(Bloomberg Markets) — The internet, smartphones, the euro, and cryptocurrencies are just a few of the innovations that have revolutionized markets in the past three decades.So Bloomberg Markets asked some finance industry leaders for their best guesses about what might drive the biggest changes between now and 2052.Their comments have been edited for length and clarity.
Adena FriedmanPresident and CEONasdaq Inc.
The next 30 years I think are going to be really focused on value-added intermediation in the markets.The technology will exist to allow for every asset on the planet to be digitized and available to be bought and sold in an instantaneous way.
So what are the technologies that underpin that? I think moving markets into a cloud infrastructure is going to be a critical component.Bringing more machine learning into market decisions, into crime management, into managing markets for fairness.
And then I definitely think that the digital-asset ecosystem will mature very materially, to become mainstream.
But there are big caveats to that.One is crime management.If the digital-asset ecosystem does not take crime management seriously, governments just won’t allow it to be adopted in a mainstream way.And then the second is the scalability of the digital-asset ecosystem has to match—and frankly, surpass—the scalability of what the traditional markets are able to achieve today.
If the blockchain can scale a lot more than it can today, I think you would see regulators get more comfortable bringing the digital- asset construct into traditional markets.You could see potential for a central bank digital currency really forming the basis for a much more digital payment structure.
And then you could see capital markets opening up into a much more globalized format.
David SolomonChairman and CEOGoldman Sachs Group Inc.
The big macro trends are around artificial intelligence, biopharma, and biotech—changes that are going to have a profound impact on the way we all live.Big-picture issues.Also, investments in trying to find ways for our energy sources to be greener over time.
How do we bring together the capital that’s necessary to drive innovation? Some of that can be done through private-sector risk capital.Some of the capital can come from governments.
Some of the capital can also come from partnerships between the private sector and governments to try to find ways to encourage more investment.
There’s a lot of capital going into artificial intelligence already.
With respect to medtech and biotech, we had a pandemic, and the government intervened.But generally speaking, for regular technological advancement and innovation, I don’t think we need to have public-private partnerships in the medtech or biotech space.But to drive innovative climate technologies and a faster transition to clean energy will require a much greater amount of capital than those other areas.
Most businesses are dealing with accelerating trends of digitization around their business—and automation.I happen to think that blockchain technology is an early version of technologies that will ultimately be used to further digitize the infrastructure of financial services.Because while there are a lot of good things with blockchain, it’s not a great technology for a large number of transactions at a very high speed.
It’s not a perfect analogy, but the way to think about it is the way you accessed the internet 25 years ago vs.
the way you access the internet now.
Jane FraserCEOCitigroup Inc.
As I think about the next 30 years and the innovations that will change and define markets, it is not a single product that comes to mind.Instead, I’m focused on the new ways we will be doing business across the industry.There are fundamental changes on the horizon that will reconstruct the infrastructure of global markets and the architecture of finance as we know it today.
We are moving towards a boundless virtual economy in which markets do not open or close, digital asset on- and off-ramps are limitless and metaverse activities are widespread.Digital assets will be widely embraced and securitized and we will see asset “avatars” that exist in more than one form between traditional assets, digital native assets, and tokenized versions of traditional assets.
In this world, market participants will be able to respond to “after hours” announcements and overseas events at any time of day and across time zones.The 24/7 nature of these transactions will reduce operational risk, streamline payments across platforms globally, and enhance the consumer and client experience.
Making this a reality will require industry-wide operational standards and improved market infrastructure across both the private and public sectors.We will need the appropriate regulatory frameworks, a new generation of risk management and governance tools, and the right infrastructure to support the digital twins of physical systems and objects.
That will mean more widespread institutionalization of retail opportunities and intangible assets, which we’re already seeing signs of today.Adoption of digital assets by institutions is increasing, and there is growing “financialization” of objects that previously only existed in the hands of retail individuals, such as individual real estate properties, art and other collectibles.
One thing is certain, 2050 will be virtual and it will be boundless.
David SiegelCo-founder and co-chairmanTwo Sigma Investments LLC
We can look at what we have right now that might be in the early stages that the internet was in ’92.There’s a lot of stuff going on.The impact of crypto is unknown.The impact of new medical technologies, for example mRNA technology, is unknown.The ability to advance many fields using AI.
These three areas, in a way, remind me of 1990 and the internet.
It is possible that 30 years from now the advances going on now in medical technology will lead to real, meaningful cures to terrible diseases like cancer.Imagine the transformation to our civilization if we can develop treatments for some of the diseases that have plagued humanity forever.That may actually change the lives of more people than anything else.
It may turn out that accelerating climate problems—it appears we’re entering a bad spot here—will truly be the dominant problem.
I’m most excited about technologies that are advancing the decarbonization of the world.
So many of these breakthroughs are the result of being able to apply computational approaches to more traditional fields—computational chemistry, computational biology, and so forth.
So I personally feel that the application of computation to solving problems with medicine and climate and so on is going to be the area that we will find AI offers the most promise to make your world better.
Nir Bar DeaCo-CEOBridgewater Associates LP
Humanity’s most difficult problems have always been solved by collaboration: people sharing information, building on each other’s progress, debating different viewpoints, and working together to shape solutions that are greater than what any individual could accomplish alone.We’re living in an increasingly polarized world characterized by conflict between and within nations, with trust in the institutions and systems that fostered collaboration for decades sharply degrading.
The most important innovations of the next few decades will be the evolution of a suite of technologies to successfully support an “open collaboration” approach.By “open collaboration” I mean the dynamic where the best thinking is made transparent to people all over the world, so that others can digest it, learn from it, improve on it, and—ultimately, if truth and merit win out—trust it.
Today’s best collaboration technologies are often used to produce the opposite outcomes, which is precisely why their evolution to enable open collaboration rather than polarization is critical.These technologies can enable us to make the most of our collective knowledge and resources in the face of shared problems and have the potential to meaningfully shape not only financial markets, but everything about how we interact, how we work, and how we innovate.
They can serve as a way around the many walls that divide us, allowing people to transcend geographic and ideological boundaries, circumvent mistrusted institutions, and create connection with people outside of our narrowly defined, exclusive circles.
Shemara WikramanayakeCEOMacquarie Group Ltd.
There’s no end of opportunity in terms of the climate response.We’ve done really well with wind and solar, but we really need firming solutions in energy.
That means battery technology, microgrid, hydrogen—potentially a large part—distributed grids, etc.Electric vehicles are really now reaching a price point where they can scale up a lot, but then in longer-haul transport we need things like biofuels and sustainable aviation fuel.
Agriculture is a big emitter, and we still haven’t got the solutions there.
We’re investing in a whole lot of precision agriculture, but we need things—methane-reducing foodstock would be a great solution because that’s a big source of emissions.In industry, of course, there’s no end of solutions needed.We’re investing in things like projects for hydrogen, ammonia, charging infrastructure to try and help big industrial fleets move to electric vehicles.
The solutions are myriad, and we’re investing in many of them.We’re also working on solutions for plastics and recycling.So there’s a lot to do.
I wouldn’t try and pick winners, but rather try everything and see what works.—With assistance from Harry Brumpton in Sydney
Basak covers finance for Bloomberg News, Television, and Radio in New York.
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