Charting Disruption

Outlook 2022

Charting Disruption

1© Global X Management Company LLC

All numbers are approximate

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N - I N T R O D U C T I O N

Table of Contents

Introduction & Biographies

Note: Appendix information, including detailed citations, follow each chapter. Additional disclosures can be found at the end of the presentation deck.

02

Robotics & Artificial Intelligence

Digital Economy

Blockchain

Future of Health Care

Food & Water

Climate Change

Mobility

21st Century Infrastructure

09

22

40

55

68

81

96

107




What Is Charting Disruption?

Change is accelerating all around us.

The convergence of several disruptive technologies – such as robotics and AI, electric mobility, as well as the

blockchain – is creating unprecedented opportunity, while also upending many long-standing industries.

At the same time, new generations of consumers with distinct preferences are rapidly changing demand for key

staples, such as food, water and health care, as well as immersive experiences via the digital economy.

Meanwhile, an evolving relationship with the physical environment is heralding an era of unique challenges as we

grapple with climate change and modernizing our infrastructure.

Charting Disruption seeks to help navigate this landscape of accelerating change. The Global X Research

Team partnered with a panel of hand-picked experts – across academia, the consulting industry, and the

investing world – to explore these changes and identify what we believe are among the most critical

developments for 2022 and beyond.

The following piece consists of eight chapters, in which we present unique data sets, surveys, and analyses,

accompanied by bold predictions and forecasts. While the nature of disruption lends itself to a degree of

unpredictability, it is our intention to leverage our contributors’ expertise and rigorous research to best anticipate the

changes that may lay ahead.

For more information, please visit www.chartingdisruption.com.

http://www.chartingdisruption.com/


All numbers are approximate 3


$43B

in AUM across

more than 80

ETF strategies1

For more than a decade, our mission has been

empowering investors with unexplored and

intelligent solutions.

100+

Diverse team of

more than 100

financial

professionals

1M+

ETF shareholders

across more than

95 countries

Headquartered in New York, with a local

presence in eleven other North American cities

About Global X

Exchange-

Traded Funds

(ETFs)

Research

& Insights

ETF Model

Portfolios

1As of November 2, 2021



O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N - B I O G R A P H I E S

Contributors

Jay JacobsHead of Research & Strategy

May DeResearch Analyst

Matt KunkeResearch Analyst

Alec LucasResearch Analyst

Pedro PalandraniResearch Analyst

Erik BrynjolfssonProfessor &

Director of the Stanford Digital Economy Lab

Ric EdelmanFounder of the Digital Assets Council

of Financial Professionals

Ramez NaamCleanTech Energy Investor & Author

Amy WebbQuantitative Futurist &

CEO of Future Today Institute

Global X Research Team Subject Matter Experts



O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N

ERIK BRYNJOLFSSON

Erik Brynjolfsson is the Jerry Yang and Akiko Yamazaki Professor and

Senior Fellow at the Stanford Institute for Human-Centered AI (HAI), and

Director of the Stanford Digital Economy Lab. He also is the Ralph

Landau Senior Fellow at the Stanford Institute for Economic Policy

Research (SIEPR), Professor by Courtesy at the Stanford Graduate

School of Business and Stanford Department of Economics, and a

Research Associate at the National Bureau of Economic Research

(NBER).

His research examines the effects of information technologies on

business strategy, productivity and performance, digital commerce, and

intangible assets. A best-selling author, he writes and speaks to global

audiences about these topics.

Professor & Director of the Stanford Digital Economy Lab




RIC EDELMAN

All three leading trade publications, Investment Advisor, RIABiz and

InvestmentNews, say Ric Edelman is one of the most influential people

in the financial planning and investment management profession. He’s in

both Research magazine’s Financial Advisor Hall of Fame and Barron’s

Hall of Fame, and was ranked three times as the nation’s #1

Independent Financial Advisor by Barron’s. Ric is also the recipient of

the IARFC’s Lifetime Achievement Award. Ric is also founder of the

Digital Asset Council of Professionals and the Funding Our Future

Coalition. He’s also been awarded two patents for financial product

innovation.

Ric is a leading financial educator and champion of improving financial

literacy for all Americans. He’s the award-winning host of the longest-

running national personal finance radio show on the air for 30 years on

90 stations coast-to-coast. He’s also produced several award-winning

specials for Public Television, and he’s a #1 New York Times bestselling

author of 10 books on personal finance.

Founder of the Digital Assets Council of Financial Professionals



RAMEZ NAAMCleanTech Energy Investor & Author

In his career, Ramez first worked at Microsoft, working early versions of

Microsoft Outlook, Internet Explorer, and the Bing search engine.

Simultaneously, he founded and ran Apex NanoTechnologies, the

world’s first company devoted entirely to software tools to accelerate

molecular design.

Ramez has written five books. Nexus, Crux, and Apex (near future

science fiction), The Infinite Resource: The Power of Ideas on a Finite

Planet (non-fiction), and More Than Human: Embracing the Promise of

Biological Enhancement (non-fiction).

Now he focuses his time on climate and energy, as a frequent public

speaker on the inevitability and increasing price advantage of clean

energy; and as an investor in and advisor to clean energy, mobility, and

climate-related startups around the world.





AMY WEBB

Amy Webb has never limited herself to one field exclusively, because her

belief that the global challenges faced by business and society are

interconnected across disciplines. Amy’s academic background includes

game theory, economics, statistics, political science, computer science,

sociology, music and journalism.

Amy is a professor at the NYU Stern School of Business, where she

developed and teaches the MBA course on strategic foresight and futures

forecasting. She’s also the founder of the Future Today Institute, which

researches emerging technologies at the fringes and tracks them as they

move towards the mainstream. The method she use to see the future is

described in her recent book The Signals Are Talking, which details what

technological changes are ahead, what impact they'll have on business

and society, and how you can forecast the future yourself. Several years

ago, Amy decided to make all of her foresight tools and methodology, as

well as all of FTI's research, open source and freely available to the public.

You can access a library on the Future Today Institute Website.

Quantitative Futurist & CEO of the Future Today Institute



Robotics &

Artificial Intelligence

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – R O B O T I C S & A I

Robots and artificial intelligence (AI) algorithms are becoming smarter and

more capable than ever before, leading to widespread opportunities for

automating tasks. At the same time, weakened supply chains, rising wages,

labor shortages, and changing demographics have created greater demand for

automation technology across a range of industries.

As robot and AI adoption grows, we are likely to see productivity surge, the

costs of services fall, and the very nature of work drastically change.



Robotics and Artificial Intelligence at a Glance

Technological advancements are enabling robotics and artificial intelligence (AI) to play an increasingly impactful role across a

variety of industries and in our daily lives.

$250B

$510B

2020

2026*

Sources: 1. Global X analysis based on data from 360 Research Reports, 2021; Mordor Intelligence, 2021a; Mordor Intelligence, 2021b; Expert Market Research, 2021; IMARC Group, 2021; Markets and Markets, 2021 2. Fortune

Business Insights, 2021

The global

robotics market

is expected to

expand to about

$510B by 2026,

a 12.4% CAGR.1

The global AI

market is

expected to

expand to nearly

$300B by 2026,

a 35.6% CAGR.2

Robots used in industrial automation, often in areas like manufacturing or

logistics, include robotic arms with evolving end-of-arm tooling, cobots,

and autonomous mobile robots (ARMs).

INDUSTRIAL ROBOTS & AUTOMATION

Autonomous vehicles, such as self driving cars, robo-taxis, autonomous

military vehicles, and drones are just a few examples that could achieve

level 3 and 4 driving autonomy within the next few years.

UNMANNED VEHICLES & DRONES

Robotics used outside of the industrial sector, in areas such as healthcare

with robotic surgery or agriculture with robots picking and harvesting

crops.

NON-INDUSTRIAL ROBOTICS

AI is a general-purpose technology (GPT), pervasive across all industries,

with an ability to improve over time and touches on new technologies

such as digital twins, conversational AI technology, and more.

ARTIFICIAL INTELLIGENCE

Key Segments in Robotics & AI

Artificial intelligence (AI) refers to computer systems that can work, react,

and learn like humans to autonomously perform tasks that involve decision

making, visual perception, and speech recognition.

Robotics encompasses the creation, design, and application of

programmable machines that can perform tasks and interact with their

environments without or alongside humans.

*Forecast

*Forecast

ROBOTICS MARKET ($B)

AI MARKET ($B)

$30B

$300B

2020

2026*




Disrupted Supply Chains Create Opening for Widespread Robotics Adoption

Exogenous risks such as climate change, geopolitical tensions, and the COVID-19 crisis have companies rethinking their

dependence on globally integrated supply chains. With automation reducing onshore manufacturing and logistics costs,

robotics could be a key beneficiary in the post-COVID world.

Both onshore and offshore labor continue to get more expensive over time, while robotics costs have fallen.

This dynamic, alongside improving technology, is furthering the case for adopting automation.

Sources: Text: 1. Achille, et al., 2020 2: Michael, 2019 3. Mazachek, 2020 Charts: IFR Press Room, 2021; Klump, Jurkat, & Schneider, 2021; U.S. Bureau of Labor Statistics, 2021a, 2021b; Trading Economics, 2021; SelectUSA, 2020

-22%

44%

567%

-100%

0%

100%

200%

300%

400%

500%

600%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average Unit Price of Industrial Robots in the U.S. vs.Total Worker Compensation for Manufacturing Industries in the U.S. and China

(% change vs. base year = 2004)

Average Unit Price of Industrial Robots in the U.S. Total Worker Compensation in the U.S.

China Average Yearly Wages in Manufacturing (in $)

Supply Chain Disruptions

• Approximately one month after COVID-19

arose in Wuhan, roughly 31% of factories

remained shut down in China1

Aging Populations

• Japan’s labor force will fall to just half of its

peak levels by 20602

Rising Labor Costs

• Robotics-driven labor-cost-savings are the

norm today, with countries like the United

States and China experiencing labor cost

increases of 44% and 567% since 2004,

respectively.

Performance Enhancements

• Among all industries, a 1% increase in

robot density is correlated with an increase

in productivity of 0.8%.3

Drivers of Robotics Adoption




Robotics & AI Will Drive Down the Cost of Services, Not Just Goods

Historically, robots have helped drive down costs in heavily automated processes, such as manufacturing automobiles and

personal electronics. Going forward, smarter AI and more capable robots will help automate services in such sectors as health

care and education.

0

50

100

150

200

250

300Price Changes (2000 – 2020) for Selected Goods & Services in the U.S.

Year 2000 = 100

Medical Care

College Tuition and Fees

New Vehicles

Telephone hardware, calculators, and other consumer information items

Computers, peripherals, and smart home assistants

Over the last 20 years, there has been a stark divergence in the price changes of

goods that utilize automation and offshoring in the manufacturing process, and

more localized services.

AI can help pharmaceutical companies speed up drug discovery:

• On average it takes 10 years for a new drug to come to market, but AI is

expected to cut this time in half2

• AI is also expected to reduce the costs of drug discovery by as much as 70%3

• EX: In late January 2020, a BenevolentAI team used AI tools to

identify Eli Lilly’s baricitinib as a potential COVID-19 treatment in just

a matter of days.

Robotic surgery can save patients:

• Robotic surgical procedures are currently more expensive than traditional

surgeries. However, robotic surgery is less invasive and therefore reduces

hospitalization time by half, saving approximately a third of total hospital costs.

Robotic surgery also reduces postoperative complications and accelerates

recovery time, further improving economics and outcomes.

• EX: Intuitive Surgical’s da Vinci surgical robot reports $1,451 cost

savings per patient for the payer in Robotic-Assisted Laparoscopic

Prostatectomy vs. non-Robotic Assisted4

Sources: Text: 1. Simon, 2017 2. Fukuoka, et al., 2021 3. Insider Intelligence, 2020 4. Intuitive Surgical, 2016 Chart: U.S. Bureau of Labor Statistics,2021a, 2021b, 2021c, 2021d, 2021e

Integrating AI into education can help reduce costs:

• AI can leverage machine learning to understand students’ individual needs,

then design and adapt curriculums to meet them. AI can also optimize

teachers’ time by reducing upfront workloads.

• EX: Georgia Tech’s AI teaching assistant named Jill Watson turns six

years old in January 2022. The AI system responds 24/7 to

predictable student questions about the syllabus. As it frees up time

for teachers and administrators, Jill Watson reduces the cost of

education per student. Administrative costs make up approximately

24% of total U.S. school expenditures1



All numbers are approximate13

Is an AI-Driven Productivity Boom Imminent?For much of the past decade productivity growth has been sluggish, but technological advancements and

broader adoption of artificial intelligence could result in an explosion of productivity.

