The Rise of Next-Generation Internet
“The big deal about the Internet design was you could have an arbitrarily large number of networks so that they would all work together.” Vint Cerf
The internet has profoundly changed the way we understand the world.
The Next-Generation Internet, also called the Internet of the future, refers to the development of faster, more secure, higher-quality Internet networks than those currently available.
This technology is expected to enable new applications and services, including streaming media and virtual reality.
The development of new technologies, such as fibre optics, is expected to lead to faster and more reliable Internet speeds.
Thanks to the Information Age, today’s consumers spend more time and resources online.
Additionally, drones and satellites will make it easier for people in rural areas to access the internet.
5G and Internet of Things (IoT) The Key Technology Enabling the Next Generation Internet
One of the key technologies is the 5G network, which offers faster speeds and better capacity to access data, allowing users to stream content with less lag time.
Additionally, the Internet of Things (IoT) refers to the connection of all devices to the internet, including household appliances, vehicles, and more.
Read our previous blog about connectivity
It will extend to software-defined networks, network function virtualisation and edge computing.
Cyber security of the Next Generation Internet will also provide a great deal of opportunity in light of the growing cyber threat.
Despite the difficulty of predicting the future of the Internet with certainty, it can be said that it will continue to evolve.
In addition, it will become more accessible to more people around the world.
The Next-Generation Internet Investment Opportunity
We are going to see more disruption in the economy with the Next Generation of the Internet than we have seen in the past 40 years.
MarketsandMarkets forecasts that the global 5G market will grow from $4.2 billion in 2020 to $267.5 billion by 2025, at a compound annual growth rate (CAGR) of 91.3%.
In the next five years, the global market for the Internet of Things is expected to grow from $157 billion in 2020 to $1,331 billion by 2025, at a CAGR of 34.6%.
Furthermore, the global software-defined networking market is expected to grow from $4.5 billion in 2020 to $19.3 billion by 2025, at a compound annual growth rate of 34.4%.
By 2025, the global blockchain market is expected to grow from $3.0 billion to $39.7 billion, at a compound annual growth rate of 67.3%.
This will provide exposure to companies that are revolutionising the way we communicate, socialise, analyse data, and interact across borders.
There are numerous opportunities for investing in Next-Generation Internet companies, such as investing in companies developing cutting-edge technologies as well as investing in companies that provide services to the Internet’s growing user base and in companies that offer innovative solutions to enterprise-level businesses.
Understanding the Next-Generation Internet Company Business Model
The Next-Generation Internet companies have robust business models that generate exceptional profitability for information-based businesses.
They also have low costs of incremental production, relative ease of scaling, and the ability to see margins rise as the business expands, rather than suffer diminishing returns.
Moreover, the modest need for additional capital and bigger plants as they grow provides them with a competitive advantage to scale and reach global audiences, making them more attractive to investors.
Next-Generation Internet companies have access to new technologies, such as cloud computing and artificial intelligence, which allow them to operate more efficiently and quickly.
They also have access to vast amounts of data which they can use to make informed decisions.
Additionally, they can more easily adapt to changing market conditions.
Technology has been the dominant driver in recent years of economic growth.
This has reshaped how we communicate, shop, socialise and work and is expected to take significant market share in the future.
As technology advances, the need for specific skills will decrease while the demand for new skills will increase.
For example, as robots and AI become more intelligent and capable, some jobs that require manual labour may no longer be necessary.
However, jobs will open up in areas such as programming and data analysis, as these are skills that robots and AI cannot easily replicate yet.
How Next Generation Internet Technologies Will Impact Our Lives
The Next Generation of Internet companies will provide a unique experience to users.
As technology is advancing at a rapid pace, and with the new tools and platforms available, companies can create an even more personalised experience for their users.
The Next-Generation Internet will be more secure than the existing Internet by using advanced security technologies such as blockchain and quantum encryption to reduce the increasing number of cyber threats.
Additionally, with more data and advanced analytics, companies can better understand their users’ needs and create products that meet those needs.
We believe innovation and new technologies make expensive or sophisticated products and services accessible and more affordable to the broad market as they scale and reach globally.
If you look at some of the biggest companies in the world that were founded on the Internet, many more will emerge in the future which will play an important role in our society.
They will enable faster and more efficient communication, new forms of entertainment, and even new ways of doing business.
We believe the world is increasingly becoming more connected. The YFS Intelligent Wealth Fund is committed to investing in the next-Generation Internet companies that are expected to grow rapidly.
This blog is written by Awet Ghirmay. He is a Head of Investment Research at Minerva Money Management Limited.
The Fund is authorised in the United Kingdom and regulated by the Financial Conduct Authority (FCA) Firm Reference Number:754570.
Risk warnings
*The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
