Taking Stock: Investing in Tomorrow's World

23 July 2026

Edward Lee Writes:

One of the more interesting parts of our job is that we spend a considerable amount of time thinking about the future.

That might sound a little unusual as most people assume investment advisers spend their days watching share prices, reading company announcements, and analysing financial statements. 

We certainly do those things, but they only tell us where a business is today and not necessarily where it might be in 10 or 20 years' time.

Successful long-term investing has always required looking beyond the next set of company results or the next movement in interest rates. 

This is why AI or chip companies are so highly valued. Investors are looking beyond current losses or unusually high price-to-earnings ratios and focusing instead on what those businesses might earn in five or ten years.

In effect, investors are paying a high price today based on the expectation that revenue and profits will grow considerably. That can produce exceptional returns when the assumptions prove correct, but it is also a risky strategy when expectations become unrealistic.

The businesses that create the greatest wealth over several decades are often those that identify major changes before they become obvious to the wider market. The challenge is to recognise the forces that could reshape the global economy and determine which companies are most likely to benefit as those changes unfold.

Over the past few weeks, I have been researching and writing a substantial paper on the technologies that I believe will have the greatest influence on the world over the next 20 years. I have been reading journals, reports, company announcements and economic research, trying to understand not only what new technologies are emerging but also how they interact with one another. 

Once it is complete, the full research paper will be made available to our advised clients through the secure client portal of our website. I hope it provides a useful framework for thinking about the long-term forces that are likely to shape investment markets for many years to come.

One area that is clear to me is that we are no longer seeing technological progress occur in isolation. What I mean is that there are several major developments advancing at the same time, and each development is accelerating the others. 

Artificial intelligence is helping scientists discover new medicines. Advances in computing are making artificial intelligence more capable. Better batteries are improving electric vehicles and robotics. Renewable electricity is making it economically viable to build the enormous data centres that artificial intelligence requires, while satellite communications are extending reliable internet access to places that were previously difficult to connect.

If we look back over time, the Industrial Revolution reshaped society because advances in engineering, manufacturing and transport all occurred together. Electricity transformed economies because it spread into factories, homes, communications and industry simultaneously. 

The internet changed the world because improvements in computing, telecommunications and software arrived at roughly the same time. 

Looking ahead, I believe we are entering another period where multiple technologies are reinforcing one another, creating opportunities that are likely to extend well beyond the technology sector itself.

Artificial intelligence is perhaps the best example. It dominates headlines almost daily, yet much of the public discussion focuses on relatively simple applications such as chatbots, image generation, or writing software. 

Those developments are impressive, but I suspect they will eventually prove to be among the least significant uses of artificial intelligence. Its greatest contribution is likely to be increasing the productivity of almost every industry rather than becoming an industry in its own right.

In healthcare, artificial intelligence is already helping doctors analyse medical images, identify cancers earlier, and interpret genomic information that would overwhelm even the most experienced specialist. 

Researchers are using it to accelerate drug discovery by examining millions of potential chemical compounds far more quickly than traditional laboratory methods. 

Manufacturers are employing artificial intelligence to improve quality control, reduce waste, and predict equipment failures before they interrupt production. 

Farmers are combining satellite imagery, soil sensors, weather forecasting, and artificial intelligence to produce more food while using less water and fertiliser. 

Financial institutions are strengthening fraud detection, improving risk management, and processing transactions more efficiently.

Artificial intelligence is becoming part of the infrastructure that supports modern economies, rather than remaining just another software product. In that sense, it may eventually resemble electricity. Electricity was once a major technological breakthrough, but it is no longer viewed as a specialist technology. It is simply embedded in almost every business and industry.

I suspect artificial intelligence will follow a similar path. It will gradually become integrated into millions of products and services until we hardly notice it is there.

Consider AI in refrigerators, robots, or systems that detect a road accident, alert emergency services and automatically redirect traffic to reduce congestion around the scene. The range of applications is almost limitless.

Many of today’s problems will be addressed more quickly, and technological progress is likely to occur at a pace that is difficult to comprehend. In that sense, AI will transform almost every part of the economy.

Healthcare is another area that I believe investors should watch carefully over the coming decade. Genomics has been a particular interest of mine for many years, and I remain convinced that it will fundamentally change the way medicine is practised.

For much of modern history, healthcare has focused on treating illness after symptoms appear. Advances in genomic sequencing, artificial intelligence and wearable technology are increasingly allowing doctors to identify health risks earlier, tailor treatments to individual patients and, in some cases, prevent disease before it develops.

The potential benefits are substantial. Earlier diagnosis can reduce pressure on healthcare systems, improve productivity by keeping people healthier for longer, and create new markets for diagnostic testing, medical devices and precision medicines. It is an area where scientific progress has the potential to deliver meaningful economic benefits alongside better health outcomes.

Communications technology is also entering a period of substantial change. To date, we have become accustomed to thinking about internet access in terms of fibre-optic cables buried under the ground and mobile phone towers everywhere. Those technologies will remain essential, particularly in cities, but they are no longer the only means of connecting people and businesses.

Low Earth orbit satellite networks are beginning to provide high-speed internet services across remote parts of the world. At the same time, direct-to-cell technology is allowing ordinary smartphones to communicate with satellites when conventional mobile coverage is unavailable.

For a country like New Zealand, with our geography and dispersed population, these developments could prove particularly valuable, especially as more and more devices are becoming connected to the internet.