Erik Brynjolfsson

-2

-1.5

-1

-0.5

0

0.5

0 5 10 15 20 25 30 35 40

Years

Productivity Growth Mismeasurement J-Curve

Sources: 1. IFR Press Room, 2021; Supply Chain Management Outsource, 2019 Charts: Brynjolfsson, et al., 2021

Productivity growth, a key driver for higher living standards, has averaged less than 3% since the

1950s, and has generally been falling over the last decade despite the emergence of several

disruptive technologies.

• In 1881, Thomas Edison built electricity generating stations.

• Even so, by 1900, less than 5% of mechanical drive power in American factories came

from electric motors, as steam power remained entrenched.

• Even though electricity held several advantages over steam, implementation required

factory owners to rethink their factories, and workers and engineers to learn how to best

leverage this technology.

• By the 1920s, electricity was finally embraced and productivity in American

manufacturing soared in a way never seen before or since.

• Overall, it took more than 40 years for this revolutionary technology to disrupt

manufacturing.

Modern Day Parallel: Robotics, AI, and Industry 4.0

• Several new technologies, ranging from robotics and AI to the internet of things, are

emerging, promising to make factories smarter and more efficient than ever before.

• However, less than 30% of the world’s factories use robots.1

• Engineers and factory managers need to be trained in these technologies to

effectively leverage them and automate processes where its most valuable.

• Once this occurs on a broader level, productivity could surge.

0

1

2

3

1950s 1960s 1970s 1980s 1990s 2000s 2010s

Average Annual Productivity Growth in the U.S. (%)

Case Study: Electricity and Manufacturing

The productivity J-curve refers to the historical pattern of initially slow productivity growth after

a breakthrough technology is introduced, followed years later by a sharp increase.




Erik Brynjolfsson

Jobs can be viewed as a bundle of tasks, some of which are suitable for machine learning (SML) and therefore can be automated, while others

are too difficult to automate with current technology. The aggregate value for SML tasks across the United States is estimated at $713 billion,

presenting substantial opportunities for automation and redefining occupations as we know them.1

Sources: 1. Brynjolfsson, et al., 2018

Note: Brynjolfsson, Erik et al. created a “Suitability for Machine Learning” (SML) rubric to assess tasks and apply it to 2,059 Detailed Work Activities (DWA) in O*NET, 18,112 occupation-specific tasks, and 950 occupations (weighted by task

importance). Questions are rated on five-point scale from “strongly disagree” to “strongly agree.” Each DWA is scored by 10 different people.

Most:

• Concierges (3.90)

• Mechanical Drafters (3.90)

• Morticians / Undertakers / Funeral

Directors (3.89)

• Credit Authorizers (3.78)

• Brokerage Clerks (3.78)

Least:

• Massage Therapists (2.78)

• Animal Scientists (3.09)

• Archaeologists (3.11)

• Public Address System and Other

Announcers (3.13)

• Plasterers and Stucco Masons (3.14)

Most and Least Automatable Jobs

• The “Suitability for Machine Learning” (SML) rubric

assesses machine learning’s effectiveness at

automating 18,112 tasks across 964 occupations.

• Each task is scored on a five-point scale. The

higher the score, the more likely the task can be

automated.

• The analysis found that $713 billion worth of tasks

in the United States could be automated through

machine learning. However few occupations can

be entirely automated.

• This implies that occupations are likely to be

rebundled as certain tasks are automated away

and others become more valuable for human

workers to complete.

90th Percentile

75th Percentile

50th Percentile

Few occupations have more

than 50% of associated tasks

with above average (50th

percentile or higher)

suitability for machine

learning.

Most occupations have at least some tasks that can be automated with machine learning, but few occupations can be fully

automated.1

Machine Learning Could Automate Occupational Tasks Worth $713B

0

50

100

150

200

250

300

350

400

Occu

pati

on

Co

un

t

Suitable for Machine Learning Score

Percentage of Tasks in Occupation with SML Above Given Percentile

20% 40% 60% 80% 100%

Percentage Above SML Percentile

90th Percentile

75th Percentile

50th Percentile

Few occupations have more

than 50% of associated tasks

with above average (50th

percentile or higher) suitability

for machine learning.




E-commerce Logistics Will Become Increasingly Automated

To meet growing e-commerce demand and accelerate delivery times, warehouses are turning to automation for every

aspect of the logistics process – from stowing, to picking, packaging, and shipping. Even historically manual tasks such as

picking and packaging, are soon expected to be automated.

0%

2%

4%

6%

8%

10%

12%

14%

AGVs/AMRs Robotics Arms

Percentage of Warehouses with Automation Technology

2020 2021

Only 12% of warehouses in the United States use robotics arms. Similarly, only 9%

use automated guided vehicles (AGVs) and autonomous mobile robots (AMRs) to

move goods. But adoption is rising.

Sources: MMH Staff, 2021

Packaging is one of the hardest-to-automate parts of the logistics process as goods

come in infinite shapes and weights. However, patent filings from Amazon suggest

even this phase could soon be completed by robots.

Amazon’s Patent Filing: US 10,967,995 B1

Automated Packaging Systems

Source: Hoffman, et al., 2021

Products arrive to

warehouse

E-commerce Supply Chain in a

Nutshell

Stowing

Phase

Picking

Phase

Packaging

Phase

Shipping

Phase

Last Mile

Delivery




Are Robots Better Drivers Than Humans?

Every second an autonomous vehicle (AV) drives on a road, it is collecting and processing billions of data points from an array

of sensors, cameras, and radar systems. It uses this data to constantly improve the AV network’s driving skills, reducing the

instances of software disengagements and accidents.

Tesla’s Full Self Driving (FSD) autonomous vehicle technology is involved in accidents

at a rate 10x less than human drivers.

Notes: E = Estimates

Sources: State of California Department of Motor Vehicles, 2021; Tesla, 2021; Global X Wrights Law on Autonomous Driving Stoppage Forecast based on data from State of California Department of Motor Vehicles, 2021

At current learning rates, by 2030, Alphabet’s Waymo and GM’s Cruise AV technology

could drive 200,000 – 300,000 miles before triggering a disengagement event, which

requires the test driver or operator to manually take control of the vehicle in order to

operate it safely.

31,077

195,207

28,605

303,199

0

100,000

200,000

300,000

400,000

Self-Driven Miles Per Disengagement

Waymo Cruise

0.30 0.23

2.03 2.07

0

0.5

1

1.5

2

2.5

3

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020

Q42020

Q12021

Q22021

Crashes Per Million Miles Driven

Tesla's FSD Human Drivers

6-10x improvement

by 2030




$16B

$37B

$355B

Industrial Robotics Market Could More Than Double by 2030

Innovators Early Adopters Early Majority Late Majority Laggards

We expect the industrial robotics market to reach $37 billion in sales by 2030,

more than doubling in size from 2020.

Key Stats

Source: IFR Press Room, 2021

Industrial robot installations are expected to grow as low-

density regions catch up with high density regions.

254304

400422

382 384435 453

486518

0

100

200

300

400

500

600

2015 2016 2017 2018 2019 2020 2021* 2022* 2023* 2024*

Thousands

Annual Installations of Industrial Robots

932

605

390 371289 275 255 248 246

0

100

200

300

400

500

600

700

800

900

1,000

SouthKorea

Singapore Japan Germany Sweden HongKong

UnitedStates

ChineseTaipei

China

Robot Density (# of robots per 10,000 manufacturing employees)

World Avg

(126)

Source: Global X Manufacturing Robotics TAM Forecast based on data from The World Bank, 2021a, 2021b, 2021c

7.8%

CAGR


*Forecast



Key Players in the Rise of Robotics and Artificial Intelligence

• Background: Leading supplier of robots, CNC systems, and

factory automation with over 25 million products installed globally

• Key Products/Services

‒ Industrial Robots: versatile functions with payload capabilities

from 0.5-2,300 kg and paired with advanced application

software

‒ CNC Products: offer intelligent factory automation systems

with more than 4 million installed worldwide

• Recent News/Events

‒ Announced production of its 750,000th industrial robot, a

record high point in the robotics industry

‒ Plans to triple its 2021 output of "collaborative" factory

machines designed to work alongside humans

• Background: Enterprise AI software for accelerating digital transformation

across all industries


‒ C3 AI Suite: includes integrated development studio, data

integration, AI app development, operations, and deployment options

‒ C3 AI Applications: used in industries such as fraud detection,

sensor health, and supply chain optimization


‒ Partnered with Google Cloud and Snowflake to provide enterprise AI

solutions on the cloud

‒ The United States Air Force engages with C3 AI as a strategic AI

platform to support predictive analytics and aircraft maintenance

across the Air Force

• Background: Advances minimally invasive care through robotic-

assisted surgery


‒ Da Vinci: surgical robot with minimally invasive technique

used for over 8.5 million procedures globally through 2020

‒ Ion: endoluminal system biopsies unreachable nodules to

detect lung cancer


‒ Shipped 328 da Vinci Surgical Systems in the second

quarter of 2021, totaling 6,335 systems installed worldwide

‒ There are more than 70 Ion systems installed in U.S.

hospitals as of the second quarter of 2021

• Background: Develop world’s most advanced self-driving technologies for

heavy-duty trucks, targeting safety and efficiency


‒ Autonomous Freight Network: shippers receive autonomous capacity

on a per mile delivery rate, and carriers purchase and operate trucks

‒ TuSimple Path: autonomous operations subscription service for fleet

owners


‒ Received 6,775 reservations for a new line of autonomous trucks in

collaboration with manufacturer Navistar

‒ TuSimple's autonomous technology has lower harsh event rates –

harsh acceleration, as well as braking and cornering - when

contrasted with benchmark rates and human-operated driving

Fanuc

Intuitive

Surgical

TuSimple

Holdings

C3 AI




Appendix: Sources – Robotics & Artificial Intelligence

Robotics and Artificial Intelligence at a Glance

• 360 Research Reports. (2021, March 16). Global consumer robotics market growth 2021-2026. SKU ID: LPI-18637322.

• Expert Market Research. (2021, February). Global service robotics market: By product type: professional service, personal and domestic service; By component: hardware, software; By application: logistics,

construction and demolition, others; regional analysis; historical market and forecast (2017-2027); market dynamics; competitive landscape; industry events and developments. Retrieved from Expert Market

Research Database.

• Fortune Business Insights. (2021, September). Artificial intelligence (AI) market size, share & COVID-19 impact analysis, by component (hardware, software, and services), by technology (computer vision,

machine learning, natural language processing, and others), by deployment (cloud, on-premises), by industry (healthcare, retail, IT & telecom, BFSI, automotive, advertising & media, manufacturing, and

others), and regional forecast, 2021-2028. ID: FBI100114. Retrieved from Fortune Business Insights database.

• IMARC Group (2021, February). Agricultural robots market: Global industry trends, share, size, growth, opportunity and forecast 2021-2026. Research and Markets. ID: 5264014.

• Markets and Markets. (2021, June). Unmanned aerial vehicle (UAV) market by point of sale, systems, platform (civil & commercial, and defense & government), function, end use, application, type, mode of

operation, MTOW, range, and region - Global forecast to 2026. Research and Markets. ID: 5350868.

• Mordor Intelligence. (2021, Julya). Medical robotic system market - Growth, trends, COVID-19 impact, and forecasts (2021 - 2026). Retrieved from Mordor Intelligence database.

• Mordor Intelligence. (2021, Julyb). Military robots market - Growth, trends, COVID-19 impact, and forecasts (2021 - 2026). Retrieved from Mordor Intelligence database.

