Innovation Insights Quarterly: Q4

In this Innovation Insights, we highlight five advancements we found interesting this quarter. These breakthroughs are protecting our bodies from heart disease, our homes from grid blackouts, and our digital information from quantum hackers. We believe that innovation is everywhere. As new technologies and products intersect every facet of our lives, the economic impact of innovation will continue to be as profound as it is pervasive.

Deep-sea metal mining can power the energy transformation

The seafloor is littered with riches critical for powering the modern world. Every million years, a few millimeters of metal deposited on the ocean floor builds up fist-sized “polymetallic nodules” containing manganese, nickel and cobalt—essential ingredients for batteries.¹ By dredging the muddy floor, these nodules can be collected. Mining, whether by land or sea, raises environmental concerns; however, collecting deep-sea nodules could be 90% less carbon-intensive than land mining.² The International Seabed Authority has issued permits; as regulatory hurdles are removed, we anticipate innovation in underwater robotics and autonomous subsea vehicles will lower the technological barriers to extracting these seafloor resources.

Why it matters: The energy transformation requires unprecedented amounts of metals to support battery manufacturing for energy storage and electric vehicles (EVs). Meeting the supply demands with ethical sourcing of key materials drives innovation to the depths of the ocean.

Weight-loss drugs deliver outsized results

New drugs treating obesity are moving forward in the market, with the latest experimental drug (retatrutide) helping patients lose an average of 24% body weight over 48 weeks.³ Weekly injections expose the brain to different hormone levels causing patients to lose the craving for food and consume fewer calories. The latest trials on one compound found a 20% decrease in the risk of heart disease and stroke in obese patients.⁴ These positive health effects open the door to more insurance coverage and increased adoption for these drugs.

Why it matters: About 42% of American adults are obese, which is associated with a wide range of serious medical complications including diabetes, liver disease and heart disease.³ We are seeing discoveries that address one health condition (obesity) showing knock-on effects for other conditions—in this case, the leading cause of death (heart disease.)

In a blackout, EVs shine through the darkness

EVs are providing essential home backup power during storms, rolling blackouts and peak demand days.⁵ Some EV battery packs are around 100 kWh–over 7x larger than a standard home AC battery system. One EV can power a home, consuming 29 kWh of daily electricity,⁶ for over 80 hours! Bidirectional charging for vehicle-to-home (V2H) today is limited, but eventually vehicle-to-grid (V2G) technology can enable “virtual power plants” of EV fleets to help meet demand during peak hours.⁷

Why it matters: As intermittent power sources add stress and complexity to the electric grid, EVs can act as a balancing force for stability—especially in emergency situations. As innovation in batteries and power electronics evolves hand in hand with EV adoption, versatile energy technologies will play a critical role in powering our lives.

New encryption protects against quantum computer hacking

Researchers released a new encryption algorithm that is resistant to quantum computer attacks.⁸ The FIDO2 “Fast Identity Online” industry standard authentication has become the most secure website login without relying on passwords. However, biometric identity data, such as Face ID and Touch ID, is stored in databases protected with traditional RSA encryption. While RSA encryption relies on math problems that are hard to solve, a quantum computer could crack the code in eight hours. The new hybrid approach, combining a battle-tested algorithm with a standardized quantum-resistant algorithm,⁹ can start securing public keys before an eventual quantum computer attack on private information.

Why it matters: From private banking data to personal medical information, our digital security boils down to encryption standards that protect against “classical” computers but are easily cracked by quantum computers. Innovation at the intersection of cryptography and quantum technology, byte and atom, is necessary to secure our digital future.

Wearable ultrasound device spots early breast cancer

Researchers at the Massachusetts Institute of Technology have developed a flexible patch that can be incorporated into a bra for ultrasound monitoring of high-risk breast cancer patients. The device uses a 3D-printed patch with a new piezoelectric material that miniaturizes the scanner. The portable device can provide real-time screening between biennial mammograms with a similar resolution to medical imaging centers. This additional data can better screen for “interval cancers,” tumors developed between mammograms, that account for nearly 30% of breast cancer cases.¹⁰

Why it matters: The survival rate of early diagnosis of breast cancer is nearly 100%, while later stage diagnosis falls to a 25% survival rate.¹⁰ Innovation in medical devices and form factors provides additional health care data to increase the quality of treatment, and survival rate, for the most common form of cancer.

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 indicate of future results.