2021.
9. Source: Crownhart, C. “The hottest new climate technology is bricks,” MIT Technology Review, April 10, 2023.
10. Source: Vicinanza, S. “Heat storage systems can cut CO2 emissions by 15% in 15 years, really. Meet the ‘Brick Toaster’,” Interesting Engineering, September 23, 2022.
11. Source: Crownhart, C. “The hottest new climate technology is bricks,” MIT Technology Review, April 10, 2023.
12. Source: International Energy Agency, “Renewables 2020: Analysis and forecast to 2025,” 2020.
13. Source: Nine, A. “Sweden to unveil EV-charging road in 2025,” ExtremeTech, May 1, 2023.
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