Disrupted Supply Chains Create Opening for Widespread Robotics Adoption

• Achille, A., Balloch, C. Lambert, B., Chen, C., Chen, G., Chen, L., Enger, W., Ho, J., Huang, X., Hui, D., Kuijpers, D., Leung, N., Li, L., Mak, J., Ngai, J., Poh, F., Pountney, D., Sawaya, A., Saxon, S., Seong,

J., Sha, S., Tu, K., Woetzel, J., Xia, C., Xu, L., Ye, H., Yu, J., Zerbi, S., Zhang, C., Zhou, J., & Zipser, D. (2020, November). Understanding Chinese consumers: Growth engine of the world. McKinsey &

Company.

https://www.mckinsey.com/~/media/mckinsey/featured%20insights/china/china%20still%20the%20worlds%20growth%20engine%20after%20covid%2019/mckinsey%20china%20consumer%20report%2020

21.pdf

• IFR Press Room. (2021, October, 28). IFR presents World Robotics 2021 reports. International Federation of Robotics. https://ifr.org/ifr-press-releases/news/robot-sales-rise-again

• Klump, R., Jurkat, A., & Schneider, F. (2021). Tracking the rise of robots: A survey of the IFR database and its applications. Munich Personal RePEc Archive – MPRA Paper No. 109814. Goethe University,

Frankfurt. https://mpra.ub.uni-muenchen.de/109814/1/MPRA_paper_109814.pdf

• Michael, C. (2019, June 14). Has Tokyo reached ‘peak city’? The Guardian. https://www.theguardian.com/cities/2019/jun/14/has-tokyo-reached-peak-city

• SelectUSA. (2020). Robots and the economy: The role of automation in driving productivity growth. U.S. Department of Commerce: International Trade Administration.

https://www.selectusa.gov/servlet/servlet.FileDownload?file=015t0000000kyXN

• Trading Economics. (2021). Wages in manufacturing in China increased to 82783 CNY/Year in 2020 from 78147 CMY/Year in 2019. https://tradingeconomics.com/china/wages-in-

manufacturing#:~:text=Wages%20in%20Manufacturing%20in%20China%20averaged%2019522.42%20CNY%2FYear%20from,597%20CNY%2FYear%20in%201978

• U.S. Bureau of Labor Statistics. (2021a, November). Databases, tables & calculators by subject: Employer costs for employee compensation.

https://data.bls.gov/timeseries/CMU2013000000000D?data_tool=XGtable

• U.S. Bureau of Labor Statistics. (2021b, November). Databases, tables & calculators by subject: Private industry total compensation for manufacturing industries, including wages & salaries, insurance,

retirement, and paid leave. https://www.bls.gov/news.release/ecec.t04.htm





Robotics & AI Will Drive Down the Cost of Services, Not Just Goods

Text:

• Fukuoka, K., Kusashio, T., & Zhang, Y. (2021, July 25). AI slashes time and cost of drug discovery and development. Nikkei Asia. https://asia.nikkei.com/Business/Pharmaceuticals/AI-slashes-time-and-cost-

of-drug-discovery-and-development

• Insider Intelligence. (2020, November 24). Big pharma is using AI and machine learning in drug discovery and development to save lives. Business Insider. https://www.businessinsider.com/ai-machine-

learning-in-drug-discovery-development-2020

• Intuitive Surgical, Inc. (2016, March 28). Study results: Cost savings associated with robotic-assisted laparoscopic prostatectomy. https://isrg.intuitive.com/node/8651/pdf Simon, C. (2017, September 5).

Bureaucrats and buildings: The case for why college is so expensive. Forbes. https://www.forbes.com/sites/carolinesimon/2017/09/05/bureaucrats-and-buildings-the-case-for-why-college-is-so-

expensive/?sh=5e06d6ce456a

Chart:

• U.S. Bureau of Labor Statistics. (2021a, September 3). Measuring price change in the CPI: College tuition and fixed fees. https://www.bls.gov/cpi/factsheets/college-tuition.htm

• U.S. Bureau of Labor Statistics. (2021b, September 3). Measuring price change in the CPI: Computers, peripherals, and smart home assistant devices. https://www.bls.gov/cpi/factsheets/personal-

computers.htm

• U.S. Bureau of Labor Statistics. (2021c, September 3). Measuring price change in the CPI: Medical care. https://www.bls.gov/cpi/factsheets/medical-care.htm

• U.S. Bureau of Labor Statistics. (2021d, September 3). Measuring price change in the CPI: New vehicles. https://www.bls.gov/cpi/factsheets/new-vehicles.htm

• U.S. Bureau of Labor Statistics. (2021e, September 3). Measuring price change in the CPI: Telephone hardware, calculators, and other consumer information items.

https://www.bls.gov/cpi/factsheets/telephone-hardware.htm

Is an AI-Driven Productivity Boom Imminent?

Text:


• Supply Chain Management Outsource. (2019, August 9). How many factories are there in the world? https://www.scmo.net/faq/2019/8/9/how-many-factories-is-there-in-the-world

Chart:

• Brynjolfsson, E., Rock, D., & Syverson, C. (2021). Data and code for productivity J-curve. Nashville, TN: American Economic Association [Publisher], 2021. Ann Arbor, MI: Inter-university Consortium for

Political and Social Research [Distributor], 2020-12-30. https://doi.org/10.3886/E117947V1

Machine Learning Could Automate Occupational Tasks Worth $713B

• Brynjolfsson, E., Mitchell, T., & Rock, D. (2018, May). What can machines learn, and what does it mean for occupations and the economy? American Economic Association Papers and Proceedings, 108, 43-

47. DOI: 10.1257/pandp.20181019

E-commerce Logistics Will Become Increasingly Automated

• Hoffman, B., Hartford, A. K., Mahadevan, M., Matrecano, J. G., Talda, T. A. (2021). Inflatable packaging materials, automated packaging systems, and related methods. (U.S. Patent No. US 10,967,995 B1).

U.S. Patent and Trademark Office. https://pdfpiw.uspto.gov/.piw?PageNum=0&docid=10967995&IDKey=A314510D0532%0D%0A&HomeUrl=http%3A%2F%2Fpatft.uspto.gov%2Fnetacgi%2Fnph-

Parser%3FSect2%3DPTO1%2526Sect2%3DHITOFF%2526p%3D1%2526u%3D%2Fnetahtml%2FPTO%2Fsearch-

bool.html%2526r%3D1%2526f%3DG%2526l%3D50%2526d%3DPALL%2526S1%3D10967995.PN.%2526OS%3DPN%2F10967995%2526RS%3DPN%2F10967995

• MMH Staff. (2021, November 2). 2021 Warehouse/DC operations survey: Automation as a disruption response. Logistics Management.

https://www.logisticsmgmt.com/article/2021_warehouse_dc_operations_survey_automation_as_a_disruption_response





Are Robots Better Drivers Than Humans?

• State of California Department of Motor Vehicles. (2021). Disengagement Reports. https://www.dmv.ca.gov/portal/vehicle-industry-services/autonomous-vehicles/disengagement-reports/

• Tesla. (2021). Tesla vehicle safety report. https://www.tesla.com/VehicleSafetyReport

Industrial Robotics Market to More Than Double by 2030


• The World Bank. (2021a, January 29). Employment in industry (% of total employment) (modeled ILO estimate). International Labour Organization, ILOSTAT Database.

https://data.worldbank.org/indicator/SL.IND.EMPL.ZS

• The World Bank. (2021b, June 15). Labor force, total. International Labour Organization, ILOSTAT Database. https://data.worldbank.org/indicator/SL.TLF.TOTL.IN

• The World Bank. (2021c, June 15). Unemployment, total (% of total labor force) (modeled ILO estimate). International Labour Organization, ILOSTAT Database.

https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS


https://data.worldbank.org/indicator/SL.IND.EMPL.ZS



Digital Economy

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – D I G I T A L E C O N O M Y

The shift from the physical economy to a more digital one presents both

profound opportunities and grave risks.

The rise of the digital economy is likely to bring upon us a new era of rising

productivity growth and consumer surplus. New ways of shopping, socializing,

and gaming leverage the latest technologies to create exciting new

experiences.

But the COVID-19 pandemic exposed the risks of organizations that were slow

to adopt digital products and services. And even those that have successfully

digitalized face new threats from cybercriminals every day.



The Digital Economy Landscape

The digital economy consists of several high

growth segments that share a common trait:

their primarily virtual existence. Whether it is

selling goods online, facilitating transactions,

streaming entertainment, connecting friends,

or protecting data, these companies depend

on widespread internet connectivity and the

explosion of data creation to operate their

businesses.




The Value of the Digital Economy

By traditional metrics, the digital economy is growing faster than other areas and could eventually rise to be the top

contributor to GDP in the United States.

Source: Charts: U.S. Bureau of Economic Analysis, 2021

13.4%

12.3%

10.9%

9.6%

7.8%

7.6%

7.4%

5.9%

5.4%

5.3%

4.2%

3.3%

3.1%

3.1%

2.2%

1.9%

1.6%

1.4%

1.3%

1.1%

0.8%

Real estate and rental and leasing

Government

Manufacturing

Digital economy

Finance and insurance

Professional, scientific, and technical services

Health care and social assistance

Wholesale trade

Retail trade

Information

Construction

Transportation and warehousing

Accomodation and food services

Administrative and waste management services

Other services, except government

Management of companies and enterprises

Utilities

Mining

Educational services

Arts, entertainment, and recreation

Agriculture, forestry, fishing, and hunting

Digital Economy and Industry Share of Total GDP in the U.S.

$1.02

$2.05

$-

$1

$1

$2

$2

$3

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Trilli

ons

Digital Economy Value Added

9.6% of

GDP

7.8% of

GDP

The digital economy’s footprint has quickly expanded in the U.S. rising from 7.8%

of GDP in 2005 to 9.6% in 2019.

Average Annual

Growth Rate of 6.5%

The digital economy is already a top-4 contributor to U.S. GDP, but fast growth

could help it climb even higher.




The Digital Economy May Be Even Bigger Than Traditional Measures Indicate

Sources: 1. Schomer, 2021 2. Brynjolfsson & Collis, 2019. 3. Bureau of Economic Analysis (BEA), 2021

GDP-B is an alternative metric that supplements the traditional GDP framework by

quantifying contributions to consumer well-being from free goods such as search engines,

email or Wikipedia.

$- $5,000 $10,000 $15,000 $20,000

Search engines

Email

Maps

Video

E-commerce

Social media

Music

Messaging

Median Annual Consumer Surplus Estimates by Digital Category

Consumers value some digital categories more than others. Search engines, email,

and maps, for example, have no comparable off-line substitutes, making them the

most valuable to consumers.

How Can We Better Measure the Digital Economy?

Traditional GDP calculations fail to fully capture the value of digital platforms.

• This year, Americans will spend ~8 hours per day with digital media, which includes search engines, social media, online courses, maps, messaging, cloud video

conferencing, music, apps, and more.1

• Yet these digital goods and services go largely uncounted in official measures of economic activity, such as GDP and productivity.2

• This is evidenced by the fact that contribution of the information sector as a share of total GDP has barely budged since the 1980s, hovering between 4% and 6% annually.3

• But digital goods do create value in the form of a consumer surplus or consumer well-being generated by a product or service.

Consumers value

email at roughly

$8,000 per year

How Big Is the Digital Economy?The digital economy may be even bigger than traditional measures indicate…

Erik Brynjolfsson




80

90

100

110

120

130

140

150

160

1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017To

tal F

acto

r P

rod

ucti

vit

y λ

/z =

10 (

1980 =

100)

Productivity Levels With Intangible Software Capital

Unadjusted Total Factor Productivity in the U.S. Adjusted TFP with Software Intangibles

13%

Productivity Measures Fail To Incorporate Certain Technologies

Despite the introduction of

many disruptive technologies,

productivity growth fell

dramatically during the past

decade – from 2.8% in the

2000s to 1.3% in the 2010s.1

However, over that time

frame, trillions of dollars in

intangible output was

produced, but not counted, in

the national income accounts.

Sources: 1. Brynjolfsson, et al., 2019

Software improves productivity

by more than measured by

traditional approaches

Unlike tangible assets, data is a quasi-infinite, non-linear growing asset. Adjusting productivity measures to include investments in

software, for example, results in a net adjusted productivity level that is approximately 13% higher than traditionally measured.

Productivity Growth SlowedBut Traditional Productivity Measures Fail to Incorporate Certain Technologies

Erik Brynjolfsson




Normalized Software Expenses = Firm’s capital expenditure on software divided by total assets

Sources: Bai, et al., 2021

12%

20%

-17%

4%7% 6%

0%

-2%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

Net Income Sales Normalized Software Expenses Return

Change from Pre-COVID (Q1-2019) to Work-From-Home Economy (Q3 2020)

Remotable Non Remotable

Firms with higher WFH Feasibility Index scores before the pandemic performed significantly better during the crisis

compared to their peers across several dimensions, demonstrating the value of flexible work arrangements.Most Remotable:

• Education Administrators, Postsecondary

• Marketing Managers

• Financial Managers

• Sales Managers

• Human Resources Managers

• Industrial Production Managers

• Audio and Video Equipment Technicians

• Administrative Services Managers

• Transportation, Storage, and Distribution Managers

• Construction Managers

Least Remotable:

• First-Line Supervisors of Production and Operating

Workers

• Maintenance and Repair Workers, General

• Riggers

• Team Assemblers

• Automotive Body and Related Repairs

• Bus and Truck Mechanics and Diesel Engine Specialists

• Farm Equipment Mechanics and Service Technicians

• Aircraft Structure, Surfaces, Rigging, and Systems

Assemblers

• Assemblers and Fabricators, All Other

Most and Least Remotable Jobs

The Impact of Working From HomeHighly ‘Remotable’ Firms Outperformed During COVID-19

Erik Brynjolfsson

Certain jobs are more suited for working from home (WFH) than others. At the company level, certain firms tend to hire more for positions

that are well-suited for working from home. Unsurprisingly, these firms performed much better during the unforeseeable pandemic.