This evolution may seem incremental today, but improvements in communications often create opportunities that extend far beyond the communications industry itself - think self-driving cars which need uninterrupted internet connections, or high-speed internet connections on planes.

Energy is another area that will change because every technology discussed relies upon abundant and reliable electricity. Artificial intelligence and data centres consume extraordinary amounts of power, electric vehicles shift energy demand from petrol stations to the electrical grid, while advanced manufacturing, desalination and hydrogen production all require substantial electrical capacity. 

Electricity is the foundation upon which the entire digital economy is being built.

That observation has important implications for investors. 

While much of the attention focuses on companies developing artificial intelligence software or manufacturing electric vehicles, there may also be significant opportunities in the businesses supplying the infrastructure that makes these technologies possible.

Electricity generators, transmission companies, semiconductor manufacturers, specialist engineering firms and businesses involved in battery technology all have important roles to play. 

Datacentres in space sounds like a fantasy right now, but it is clear that the datacentre industry will continue to innovate and evolve, as it looks to become more efficient.

In conclusion, the biggest changes will occur where several technologies come together to solve problems that previously appeared too difficult or too expensive to address on their own.

A modern farm will increasingly combine satellite positioning, autonomous machinery, drones, artificial intelligence, weather forecasting and advanced genetics into a single production system.

None of those technologies is revolutionary on its own, but together they allow farmers to produce more food while reducing water consumption, improving soil management, lowering operating costs and pesticide use.

Similar patterns are emerging throughout manufacturing, logistics, healthcare and financial services.

This highlights an important point for investors because it changes the way we should think about industries. Twenty years ago it was relatively easy to classify businesses into sectors such as banking, manufacturing, healthcare or telecommunications.

Today those boundaries are becoming increasingly blurred.

A healthcare company may also be an artificial intelligence business. A manufacturer may derive much of its competitive advantage from software. A telecommunications provider may also operate satellites, cloud computing infrastructure and cybersecurity platforms.

Of course, recognising a long-term trend does not automatically make every company within that industry a good investment.

The railway transformed the nineteenth century, but many railway companies ultimately failed.

The internet reshaped almost every aspect of modern life, yet hundreds of early internet businesses disappeared because expectations became disconnected from commercial reality.

The same pattern will emerge with artificial intelligence and many of today's rapidly growing technologies.

This is why we place considerable emphasis on each of our clients’ individual investment policy.

Investors’ risk tolerance plays an important role. Just because a technology is exciting, does not guarantee attractive returns if investors pay exaggerated share prices.

Strong management, competitive advantages, sensible capital allocation, and sustainable cash generation remain just as important as they have always been. 

Technology changes industries, but it does not change the basic principles that underpin successful investing.

Another lesson from history is that technological revolutions often create opportunities in places few people initially expect.

When people think about the rise of smartphones, they naturally think of companies such as Apple. Less obvious beneficiaries have included semiconductor equipment manufacturers, specialist chip designers, cloud computing providers and the companies building the communications infrastructure that allows billions of devices to connect to the internet.

Looking further down the supply chain, there are also the critical minerals on which these technologies depend.

Many of those businesses have been generating outstanding long-term returns because they occupy essential positions within the broader technology ecosystem.

I suspect the next 20 years will produce similar outcomes.

Some of tomorrow's most successful companies may not be household names today.

They may be developing advanced materials that improve battery performance, manufacturing specialised equipment used to produce semiconductors, building satellite networks, designing software that controls autonomous factories, or providing the electricity infrastructure required to support artificial intelligence.

Their products may never be visible to consumers, yet they could become indispensable to the industries of the future.

That is one of the reasons we spend time looking well beyond New Zealand.

Our domestic market contains many high-quality businesses, but it represents only a small part of the global investment universe. Some of the world's most significant technological developments are happening in North America, Europe and Asia, and we believe it is important to understand those trends when making long-term investment decisions.

Even when we invest in New Zealand companies, global developments often influence local businesses through changing technology, supply chains, customer behaviour and competition.

Writing this research paper has also reminded me how difficult forecasting can be.

If someone had suggested 30 years ago that many of us would carry a device in our pocket capable of replacing a camera, GPS, music player, video recorder, newspaper, bank branch and personal computer, the idea would probably have sounded outlandish.

Today it feels entirely ordinary. The future has a habit of arriving gradually before becoming so familiar that we struggle to remember life without it.

At Chris Lee & Partners, our objective has never been to chase fashionable themes or speculate on the latest market excitement. Instead, we aim to understand the structural forces shaping the economy over many years and identify businesses that are well positioned to benefit from those changes while remaining financially strong and sensibly valued.

The pace of technological change is unlikely to slow during the next decade. Artificial intelligence, genomics, robotics, advanced manufacturing, satellite communications and clean energy are steadily moving from research laboratories into everyday commercial use.

As advisers, part of our responsibility is to think beyond today's headlines, consider what the world may look like in 10 or 20 years, and position our clients' portfolios so they can participate in the opportunities that emerge along the way.

The one thing we can be certain of is that new technologies will continue to emerge, creating industries and investment opportunities that may be difficult to imagine today but could eventually change how we live and work.

Travel

David Colman - Palmerston North - 24 July

Edward Lee - Auckland (Ellerslie) - 6 AugustDavid Colman - Whanganui - 6 AugustDavid Colman - New Plymouth - 7 August

Edward Lee and Gavin Parkes – Wellington – 10 August

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