2025 vision: Three high-conviction predictions for long-term investors

• monitor glucose levels and deploy insulin accordingly.
• improve long-term health outcomes and reduce anxiety.
• be discrete, needle-less and tube-less.
• be rugged enough to wear whilst playing contact sports.
• be sufficiently waterproof to wear while showering or swimming.
• connect to the cloud and be managed through your smartphone.
• be clinically approved, available globally and cheap enough for healthcare systems and patients to afford.

Moving into 2023, we have the prospect of discrete automated insulin delivery (AID) devices such as Insulet’s Omnipod 5 providing:

• accurate continuous glucose monitoring,
• tubeless insulin pump patch delivery,
• controllable via smartphone.

By 2025, the affordability of these devices will have improved, widening access and enabling their users to engage in basic activities of everyday life without having to think about their diabetes.

3. The exponential growth of ‘clean tech’ severs the centuries-old link between economic growth and fossil fuels

Since the 18th century, economic growth has been driven by the burning of fossil fuels. At some point in the next three years, that link will be permanently severed, with profound consequences for the climate, the global economy – and for the energy companies that are being disrupted.

The fact of the matter is that – unlike renewables – fossil fuels do not benefit from Wright’s Law; while prices of coal, oil and gas have exhibited huge volatility, there has not been any long-term downward trend in their cost. In fact, a paper published by the Institute for New Economic Thinking at the Oxford Martin School showed that, after adjusting for inflation, prices of fossil fuels today are roughly where they were 140 years ago…. As the Red Queen in Alice Through the Looking Glass observed, no matter how fast they have run, they have stayed in the same place.

Total electricity generation from renewables hit a record high of 8000 TWh in 2021, representing over 29% of the mix. This is certain to have been beaten in 2022, as the past 12 months brought dramatic improvements in the relative cost of clean energy. Meanwhile, unprecedented response from governments around the world to the energy crisis provoked by Russia’s invasion of Ukraine, including…

• the Inflation Reduction Act in the United States
• the Fit for 55 package and REPowerEU in the European Union
• Japan’s Green Transformation (GX) programme and
• Korea’s aim to increase the share of nuclear and renewables in its energy mix

… have brought forward the point at which demand for fossil fuels peaks and goes into irreversible decline. Global economic growth has been tied to fossil-fuel consumption since the Industrial Revolution. Over the next three years, this link will be broken. We are positioning our client’s capital to profit from this pivotal moment.

Article by Craig Bonthron. Craig is part of Artemis’ impact equities team.

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