Software’s Shift to the Cloud Accelerates

Cloud-based software-as-a-service (SaaS) providers are quickly stealing market share from legacy on-premises providers as

employers shift their IT to the cloud amid the work from home era.

On-Premises vs. Cloud Computing InfrastructureSaaS market share is projected to grow from 31% in 2020 to

nearly 80% by 2030.

Sources: Text: 1. Oleksiuk, 2021 Chart: ITCandor, 2021

68% of total cost is up-front subscription fee19% of total cost is acquiring software license1

$-

$200

$400

$600

$800

$1,000

$1,200

Bill

ions

SaaS vs. Non-Saas Software Sales

SaaS Revenue Non-SaaS Revenue


Note: * Estimates



E-commerce Is Charting a New Growth Trajectory Post-Pandemic

The pandemic accelerated broader e-commerce adoption, particularly in retail categories that historically lagged in online

sales, such as groceries and auto sales, and among users in certain population groups, such as seniors.

Sources: Dies, 2021; Global X Ecommerce Forecast based on data from U.S. Census Bureau, 2021

The e-commerce boom has ramifications beyond disrupting bricks-and-mortar

retail, as e-commerce leaders become shipping and logistics giants.

24%

16%

38%

21%

1%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2014 2015 2016 2017 2018 2019 2020

Market Share of U.S. Shipping Market

UPS FedEx USPS Amazon Logistics Other

13.6%

31.6%

27.6%

0%

5%

10%

15%

20%

25%

30%

35%

U.S E-commerce Penetration

Actuals Forecast (Post COVID) Forecast (Pre COVID)

Sources: U.S. Census Bureau, 2021; Global X Ecommerce Forecast based on data from U.S. Census Bureau, 2021

In the wake of the pandemic, e-commerce penetration is now expected to be 4%

higher in the next decade relative to pre-pandemic estimates.




Social Media Platforms Dive Into Social Commerce

Social commerce, when consumers make purchasing decisions on social media platforms based on influencers, friends, and

advertisements, is creating new revenue opportunities for established social media firms.

What’s the Difference Between Social Commerce and Ecommerce?Social commerce is still in its early days. In the United States, social commerce

represents less than 4% of total e-commerce sales, but it is expected to continue to grow

faster than broader e-commerce sales, reaching a penetration rate of ~6% by 2025.Social commerce enables shoppers to purchase a product natively within a social media

platform such as Pinterest, Facebook, Instagram, or any other. With 4.6 billion people

around the world navigating social media platforms on a daily basis, brands are now

seeking to leverage these network effects.1

Social commerce differs from e-commerce in that it is geared towards consumer-centric

experiences, focusing on the social aspect of product’s recommendations by family,

friends, or other indirect connections. Conversely, e-commerce tends to be product-centric.

3.6%

4.4%

4.9%

5.3%5.6%

5.9%

0%

1%

2%

3%

4%

5%

6%

7%

$-

$10

$20

$30

$40

$50

$60

$70

$80

$90

2020 2021* 2022* 2023* 2024* 2025*

Bill

ions

Social Commerce Sales in the United States

Social Commerce Sales Social Commerce Sales as % of Total E-commerce Sales

The United States to Follow China’s Roadmap

$37

$352

$-

$100

$200

$300

$400

U.S. China

Bill

ions

Social Commerce Market

~10x

$823

$2,564

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

U.S. China

Bill

ions

E-commerce Market

~3x


Sources: Text: 1. Kepios, 2021 Charts: (Left) Lipsman, 2021; U.S. Census Bureau, 2021; Global X Ecommerce Forecast based on data from U.S. Census Bureau, 2021 (Right) Lipsman, 2021; Global X Ecommerce Forecast based on

data from U.S. Census Bureau, 2021



Buy Now Pay Later (BNPL) Puts Digital Twist on Old Concept of Installment Payments

BNPL services change the consumer credit paradigm by allowing consumers to purchase goods and services in pre-defined

installments. For example, instead of paying upfront for a $100 product, consumers can acquire the item for an upfront

payment of $25 and pay the remaining balance in installments over several weeks or months.

How do BNPL solutions compare to credit cards?

Note: * As of Sep 21, 2021. ** As of Oct 7, 2021.

Sources: Text: U.S. Census Bureau, 2021; Affirm, 2021; Afterpay, 2021; Klarna, 2021 Chart: 1. von Abrams, 2021 2. Research and Markets, 2021

BNPL is expected to disrupt the global consumer credit card market, valued at

approximately $100 billion, while also becoming a larger potion of the $5 trillion

global e-commerce market. 1,2Despite often offering zero-interest loans, BNPL firms have several ways to monetize

their services. Some firms charge merchants a flat fee on a portion of the total

transaction. They can also collect revenue from late fees. Other firms structure their

business models differently, choosing to charge interest to consumers but forgo late

fees, service fees, or prepayment fees.

BNPL / Credit

CardsInterest Rate Fees

Affirm0% to 30% (0% APR loans

represented 38% of total GMV*)None

Afterpay 0%

Purchase below $40: $10 fee when

payment due but not receive, $7 seven

days later. Purchase between $40 and

$272: up to 25% of initial order value (per

purchase) Purchase above $272: A

maximum of $68.

Klarna

0% (19.99% APR if missed

payment on "No Interest If Paid

in Full Promotion")

For Financing Accounts: Up to $35 per

missed month. For Others: Up to $7 (per

payment)

Credit Cards

(National

Commercial Bank

Interest Rate

Average)

14.54% APR**

Up to $29 for the first late payment and $40

for multiple late payments within six credit

card billing cycles.

Credit

Cards

BNPL

0

100

200

300

400

500

600

700

800

2016 2017 2018 2019 2020

Google Trends: BNPL vs. Credit Cards(Indexed to 100)

Affirm Afterpay Klarna Visa Mastercard AmEx




The Metaverse Emerges as the Next Evolution of the Internet

Fortnite hosted successful virtual concerts with Ariana Grande and Travis Scott,

where users attended as their digital avatars to enjoy the shared experience with

millions of others.

Note: Fortnite numbers from Marshmello Fortnite concert (first ever on the platform), Live concert numbers generated

from per day attendance at Lollapalooza 2021

Identity: While digitally present in the metaverse, users can express themselves

as whoever or whatever they want to be with their own avatar.

Multi-device: The ability to access the metaverse from anywhere, whether it’s

your phone, PC, tablet, or other devices.

Immersive: Today, virtual reality (VR) mostly involves surround sound and 360-

degree images. The next generation of VR devices could include haptic body

suits and omnidirectional treadmills that give users physical sensations through

electro-stimulation as they navigate a digital environment.

Economy: A fully developed metaverse has a functioning economy where users

can earn and spend in digital or fiat currencies. Developers and creators can

earn by building engaging experiences and compelling items that users want to

purchase, such as Avatars, digital spaces, art, and more.

Community: Users are not alone in the metaverse, but surrounded by others in

real time, sharing experiences, and or interacting with one another.

Real-time Persistent: The metaverse is expected to be real-time persistent with

no ability to pause it. It continues to exist and function even after users have left.

This trait shifts away the centricity of the user to the virtual world itself.

The metaverse is the next evolution of the internet, one in which users are immersed and virtually present. The metaverse consists of several key

features, including real-time persistency, economies, communities, and avatars, as well as immersion and accessibility across multiple devices.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Ariana Grande Marshmello

Att

en

dees

Artist

Virtual vs. Live Concert Attendance

Most Viewed Fortnite Show Most Viewed Live Show

2021

20192021*

2019


Sources: Chart: Belous, 2021; Bostock, 2019; Bauer, 2021



Immersed in the Metaverse

A truly immersive experience engages all of one’s senses. Today, virtual reality (VR) devices mostly offer surround sound and 360-degree images.

But the next generation of hardware could include haptic body suits, omnidirectional treadmills, and brain sensing wearables, making the virtual

world even more realistic.

Haptic body suits and omnidirectional treadmills give users physical sensations

through electro-stimulation as they navigate a digital environment.

Haptic Body Suits: These suits - full body, vest-only or gloves - provide users

with a sense of touch in VR and AR settings through electro-stimulations or

vibration motors. As users delve into experiences, the suits mimic sensations

such as a hug, raindrops, or even being shot.

Omnidirectional Treadmills: These treadmills let users fully realize VR

experiences by allowing users to naturally walk, run, and jump in any direction.

Today, best-in-class omnidirectional treadmills only feature the ability to walk.

However, we expect future technologies to create more immersive experiences.

Brain Sensing Wearables: These devices analyze and interpret neural signals

which are then translated into digital commands, allowing users to control a

virtual environment in real time. In some leading devices, machine learning

algorithms decode brain activity and recognize the active visual focus, allowing

the object in focus to move in the virtual world.

Augmented

Reality (AR)

Users can virtually place items in their living room to

choose the model they prefer or try on clothes without

purchasing them first.

Virtual

Reality (VR)

Users explore virtual worlds just as naturally as they

would in real life, such as digitally visiting Rome’s

Colosseum.

$31 $59

$124

$297

$-

$50

$100

$150

$200

$250

$300

$350

2021 2022 2023 2024

Bill

ions

AR, VR, and MR Market Size

Mixed Reality

(MR)

Blending AR with VR, mixed reality provides greater

augmentation than AR through holograms that can then

be manipulated.

Sources: Boston Consulting Group, 2021.

9.6x




VR Apps - The Missing Ingredient

We estimate 5.2 million Oculus Quest 1 and 2 devices have been sold since their launches back in 2019 and 2020,

respectively. However, the Meta Platforms (formerly Facebook) believes reaching a sustainable and profitable ecosystem for

developers requires 10 million devices. 1

Sources: Text: 1. Facebook Connect, 2020. Does not include estimates for previous generation, Oculus Rift Charts: (Left) Global X, 2021 (Right) Global X, 2021; Facebook, 2021; Microsoft, 2021; Cranz, 2021; Ceci, 2021

0

1

2

3

4

5

6

Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21

Mill

ions

Estimated Cumulative Oculus Unit Sales

While Oculus devices have been primarily geared towards gaming, Meta expects these

devices to be the entry point to using VR headsets for working, living, and traveling.

App development in the VR ecosystem drastically trails smartphones, resulting in a

lack of quality content. As the number of VR users grows, developers will become

more incentivized to support the space.

6

64

223

116

0

50

100

150

200

250

Oculus Quest 1/2 Hololens iPhone Android

Apps per 100,000 Devices

39x




Will the PlayStation 5 and Xbox X/S Be the Last Generation of Video Game Consoles?

While the latest console release is serving as a near-term catalyst for the gaming industry, it may also be the final chapter of

the console era. Tech giants are already preparing for a console-less future that enables cloud-based gaming across multiple

devices.

1985 1991 1994 1996 2000 2001 2005 2006 2012 2013 2017 2020

Today’s hardware features are still difficult to fully replicate in the

cloud. When playing on a console, processing is conducted

locally, which reduces latency and allows for high quality visuals.

But cloud-based gaming will ultimately displace consoles, as 5G

speeds and edge computing eliminate latency issues.

Cloud gaming means that games are run from a remote server

and streamed across TVs, laptops, desktops, tablets, and phones

via a fast internet connection. Gamers can play the same game,

from device to device, picking up exactly where they left off

previously. Or they can quickly switch between rented games, like

a Netflix for video games. Tech giants are already preparing

offerings for a console-less future, such as Amazon’s Luna,

Apple’s Arcade, Sony’s PlayStation Now, Google’s Stadia, and

many others.

Nintendo

Entertainment

Systems

Super

Nintendo

Entertainment

System PlayStation Nintendo 64 PlayStation 2

Nintendo

GameCube &

Xbox

Xbox 360

Nintendo Wii &

PlayStation 3

Nintendo Wii U

Xbox One &

PlayStation 4

Nintendo SwitchXbox S/X &

PlayStation 5

2022

and

beyondENTER CLOUD GAMING

45%

39%

38%

34%

30%

24%

24%

19%

17%

14%

PlayStation Now

Amazon Luna

Xbox Game Pass

Google Play Pass

Nintendo Switch Online

Apple Arcade

EA Play

Google Stadia

GeForce Now

Uplay+

Most Used Video Game Subscriptions in the United StatesWhich of these video game subscriptions have you used as a paying customer in the past 12 months?

Source: Statista, 2021; Multi-Pick; n= 482 video game subscribers, September 2021




Cybersecurity Top of Mind For Governments and Businesses

The growth of the digital economy creates new entry points for cybercriminals. As a result, more spending on cybersecurity

will be needed to prevent malicious attacks.

The Infrastructure Investment and Jobs Act (IIJA) includes between $1.7 and $8.7 billion of new spending to bolstering the country’s resilience to cyberattacks, with a

particular focus on protecting critical infrastructure related to transportation, electric grids, and water.

