CDI Global

The Fourth Industrial Revolution and Exponential Hypergrowth Healthcare Companies

We are living in the fourth industrial revolution, and it’s exhilarating! The first industrial revolution began during the late 1700s with the development of steam-generated machines. The second was one hundred years later in the late 1800s with electricity, gas, and oil generating breakthrough transportation and mass production. Then, in the mid-1900s, machines became digitalized like television, computers, and cellphones. Now in the 2000s, the fourth industrial revolution has begun with automated decentralized factories and production through big data, 3D printing, cloud computing, artificial intelligence (AI) machine learning, internet-of-things (IoT), and blockchain technology.

This fourth industrial revolution is bringing in self-driving cars, robots replacing jobs, AI-automated manufacturing, and healthcare, genetic editing curing diseases, and clean energy replacing polluting fossil fuels. Luke Lango talks about Amazon taking over retail, Uber taking over taxis, Netflix replacing movies and TV channels, Google taking over data, LinkedIn taking over job search and hiring, and on and on.

This fourth-generation technology is creating exponential hypergrowth companies with rapidly increasing adoption times for new products and increased speed to billion-dollar companies. This has happened through Moore’s Law of doubling, and Kurzweil’s Law of Accelerating Returns. For example, in 1900, it took 100 years for new technology to become commonly used, in 1950, 20 years; in 2000 only 8 years; and in 2020 it now takes less than 2 years for product adoption. That’s logarithmic adaptation. Regrading billion-dollar companies, in the past, it took 19 years for a typical Fortune-500 company to attain a market cap of $1 billion; in 2003, it was 5 years; in 2012, 2 years, and in 2020, companies are reaching a market cap in less than one year. It’s the same for trillion-dollar companies. It took Microsoft 44 years, Amazon 24 years, and Bitcoin 12 years to reach a trillion-dollar market cap. The past has been arithmetic straight-line growth. Now it’s logarithmic hypergrowth.

These fourth-generation observations are important for the financial community of M&A, private equity, venture capital, family offices, and investment banks. Choosing hypergrowth healthcare companies will lead to success. The criteria for finding these companies include products in a megatrend industry, innovative disruptive products, executive teams that think hypergrowth, and industry leadership. The fourth industrial revolution is going to be an enjoyable and invigorating adventure.

Dr. Gary Epler, CDI Global Partner and Healthcare Industry co-leader

 

 

 

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