$-

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

2022 2023 2024 2025 2026

Bill

ions

Infrastructure Bill Dedicated & Potential Cybersecurity Spending

Potential Spending Dedicated Spending

Cybersecurity Dedicated Spending 2022 2023 2024 2025 2026

Rural & Municipal Cybersecurity Grant $250 million

Enhanced Grid Security $250 million

Cyber Resilience Program $50 millionModeling & Assessing Energy Infrastructure

Risk (To cybersecurity) $50 million

Cyber Response & Recovery Fund $20 million $20 million $20 million $20 million $20 millionState and Local Cybersecuirty Grant

Program $200 million $400 million $300 million $100 million

Potential Sources of Cybersecurity Spending

2022 2023 2024 2025 2026

Water Resiliency Grants $50 million $50 million $50 million $50 million $50 million Advanced Drinking Water Technology

Studies $10 million $10 million $10 million $10 million $10 million Clean Water Infrastructure Resiliency &

Sustainability Program $25 million $25 million $25 million $25 million $25 million Water Data Sharing Pilot Grants $15 million $15 million $15 million $15 million $15 million

Broadband Development $5.1 billion State Digital Equity Capacity Grant Program $240 million $300 million $300 million $300 million $300 million




Key Players in the Rise of the Digital Economy

• Background: Leading platform for creating/operating interactive,

real-time 3D (RT3D) content, especially for video games.


‒ Gaming Services: Video game engine, providing the tools

used to build video games

‒ Unity Pro: Applications and immersive experiences with a

complete solution for professionals across industries such as

film, architecture, and automotive


‒ In 2020, 2.5 billion monthly active users consumed content

created or operated with Unity solutions

‒ Q2 2021 results indicated 71% share of the top 1,000 games

in mobile

• Background: Cryptocurrency exchange platform building a

cryptoeconomy serving 68 million verified users, 9,000 institutions,

and 160,000 ecosystem partners in over 100 countries.


‒ Exchange: Targeting individuals, consumers can buy/sell crypto

and leverage self-hosted crypto wallet

‒ Prime: Brokerage platform with diversified liquidity for

businesses, also accesses commerce for fast, convertible crypto


‒ As of Q2 2021, crypto assets on the platform represented 11.2%

of the total market capitalization of crypto

‒ Customers in the United States able to deposit their paycheck

into Coinbase assets

• Background: E-commerce platform where more than a million

brands sell, ship, and process payments.


‒ Online Store: Wholesale marketplace with online stores and

a facilitated point of sale system

‒ Marketing: B2C marketing through email, business chat, and

Facebook ads


‒ Shopify is firmly positioned in third place, attaining 10.98%

of the e-commerce market share as of April 2021

‒ Took 15 years for the company to get to $200 billion in total

cumulative GMV — and then just 16 months to double that

• Background: Company redefining cybersecurity by pushing the

boundaries of AI technology.


‒ Singularity™️ XDR Platform: AI-powered prevention, detection,

and response, across user endpoints, containers, cloud

workloads, and IoT devices

‒ Vigilance Respond: Global Managed Detection and Response

(MDR) service


‒ As of Q2 2021, IoT, cloud, and data solutions grew by six times

year-over-year and now represent over 10% of new business

‒ Ranked #14 among Forbes’ AI 50 companies using machine

learning within their business models

Unity

Technologies

Shopify SentinelOne

Coinbase




Appendix: Sources – Digital Economy

Digital Economy

• Bulao, J. (2021, November 1). How much data is created every day in 2021? TechJury. https://techjury.net/blog/how-much-data-is-created-every-day/#gref

The Value of the Digital Economy

• U.S. Bureau of Economy Analysis. (2021, June). Updated digital economy estimates. https://www.bea.gov/data/special-topics/digital-economy

How Big Is the Digital Economy?

• Brynjolfsson, E., & Collis, A. (2019, November-December). How should we measure the digital economy. Harvard Business Review. https://hbr.org/2019/11/how-should-we-measure-the-digital-economy

• Bureau of Economic Analysis (BEA). (2021, September 30). GDP-by-industry: Gross output by industry. U.S. Department of Commerce. https://apps.bea.gov/iTable/iTable.cfm?isuri=1&reqid=151&step=1

• Schomer, A. (2021, May 27). US time spent with media 2021: Executive summary. Insider Intelligence and eMarketer. https://www.emarketer.com/content/us-time-spent-with-media-2021

Productivity Growth, Falls

• Brynjolfsson, E., Rock, D. & Syverson, C. (2019). 1. Artificial intelligence and the modern productivity paradox: A clash of expectations and statistics. In A. Agrawal, J. Gans & A. Goldfarb (Ed.), The

Economics of Artificial Intelligence: An Agenda (pp. 23-60). Chicago: University of Chicago Press. https://doi.org/10.7208/9780226613475-003

Working From Home: Highly Remotable Firms Outperformed During COVID-19

• Bai, J. J., Brynjolfsson, E., Jin, W., Steffen, S., & Wan, C. (March, 2021). Digital resilience: How work-from-home feasibility affects firm performance (No. w28588). National Bureau of Economic Research.

https://www.nber.org/system/files/working_papers/w28588/w28588.pdf

Software’s Shift to the Cloud Accelerates

Text:

• Oleksiuk, A. (2021, April 25). On-premises vs cloud computing: Pros, cons, and cost comparison. Intellias. https://intellias.com/cloud-computing-vs-on-premises-comparison-guide/

Chart:

• ITCandor. (2021). IT and communications market research: 2021 predictions and forecasts. Retrieved from ITCandor database.

E-commerce Is Charting a New Growth Trajectory Post-Pandemic

• Dies, J. (2021). Parcel shipping index 2021. Pitney Bowes. https://www.pitneybowes.com/content/dam/pitneybowes/us/en/shipping-index/parcel_shipping_index_ebook_final.pdf

• U.S. Census Bureau. (2021, October 12). Monthly retail trade: Quarterly e-commerce report historical data. https://www.census.gov/retail/ecommerce/historic_releases.html

Social Media Platforms Dive into Social Commerce

Text:

• Kepios. (2021, October). Global social media stats. Datareportal. https://datareportal.com/social-media-users

Charts:

• Insider Intelligence Editors. (2021, July 7). Social commerce surpasses $30 billion in the US. Insider Intelligence & eMarketer. https://www.emarketer.com/content/social-commerce-surpasses-30-billion-us

• Lipsman, A. (2021, February 5). US social commerce is following in China’s footsteps. Insider Intelligence & eMarketer. https://www.emarketer.com/content/us-social-commerce-following-chinas-footsteps

• U.S. Census Bureau. (2021, October 12). Monthly retail trade: Quarterly e-commerce report historical data. https://www.census.gov/retail/ecommerce/historic_releases.html


https://www.bea.gov/data/special-topics/digital-economy

https://www.emarketer.com/content/us-time-spent-with-media-2021



Appendix: Sources – Digital Economy

Buy Now Pay Later (BNPL) Puts Digital Twist on Old Concept of Installment Payments

Text:

• Affirm. (2021, September 21). FY Q4 2021 earnings supplement. https://investors.affirm.com/static-files/80b7c17e-f83f-4bcb-a176-34889589b681

• Afterpay. (2021, September 30). Terms of service – Australia. https://www.afterpay.com/en-AU/terms-of-service

• Klarna. (2021). What happens if I can’t pay on time? https://www.klarna.com/us/customer-service/what-happens-if-i-cant-pay-on-time/

• U.S. Census Bureau. (2021, October 7). Commercial bank interest rate on credit card plans, all accounts [TERMCBCCALLNS]. Retrieved from FRED, Federal Reserve Bank of St. Louis.

https://fred.stlouisfed.org/graph/?id=TERMCBCCALLNS

Chart:

• Research and Markets. (2021, June 30). $103 billion credit card global market report 2021: COVID-19 impact and recovery to 2030. Business Wire.

https://www.businesswire.com/news/home/20210630005563/en/103-Billion-Credit-Card-Global-Market-Report-2021-COVID-19-Impact-and-Recovery-to-2030---

ResearchAndMarkets.com#:~:text=DUBLIN%2D%2D(BUSINESS%20WIRE)%2D%2D,added%20to%20ResearchAndMarkets.com's%20offering.&text=The%20global%20credit%20card%20market,(CAGR)

%20of%203%25.

• Von Abrams, K. (2021, July 7). Global ecommerce forecast 2021. Insider Intelligence & eMarketer. https://www.emarketer.com/content/global-ecommerce-forecast-2021

The Metaverse Emerges as the Next Evolution of the Internet

• Bauer, K. (2021, August 2). Lollapalooza had more than 385,000 people, officials announce after Lightfoot defended holding fest during pandemic. Block Club Chicago.

https://blockclubchicago.org/2021/08/02/lollapalooza-had-more-than-385000-people-officials-announce-after-lightfoot-defended-holding-fest-during-pandemic/

• Belous, D. (2021, August 12). Fortnite x Ariana Grande Rift Tour viewership stats. Stream Charts. https://streamscharts.com/news/fortnite-x-ariana-grande-rift-tour-viewership-stats

• Bostock, B. (2019, July 8). Glastonbury and Coachella are the 2 most famous music festivals in the world – here’s how they compare. Insider. https://www.insider.com/glastonbury-and-coachella-in-photos-

which-festival-is-better-2019-7#how-big-are-they-1

Immersed in the Metaverse

• Boston Consulting Group. (2021). Augmented and virtual reality: Digital, technology, and data. https://www.bcg.com/de-at/capabilities/digital-technology-data/emerging-technologies/augmented-virtual-reality

VR Apps - The Missing Ingredient

Text:

• Meta for Developers. (2020, September 16). Facebook connect 2020: Keynote. https://developers.facebook.com/videos/2020/facebook-connect-2020-keynote/

Chart:

• Ceci, L. (2021, September 10). Number of apps available in leading app stores 2021. Statista. https://www.statista.com/statistics/276623/number-of-apps-available-in-leading-app-stores/

• Cranz, A. (2021, May 18). There are over 3 billion active Android devices. The Verge. https://www.theverge.com/2021/1/27/22253162/iphone-users-total-number-billion-apple-tim-cook-q1-2021

• Facebook. (2021). Quarterly earnings. https://investor.fb.com/financials/?section=quarterlyearnings

• Microsoft. (2021). Browse all HoloLens apps. https://www.microsoft.com/en-us/store/collections/hlgettingstarted/hololens

Will the PlayStation 5 and Xbox X/S Be the Last Generation of Video Game Consoles?

• Statista. (2021, September). Amazon prime gaming / Amazon Luna ranks second among video game subscription services. Global consumer survey: Understand what drives consumerss. Retrieved from

Statista database.




BlockchainBlockchain and digital assets are upending many traditional areas of finance.

With cryptocurrencies now valued at trillions of dollars in market capitalization,

adoption is accelerating at all levels, with even institutional investors warming

up to the emerging asset class.

Beyond cryptocurrencies, security tokens and/or non-fungible tokens (NFTs)

represent additional types of digital assets that are upending areas like art and

real estate.

Blockchain technology promises many valuable use-cases beyond digital

assets. Any firm, regardless of industry or segment, that could benefit from the

features of transparent, verified transactions as well as immutable data entry

and recordkeeping could find value in implementing blockchain technology.

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N - B L O C K C H A I N



Decoding the Crypto Landscape

There are over 14,000 cryptocurrencies that leverage blockchain technology and may offer unique utility to owners.1


BITCOIN (BTC)Market Cap $1.1 trillionThe first and largest

cryptocurrency often used

as a store of value or for

payments.

ETHEREUM (ETH)Market Cap $480 billionPlatform created to enable

developers to execute

smart contracts and

decentralized apps (dapps).

BINANCE COIN

(BNB)Market Cap $93 billionCoin issued by its own

exchange as the native

asset of the Binance

blockchain.

TETHER (USDT)Market Cap $73 billionStablecoin designed to

consistently value $1.00.

SOLANA (SOL)Market Cap $66 billionProof-of-stake and proof-

of-history-based public

blockchain platform.

CARDANO (ADA)Market Cap $59 billionProof-of-stake smart

contract platform which

aims to allows for more

modularity amongst dapps.

Ripple (XRP)Market Cap $49 billionReal-time gross settlement

system used for

microtransactions and

remittances.

POLKADOT (DOT)Market Cap $39 billionMulti-chain architecture

built to assemble

internet of blockchains.

USD COIN (USDC)Market Cap $36 billionStablecoin fully backed by

reserved assets and

redeemable on a 1:1 basis

for USD.

AVALANCHE

(AVAX)Market Cap $31 billionProof-of-Stake blockchain

known for speed.

DOGECOIN (DOGE)Market Cap $29 billionOpen-source peer-to-peer

digital currency initially

forked as a parody.

SHIBA INU (SHIB)Market Cap $24 billionMeme token aiming to be

the Ethereum-based

alternative to dogecoin.

CRYPTO.COM COIN

(CRO)Market Cap $18 billionNative coin of platform

aimed to speed transition

to cryptocurrencies.

TERRA (LUNA)Market Cap $16 billionReserve token backing a

suite of algorithmic

stablecoins.

LITECOIN (LTC)Market Cap $14 billionPeer-to-peer

cryptocurrency and open-

source software project;

early fork of bitcoin.

WRAPPED BITCOIN

(WBTC)Market Cap $14 billionEthereum-based token that

allows bitcoin to be

wrapped onto Ethereum to

be utilized in DeFi.

UNISWAP (UNI)Market Cap $13 billionLargest decentralized

exchange for the broad

trading of Ethereum tokens.

BINANCE USD

(BUSD)Market Cap $13 billionUSD-backed stablecoin

(1:1) approved by New

York State Department

of Financial Services.

CHAINLINK (LINK)Market Cap $12 billionBlockchain oracle network

built on Ethereum used for

tamper-proof data transfer

to on-chain smart contracts.

ALGORAND (ALGO)Market Cap $11 billionBlockchain designed to

encourage developers to

create new cryptocurrency

applications.

321 4 5

876 9 10

1511 12 13 14

2016 17 18 19

1. Information reflects data from November 22, 2021. Source: CoinMarketCap, 2021



20%

33%42% 45% 43%

55%59%

64%60% 61% 60%

64% 64%69% 72%

80%

67%58% 55% 57%

45%41%

36%40% 39% 40%

36% 36%31% 28%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020

Q42020

Q12021

Q22021

Q32021

Coinbase Trading Volume Share by Type, Institutional or Retail

Institutional Retail

Institutional Investors Warm Up to Cryptos

Institutions are beginning to allocate to cryptocurrencies, touting the asset class as a portfolio diversifier.

Coinbase saw crypto trading volume from institutional clients going from 20% of total volume in

Q1 2018 to 72% in Q3 2021.

$56B $21B $12B $11B $7B $31B $27B $14B $30B $28B $45B $89B $335B $462B

S&P 500

Index

NASDAQ 100

Stock Index

MSCI ACWI

Index

Gold Spot

$/Oz

US Crude Oil

WTI

1 Year 0.20 0.20 0.24 0.06 0.08

3 Year 0.15 0.15 0.21 0.15 0.19

5 Year 0.11 0.10 0.14 0.12 0.12

10 Year 0.09 0.08 0.09 0.08 0.04

Historically, bitcoin has exhibited a very low correlation with

other asset classes.

Bitcoin Correlation Matrix

Bit

co

in -

US

D C

ross R

ate


Sources: Coinbase, 2021; Bloomberg Finance L.P., 2021

$327B

Note: Diversification does not ensure a profit or guarantee against a loss. Past

performance is not a guarantee of future results.



Picks and Shovels: The Segments Leading in the Rise of Blockchain and Digital Assets

While many investors may be reluctant to invest in cryptocurrencies directly, a growing industry of publicly traded companies

that are contributing to the development of blockchain technology and digital assets provide an alternative method to gain

exposure to the space.

• Involved in verifying and adding

digital asset transactions to

various blockchain ledgers and

producing technology that is used

in digital asset mining

• Miners are rewarded crypto for

completing blocks of verified

transactions which are added to

the blockchain

• Operating digital asset trading

platforms/exchanges, custodians,

wallets, and/or payment gateways

• Exchanges collect money from

traders via deposit/withdrawal fees

and buying/selling crypto

Examples

Marathon Digital

Riot Blockchain

Hive Blockchain

Hut 8 Mining

Argo Blockchain

Examples

Binance U.S.

Coinbase Global

Gemini Trust

Kraken

Voyager Digital

Examples include private and public equities. There is no guarantee that companies mentioned remain in or out of the fund.

Miners

• Involved in the development,

distribution, engineering and

consulting services of applications

and software services related to

blockchain and digital asset

technology, including smart contracts

• Hosting services charge a fee for

their services which eliminate the

need for multiple intermediaries

Examples

Northern Data

Compass

Core Scientific

Compute North

Ebang International

Hosting Services

• Manufacturing and distributing

infrastructure and/or hardware used

in blockchain and digital asset

activities

• Manufacturers generate revenue

through selling hardware operations

which are designed to facilitate the

mining process

Examples

Bitmain Technologies

MicroBT Miners

Canaan Creative

Bitfury Group

Blockstream

Equipment Manufacturers


Exchanges & Transactions



Are Digital Asset Equities Correlated to Bitcoin?

Blockchain and Digital Asset equities (i.e., companies involved in the blockchain or digital asset ecosystem) tend to exhibit a

positive correlation to bitcoin, with miners often being the most highly correlated.

30-day rolling correlations to Bitcoin prices as of 9/30/2021. Miners include Gut 8 Mining, Marathon Digital Group, Rio Blockchain, Hive Blockchain, Bitfarms, Argo Blockchain, Bit Digital, SOS Ltd, BIT Mining, and CleanSpark. Hosting

Services include Northern Data Group, and Ebang International Holdings. Exchanges/Transactions include Coinbase, Voyager Digital, Square, and PayPal. Equipment Manufacturers include Canaan and Nvidia.

Source: CoinMarketCap, 2021; Bloomberg Finance L.P., 2021

-1

-0.5

0

0.5

1

May-21 Jun-21 Jul-21 Aug-21 Sep-21

EXCHANGES / TRANSACTIONS

-1

-0.5

0

0.5

1

Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21

MINERS

-1

-0.5

0

0.5

1


EQUIPMENT MANUFACTURERS

-1

-0.5

0

0.5

1


HOSTING SERVICES




Crypto Mining, Explained

Bitcoin mining is an industry with approximately $20 billion in annual revenue, based on current bitcoin prices as of October 31,

2021. Mining is mostly done using purpose-built bitcoin mining devices that compete with other ‘bitcoin miners’ to be the first

to solve a specific mathematical problem as fast as possible.

Bitcoin miners often operate thousands of mining rigs, which

are specialized computers designed to solve a specific

mathematical problem as fast as possible. Each solution to

this mathematical problem generates a 64-digit hexadecimal

number, a process known as hashing.

Bitcoin transactions are pooled together in a

“block”.

Once a “block” is formed, miners compete to

solve it (hardware becomes important).

After it is solved, the “block” and the

corresponding transactions are verified by the

network.

The new “block” of verified transactions is

attached to a chain of prior “blocks”.

For their efforts, miners are rewarded with new

bitcoin for each “block” completed

(approximately every 10 minutes), as well as

transaction fees paid by the bitcoin users.₿

$-

$5

$10

$15

$20

$25

$30

$35

$10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000T

ota

l P

ote

nti

al R

eve

nu

e, in

Bil

lio

n $

Price of Bitcoin

Total Potential Annual Bitcoin Mining Revenue, by Price of Bitcoin

Similar to traditional commodity miners, annual bitcoin mining revenue varies depending on the

underlying price of bitcoin, resulting in high operational leverage for this segment.

Note: Bitcoin = BTC. Based on a 6.25 BTC reward per block (not including transaction fees, another form of revenue for miners). 1 Block = ~10 minutes = 6.25 BTC. 6.25 BTC x 6 intervals of 10 minutes per hour = 37.5 BTC/hour. 37.5 BTC x 8,760 hours (ina year) = 328,500 BTC/year. Subject to halving: After every 210,000 blocks mined, or roughly every four years, the block reward given to bitcoin miners for processing transactions is cut in half.

The Mining Process




$-

$1

$2

$3

$4

$5

Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21

Cumulative Value of NFT Transaction Volume (in $ billion)

Could the Rise of NFTs Lead to Tokenized Real Estate?

Real estate is generally an illiquid asset class, presenting challenges for investors looking to buy or sell quickly. However, as

NFTs have shown in art and digital media, that tokenization can disrupt the status quo by offering fractional ownership,

transparency, and liquidity.

NFTs are tokens that people can use to represent

ownership of unique items or assets.

They are secured by the Ethereum blockchain, in most

cases.

They can only have one official owner at a time – no one

can modify the record of ownership or copy/paste a new

NFT into existence.

Tokenization, fungible or not, consists of digitizing a

physical asset, giving it a tradable, liquid form of token that

exists on a blockchain.

The NFT market is close to reaching $5 billion in transaction volume since 2020.1

Sources: 1. NonFungible, 2021 2. tZero, 2021

Real Estate Tokenization Case Study

The Aspen Digital Security (ASPD) token represents

fractional ownership in the St. Regis Aspen Resort —

a five-star, 179-room hotel in Colorado and the first

major real estate property to test tokenization. The

company raised $18 million in mid-2018 after efforts to

raise capital through traditional platforms failed. The

tokenization and token distribution was fully regulated

and compliant with SEC guidelines.

Now trading on tZero, a secondary market trading

platform, ASPD now has a market capitalization

greater than $20 million and represents one of the

largest tokenized real estate assets in the United

States.2 Trading volume remains low, but as proven by

NFTs, investors could see the value of investing in real

estate in a liquid and transparent way.




MicroPayments - Can You Buy a Cup of Coffee With Cryptocurrencies?

Suppose someone wants to buy a cup of coffee and pay with bitcoin. Bitcoin itself cannot

handle every financial transaction, especially small ones, since it can only process seven

transactions per second. This creates the need for a second layer that can process these

transactions. Enter the Lightning Network. The Lightning Network takes transactions out of

the main blockchain (i.e., off chain). It does so by setting up a multi-signature address that

is shared between the consumer and the coffee shop. Once a payment channel is

established in the blockchain, all the transactions between the two parties occur off chain.

At any point in time, any party can close the channel and the balance between the two gets

recorded on the main blockchain. The Lightning Network doesn’t require a direct channel

with someone as long as there is a path through other channels.

Bitcoin: ~7 Visa: ~40,000 Lightning Network:

Capable of millionsTransactions

Per Second3,4

0

500

1000

1500

2000

2500

3000

3500

2018 2019 2020 2021

Lightning Network Capacity in BTC

On Chain

Off Chain

Funding

Transaction

Closing

Transaction

₿ ₿

0.00005₿

0.000045₿

0.000040₿

0.000035₿

0₿

0.000005₿

0.000010₿

0.000015₿

Time

How does the Lightning Network work?

Crypto-denominated micropayments, or payments worth less than a few cents, are inconsistently confirmed, and fees

render such transactions unviable on the blockchain network today.1 The Lightning Network (LN) solves this, allowing

micro payments denominated in bitcoin.

Since its beta launch in 2018, the lightning network has grown to sustain over

3,000 bitcoins in transactions (i.e., bitcoin funds across multiple channels).2

Sources: 1. MIT Media Lab, n.d. 2. Bitcoin Visuals, 2021 3. Pompliano, 2021 4. The Lightning Network, n.d.




Reimagining Supply ChainsSupply Chains Can Be Strengthened With Blockchain Technology

Ric Edelman

Intricate supply chains can be fraught with uncertainty, lost product, and lack of accountability. With distributed ledger technology, every party in a supply

chain can become interconnected – traders, freight forwarders, inland transportation, ports and terminals, ocean carriers, as well as customs, FDA, law

enforcement, and other authorities – all working within a secure system.

Raw Materials /

Parts / ProduceTransportation

Supply ChainWholesaler

DistributorRetailer Customer

Across several steps of the supply chain,

blockchain technology can be used to verify the

source of a product, its successful delivery, and

payment for goods and services.

Case Studies: Fishing Industry & Luxury Watches

The Norwegian Seafood Association is using a blockchain created

by IBM to track salmon as they are bred, caught, stored, and

shipped. At the grocer, consumers can scan each fish’s QR code to

see when the fish was farmed and how long since it left the sea. In

turn, the fishermen can prevent fraud and reduce waste.

Some of the most prestigious watchmakers in the world, including

Vacheron Constantin, Ulysse Nardin, and Breitling, are using blockchain

technology to track every watch they manufacture. This allows buyers

to authenticate each watch’s provenance from the factory to the retailer

– guaranteeing authenticity through changes in ownership.




Extending Financial ServicesDigital Assets Could Potentially End Poverty on a Global Scale

Ric Edelman

About 1.7 billion people (including 6% of U.S. households) are unbanked.1 But of those 1.7 billion people, the Pew Foundation says 60% of them have a

smartphone – meaning they can obtain a digital wallet and use it to obtain and hold digital assets, providing financial services to those who are often

overlooked by traditional banks.

Digital assets can untap the huge market of unbanked adults who own a smartphone.

0 200 400 600 800 1000

China

India

United States

Indonesia

Brazil

Russia

Japan

Mexico

Germany

Vietnam

United Kingdom

Bangladesh

Iran

Turkey

France

Italy

Philippines

Pakistan

South Korea

Thailand

Top Countries by Smartphone Users (in millions) 2

Sources: 1. Demirgüç,-Kunt, et al., 2018 2. Newzoo, 2021




Two-thirds of cryptocurrency owners believe a 0% to 10% allocation to

cryptocurrency is ideal for their investment portfolio.

Note: N = 231

Q: WHAT PERCENTAGE OF YOUR INVESTMENT PORTFOLIO IS AN IDEAL ALLOCATION FOR

CRYPTOCURRENCIES?

(% OF RESPONDENTS, AMONG RESPONDENTS THAT OWN CRYPTOCURRENCEIS)

68%

21%

9%

2%

0% to 10% 11% to 25% 26% to 50% 50%+

Consumer Pulse: Cryptocurrency Adoption Accelerated in the Past Two Years

Nearly two-thirds of cryptocurrency owners entered the asset class

within the past two years.

Note: N = 231

Q: WHEN DID YOU FIRST ACQUIRE CRYPTOCURRENCY ASSETS?

(% OF RESPONDENTS, AMONG RESPONDENTS THAT OWN CRYPTOCURRENCIES)

12%

26%

41%

21%

0%

10%

20%

30%

40%

50%

Prior to 2017 2017 to 2018 2019 to 2020 2021


Source: Global X, 2021



Cryptocurrency Adoption Is Set to Enter the Mainstream

• Uncorrelated Asset Class:

Cryptocurrencies account for 1.2% of global

financial wealth today.1 We expect this to

grow as more institutional investors

incorporate cryptocurrencies into their asset

allocation frameworks to take advantage of

the uncorrelated nature of the asset class. In

addition, and as proven by NFTs, tokenized

real estate assets will completely change the

status quo of real estate investing.

• Medium of Exchange: Developments such

as the Lightning Network, alongside with

lower transaction costs, enhanced privacy

and global accessibility will drive

cryptocurrencies to disrupt the $2 trillion

legacy global payments industry.2

• Decentralized Finance (DeFi): Peer-to-peer

financial services on public blockchains will

enable users to conduct many financial

services transactions faster and without

back-office paperwork or a third party. The

legacy financial services industry represents

$23 trillion TAM for cryptocurrencies to

disrupt.3


Key Drivers of Adoption


$3T

$47T

$10T

Digital assets could grow from $3 trillion in market capitalization today to $10 trillion by

2030, with a longer-term TAM of $46 trillion or ~12% of global financial wealth by 2030.

Sources: Text: 1. Ossinger, 2021; Zakrewski, et al., 2021 2. Botta, et al., 2020 3. The Business Research Company, 2020 Chart: Ossinger, 2021; Zakrewski, et al., 2021; The World Bank, 2021

Note: Longer-term TAM estimate based on a survey-weighted average approach on the question of “What percentage of your investment portfolio is an

ideal allocation for cryptocurrencies, among crypto owners?”. The scope of the survey is limited in nature and cannot be relied upon as an investment

recommendation. Survey-weighted average = 11.6% (89 = 2.5%; 68 = 7.5%; 49 = 17.5%; 21 = 37.5%; 4 = 75%) of the $397T global financial wealth by

2030. We model the adoption of cryptocurrencies globally along the same trajectory that global internet adoption followed from 1990 to present.



Key Segments & Companies Leading Blockchain’s Rise

• Background: One of the largest crypto mining operations in

North America with low energy costs and a hash rate of 2.09

EH/s, representing ~2.4% of the bitcoin network’s total

computational power dedicated to mining as of June 30, 2021


‒ Hardin Data Center: Bitcoin mining data center in Hardin, Montana

with capacity to deploy up to 30,000 S19 Pro Miners


‒ Purchased $150 million in bitcoin towards becoming pure-play

bitcoin investment option

‒ Produced 1,252.4 new minted bitcoins during Q3 2021, increasing

production by 91% quarter-over-quarter

‒ Announced collaboration with NYDIG to provide members of

MaraPool, with access to NYDIG’s services

• Background: Building a “cryptoeconomy” where consumers can

expect transparency in sending/receiving crypto


‒ Exchange: Integrated solution for secure cryptocurrency

transactions/asset management (“Prime” for institutional investors)

‒ Commerce: Custom checkout procedure integrated with Woo

Commerce and Shopify


‒ In Q2, users generated $462 billion of trading volume and

subscription and services revenue totaled $103 million

‒ Pro service opened inbound transfers for AVAX to its trading

platform

‒ Launched price auction for healthier price discovery on its exchange

• Background: A leading provider of supercomputing solutions and

bitcoin mining hardware


‒ AvalonMiner: A high-efficiency, high-hash-rate ASIC bitcoin miner

equipped with 3420watts of power

‒ Kendryte AI: Powerful edge computing/interference chips designed

for visual and semantic recognition


‒ Q2 total computing power sold was 5.9 million Thash/s, up 126.9%

from 2.6 million Thash/s in the same period of 2020

‒ Partnership with Genesis Digital Assets to sell 20,000 bitcoin

mining machine with an additional purchase option

‒ Enhancing AI efforts by investing in visual solution provider

• Background: Delivers cost-efficient data centers and hardware

maintenance/operations through proprietary software and

hardware tools


‒ Data Center: Offer HPC applications for bitcoin mining, blockchain,

artificial intelligence, and big data analytics

‒ Hardware: High-performance computing hardware implementing AI


‒ Acquired bitcoin miner Bitfield in a step towards becoming an

industry leader

‒ Corporate strategy presentation highlighted energy efficiency and

renewable energy efforts

‒ Acquired server systems with 223,000 GPUs from Block.one

Marathon

Digital

Canaan Northern

Data

Coinbase


There is no guarantee that companies mentioned remain in or out of the fund.



Appendix: Sources – Blockchain

Decoding the Crypto Landscape

• CoinMarketCap. (2021, November 22). Historical snapshot – 22 November 2021. https://coinmarketcap.com/historical/20211122/

Institutional Investors Warm Up to Cryptos

• Coinbase. (2021, November 9.) Shareholder letter: Third quarter. https://s27.q4cdn.com/397450999/files/doc_financials/2021/q3/Coinbase-Q321-Shareholder-Letter.pdf

• Bloomberg Finance L.P. (2021, September 30). Bitcoin correlation matrix. Retrieved from Bloomberg database.

Are Digital Asset Equities Correlated to Bitcoin?

• CoinMarketCap. (2021, September 29). Historical snapshot – 29 September 2021. https://coinmarketcap.com/historical/20210929/

• Bloomberg Finance L.P. (2021, September 30). Bitcoin correlation matrix. Retrieved from Bloomberg database.

Could the Rise of NFTs Lead to Tokenized Real Estate?

• NonFungible. (2021). Market overview. https://nonfungible.com/market/history

• tZERO. (2021). ASPD. https://www.tzero.com/asset/ASPD

Micropayments: Can You Buy a Cup of Coffee With Cryptocurrencies?

• Bitcoin Visuals. (2021, October 3). Lightning. https://bitcoinvisuals.com/lightning

• MIT Media Lab. (n.d.) Layer 2: The lightning network. Digital Currency Initiative https://dci.mit.edu/lightning-network

• Pompliano, A. (2021, August 27). Lightning network overview. The Pomp Letter. https://pomp.substack.com/p/lightning-network-overview

• The Lightning Network. (n.d.) Lightning network: Scalable, instant bitcoin/blockchain transactions. https://lightning.network/

Economics: Digital Assets Could Potentially End Poverty on a Global Scale

• Demirgüç,-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The global Findex database 2017: Measuring financial inclusion and the fintech revolution. The World Bank.

https://globalfindex.worldbank.org/sites/globalfindex/files/chapters/2017%20Findex%20full%20report_chapter2.pdf

• Newzoo. (2021, May). Top countries by smartphone users. https://newzoo.com/insights/rankings/top-countries-by-smartphone-penetration-and-users/

Consumer Pulse: Cryptocurrency Adoption Accelerated in the Past Two Years

• Global X. (2021, October). Survey on Crypto & Blockchain [Unpublished]. Research & Strategy Team at Global X. New York, NY.




Appendix: Sources – Blockchain

Cryptocurrency Adoption Is Set to Enter the Mainstream

Text:

• Botta, A., Bruno, P., Chaudhuri, R., Nadeau, M.-C., Tayar, G., & Trascasa, C. (2020, October). The 2020 McKinsey global payments report. McKinsey & Company.

https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/accelerating%20winds%20of%20change%20in%20global%20payments/2020-mckinsey-global-payments-

report-vf.pdf

• Ossinger, J. (2021, November 8). Crypto world hits $3 trillion market cap as ether, bitcoin gain. Bloomberg. https://www.bloomberg.com/news/articles/2021-11-08/crypto-world-hits-3-trillion-market-cap-as-

ether-bitcoin-gain

• The Business Research Company. (2020, December). Financial services global market report 2021: By type (lending and payments, insurance, reinsurance and insurance brokerage, investments, foreign

exchange services), COVID-19 impact and recovery. Retrieved from The Business Research Company database.

• Zakrzewski, A., Carrubba, J., Frankle, D., Hardie, A., Kahlich, M., Kessler, D., Montgomery, H., Palmisani, E., Shipton, O., Soysal, A., Tang, T., & Xavier, A. (2021, June 10). When clients take the lead:

Global wealth 2021. Boston Consulting Group. https://www.bcg.com/publications/2021/global-wealth-report-2021-delivering-on-client-needs

Chart:

• Ossinger, J. (2021, November 8). Crypto world hits $3 trillion market cap as ether, bitcoin gain. Bloomberg. https://www.bloomberg.com/news/articles/2021-11-08/crypto-world-hits-3-trillion-market-cap-as-

ether-bitcoin-gain

• The World Bank. (2021). Individuals using the internet (% of population). International Telecommunication Union World Telecommunication/ICT Indicators Database.

https://data.worldbank.org/indicator/IT.NET.USER.ZS

• Zakrzewski, A., Carrubba, J., Frankle, D., Hardie, A., Kahlich, M., Kessler, D., Montgomery, H., Palmisani, E., Shipton, O., Soysal, A., Tang, T., & Xavier, A. (2021, June 10). When clients take the lead:

Global wealth 2021. Boston Consulting Group. https://www.bcg.com/publications/2021/global-wealth-report-2021-delivering-on-client-needs




The Future of Health Care

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – T H E F U T U R E O F H E A L T H C A R E

After several decades of discovery and innovation in technology and life

sciences, a new era of efficient, patient-centric care is upon us.

Genomics is providing novel insights into the links between genetics and

disease, fueling new approaches to providing care and developing therapeutics.

At the same time, the digital transformation of the health care sector is

expanding the boundaries of where care can be provided and optimizing the

care process from end to end.



Genomics Is Ready to Revolutionize Health Care

Innovation, powerful adoption-driving use cases, and declining costs accelerated the adoption of genomics. We expect this to continue, now and in the future.

Method Year Importance Key Processes Advantages/Disadvantages

Sanger

Sequencing1977

Produced 1st

whole human

genome

sequence

1. DNA amplified (copied),

fragments upon adding sequence

indicators

2. Fragments sequenced

individually & combined for full

intended sequence

Advantages

• Fast/cheap for short DNA stretches

Disadvantages

• Slow/costly large-scale sequencing

• Limited detection of genetic variants

Next

Generation

Sequencing

(NGS aka

Short-Read)

2005

Lowered

costs and

spurred

genomic

revolution

1. DNA fragmented, amplified

2. Sequenced all at once (short-

read), aligning

fragments/matching to template

for full intended sequence

Advantages

• Fast/cheap for long DNA stretches

• Can detect genetic variants/mutations

Disadvantages

• Slow/costly for short stretches of DNA

Third

Generation

Sequencing

(Long-Read)

2011

Can explore

unknown

regions of

genome, still

developing

1. DNA prepared without amplifying

or fragmentation

2. Sequence whole molecule at the

same time (long-read)

Advantages

• In-depth insight for long DNA stretches

• No amplification = best variant detection

Disadvantages

• Less accurate/slower vs. NGS (currently)

COST PER GENOME SEQUENCE ($, LHS)

NUMBER OF RECORDED GENOME SEQUENCES (#, RHS)

10,000,000

100,000,000

1,000,000,000

10,000,000,000

$100

$1,000

$10,000

$100,000

$1,000,000

$10,000,000

$100,000,000

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Cost per Genome ($, LHS) # of Sequences (RHS)

Sanger Era NGS + Sanger Era 3rd Gen + NGS + Sanger Era

Genomics is the study of an organism’s complete set of genetic information, or genome. Genomes articulate the order and make-up of our DNA, or our genes.

Genetic Medicines & Therapeutics

Medicines that use synthetic or organic genetic material to interact with genes and treat disease.

• Disease-Risk Assessment

• Infectious Disease Surveillance

• Population Health Insights

• Diagnostics/Testing

• Drug Development

• Precision Medicine

• Gene Therapies

• Gene Editing

• Messenger RNA (mRNA)

Genomic applications are revolutionizing health care in two major areas

Genome Sequencing & Related Processes

Articulating an organism’s or virus’ genome using sequencing technologies.

• RNA Interference, “RNAi” (si/miRNA)

• Antisense Therapies (ASOs)

Sources: Table: Kulski, 2016; Punetha & Hoffman, 2013; Illumina, 2021; Logson, et al., 2020 Chart: Wetterstrand, 2021; GenBank, 2021




Genome Sequencing Offers Novel Insight Into Disease, Transforming Care and Treatments

Drug Development

Gene-disease links establish precise targets for

drug developers, increasing development success

by ~2x (e.g., CCR5-HIV link led to new antivirals).5

Early sequencing technology revealed the close connection between genetics and disease. As the technology evolved, sequencing insights became

more granular and precise, uncovering new genetic links across a wide range of diseases. And now, recent advancements could unlock

sequencing’s full potential.

• Alzheimer’s Disease (AD): Sequencing-related methods link AD to genetics (~70% of cases).

However, already identified links and potential new ones require further study.1

- Initial Link: Sequencing established the APOE gene’s e4 variant as an AD-risk indicator

(sanger, given single-gene analysis), after a related protein was found in AD sufferers.2,3

- New Links: Studies sequencing large populations’ genomes for associated variants (NGS)

found strong links to variants of the BIN1, CLU, & ABCA7 genes, among many others.4

Many diseases are genetic, with risk determined by which genes are inherited.

• HIV-1/AIDS: Genome-wide studies (GWAS) found that variants of the CCR5 and assorted HLA

genes are related to infection resistance & slower disease progression.5

• Malaria: GWAS linked the HBB, ABO, ATPB4, G6PD genes & others with severe malaria, &

discovered that a hybrid GTPA gene reduces severity by 40%.6

• Hepatitis C (HCV): GWAS found that a IFNL3 gene variant is associated with the disease

resolving on its own, as well as over 2x greater treatment efficacy.7,8

Others affect larger populations, with genetics influencing susceptibility/severity.

Genetic insights related to disease are transforming

approaches to care and developing treatments.

Precision Medicine

Insight into how genetic profiles respond to treatment

can inform the best course of care (e.g., HCV-IFNL3

link led to novel precision therapy approaches).9

Demystifying the Unknown

Many catalogued genes & genome stretches remain

unexplored (“dark genome”). Long-read sequencing is

filling the gap, revealing new links & drug targets.10

Sources: 1. Elsheikh, et al., 2020 2. Namba, et al., 1991 3. Strittmater, et al., 1993 4. De Roeck, et al., 2018 5. McLaren & Carrington, 2015 6. Leffler, et al., 2017 7. Thomas, et al., 2009 8. Kwok, et al., 2020 9. Nelson, et al., 2015 10.

Ebbert, et al., 2019




Genetic Medicines May Soon Treat Some of the World’s Most Prevalent and Unaddressed Diseases.

Some Already Are.

Genetic insights brought about a new class of drugs – genetic medicines – that could treat or cure some of the world’s most prevalent diseases.

Sources: Text – 1. U.S. Food and Drug Administration, 2017 2. The BioIndustry Association, 2021 3. U.S. Food & Drug Administration, 2018 4. American Society of Gene + Cell Therapy, 2021 5. Hirakawa, et al., 2020 6. Ledford, 2021 7. Sahin, et al, 2019 8. Chery, 2016 9.

Watts & Corey, 2012 Table: National Institute of Health, 2021; The Global Cancer Observatory, 2021; International Diabetes Federation, 2020; Centers for Disease Control and Prevention, 2021; Hemophilia Federation of America, 2021; KFF, 2021; Muscular Dystrophy

Association, 2019; Hamel, 2006; Roth, et al., 2017; Parkinson’s Foundation, 2021; Jacobs, 2021; Social Care Institute for Excellence, 2020; World Health Organization, 2020

Gene

Editing5,6

mRNA7

Gene

Therapy1,2,3,4

siRNA/

miRNA8,9,10

Antisense

Therapy11,12

Gene

Therapy1,2,3,4

DNA-based drugs modify or manipulate disease-associated genes to treat disease.

• Gene therapies deliver new DNA to cells, typically using viral/bacterial vectors, stem cells, or lipids.

• 2 FDA Approvals: Luxturna for a form of genetic blindness, Zolgensma for genetic spinal muscular atrophy

• Progress: 24 drugs are in phase 3 trials (US), including for sickle cell, hemophilia, and various cancers

mRNA7

Messenger RNA (mRNA) drugs deliver instructions to produce disease-fighting proteins.

• mRNA drugs do not alter DNA. Just like our own mRNA, they tell cells to produce proteins.

• Approved Drugs: COVID-19 was proof-of-concept for mRNA vaccines that demonstrated their efficacy

and ability to be rapidly developed, tested, and produced at scale (2 approved, 1 fully approved).

• Progress: Drugs for HIV, flu, zika, various cancer, & cytomegalovirus (phase 3) are in clinical trials.

Gene

Editing5,6

Therapeutics edit or change an organism’s DNA to treat disease.

• Mechanisms include CRISPR (14 active US trials), zinc finger nucleases (ZFN, 8 active US trials), and

transcription activator-like effector nucleases, (TALEN, 3 active US trials).

• CRISPR uses Cas enzymes to target and edit or delete portions of the DNA that cause disease.

• Success/Progress: Patients trialing a one-time CRISPR drug for rare liver disease had 87% decrease

in disease causing proteins. This was the first evidence of safe/effective gene editing within the body.

siRNA/

miRNA4,8,9

RNA-based drugs (si/miRNA) regulate genes through RNA interference (RNAi).

• RNAi is a naturally occurring process our cells use to regulate genes that uses double-stranded RNA to

degrade or interfere with the mRNA genes use to produce proteins. RNAi drugs induce this process.

• 3 FDA-Approvals include Oxlumo for a genetic liver disease, Onpattro for a fatal neurological disorder

• Progress: Phase 3 trials for acute coronary syndrome, genetic heart disease, and hemophilia; Early

phase/preclinical drugs for COVID-19, flu, various cancers, hypertension, hepatitis, and others

Antisense

Therapy8,9

RNA-based drugs regulate genes using antisense oligonucleotides (ASOs).

• ASOs are single-stranded RNA structures that regulate genes by interfering with mRNA, like RNAi.

DiseaseAffected

Population

Active Genetic

Medicine Trials

Cancers 51M 120

Cardiovascular Diseases 420M 40

Hemophilia 400K 27

Retinitis Pigmentosa

(Genetic Vision Loss)2M 16

HIV/AIDS 38M 12

Sickle Cell Disease 10M 10

Duchenne Muscular

Dystrophy22K 8

Dementia

(Alzheimer's + Others)50M 7

Parkinson's Disease 10M 7

Malignant Melanoma 1M 7

Hepatitis 354M 6

Osteoarthritis 650M 5

Herpes 500M 3

Diabetes 460M 3




AI Speeds Scientific DiscoveryAmy Webb


The genetic sequence for COVID-19 was decoded in just forty hours using machine

learning. The sequence was published on GenBank, which is essentially a biological version of

Wikipedia.

Using AI tools, researchers then looked for certain features in the genetic code: on and off

switches – nucleic acid sequences that mark the end of a gene during transcription and sets of

instructions that define the start and stop points for various proteins.

It took only two days to crack the code. The difference between SARS-CoV-2 and other

coronaviruses is just twelve extra letters in its genome: CCU CGG CGG GCA.

Those twelve letters are what make it so virulent. They are what allow the spike protein to be

activated and to invade human cells. But mRNA could deliver a set of instructions to cells to

target that string of letters and thwart the virus’s attack — and it took only two days to

design that code.

This approach — using synthetic RNA — would be far more

effective and adaptable than long-standing vaccine

protocols, such as making use of weakened viruses, or, as

with each year’s flu vaccine, needing millions of eggs to

produce the necessary doses.

Using AI tools, researchers can look for certain features

in a genetic code.



Genomics Proved Instrumental in the Battle Against COVID-19

Genomics’ role in combatting the COVID-19 pandemic reveals how the science can transform approaches to disease and care.

Next gen sequencing

accelerated as

SARS-Cov-2

genomes offered

insights that were

essential in fighting

COVID-19.

SARS-CoV-2 GENOMES UPLOADED TO GISAID (# IN MILLIONS)

0M

1M

2M

3M

4M

5M

Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21

SARS-CoV-2 TRANSMISSION PATHS (12/2019 – 06/2020)

Sequencing

offered insight

into how the virus

mutated and

traveled across

the globe.

Having the virus’

genome enabled the

rapid development

of diagnostic tools

designed to reduce

transmission.

RT-PCR: Initial sequencing work enabled the prompt

development of RT-PCR tests that look for viral RNA. These

are now seen as the diagnostic gold standard.

Antibody (serological): Antibody, or serological, tests look

for antibodies our bodies develop when exposed to SARS-

Cov-2 and are useful for determining immunity.

Rapid Antigen Tests were developed after researchers

identified virus-specific proteins. They look for evidence of

the proteins and help monitor/limit transmission in real time.

Information on the virus’

genome became an

essential input for drug

developers and

researchers searching

for cures and treatments.

COVID-19 TREATMENTS/VACCINES IN CLINICAL TRIALS, BY CATEGORY

(% OF TOTAL)

19.2%

19.2%

15.2%9.5%

7.6%

7.6%

6.7%

5.8%

Other

Repurposed Drugs

Antibodies

Protein subunit

Antivirals

Cell-based therapies

Viral vector

Inactivated/live virus

RNA-based

DNA-based vaccine

Virus-like particle

Sources: 1. GISAID, 2021 2. The NextStrain Team, 2020 3. Hadfield, et al., 2018 4. FasterCures, 2021

1 2

3 4


The data presented here is intended to rapidly disseminate analysis of important pathogens. Visualizations licensed under CC-BY.



Health Care Enters the Digital Age

Health care’s digital transformation has lagged other sectors, negatively impacting outcomes for patients and increasing costs.

Digital health care solutions can reverse this trend, with advances in telemedicine, health care analytics, administrative

digitalization, and connected health devices.

• Addressable Conditions & Disparities: Up to 8.4 million annual deaths in low- and middle-

income countries can be attributed to poor quality of care.1 Relatedly, 50% of the global

population lacks access to essential health services.2

‒ Solution: Telemedicine and digital health eliminates the geographic boundaries of care.

• Growing & Aging Populations: The global population is projected to reach 10.2 billion by

2060, up from 7.8 billion in 2020 (+30%), with the share of those age 65+ growing from 10%

in 2019 to 22% in 2050.3 Larger populations with increasing proportions of elders require

higher levels of care.

‒ Solution: Telemedicine and digital health can expand the capacity of health care systems.

• Inefficient Health Care Systems: $1.3 trillion, or one-fifth, of annual health care

expenditures in OECD countries come from systemic inefficiencies.4 As mounting costs

continue to impact health care outcomes, the sector must look for solutions to wasted

spending.

‒ Solution: Telemedicine and digital health can drive efficiency and reduce spending waste.

• Technology Gap & Capabilities: Health systems produce up to 30% of the world’s stored

data, but 80% of it is unstructured, meaning it isn’t organized or formalized.5,6

‒ Solution: Telemedicine and digital health can structure data and use it to improve

outcomes.

$5B

$6B

$9B$8B

$15B

$21B

$7B

$0B

$5B

$10B

$15B

$20B

$25B

$30B

2016 2017 2018 2019 2020 2021*

$28B

Q4

2021*

Q1-Q3

2021

Investor interest in

digital health surged

3.5x since 2019

ANNUAL U.S. VENTURE FUNDING FOR DIGITAL HEALTH ($B)

Source: Rock Health, October 2021. *Forecast

Sources: 1. World Health Organization, 2020 2. McNeil & Jacobs, 2019 3. Population Division of the Department of Economic and Social Affairs, 2019 4. Organisation for Economic Co-operation and Development, 2019 5. Huesch & Mosher, 2017 6. Kong, 2019 Chart:

Hawkes, et al., 2021

The Case for Digitalizing Health Care




0%

15%

30%

45%

Same Amount More Less Won't Use

Consumer Pulse: Examining Telemedicine Adoption & Usage

After experiencing 1.5 years of rapid adoption, telemedicine is now a fundamental pillar of health care in the digital age.

• Pandemic-Driven Adoption: Telemedicine adoption skyrocketed over the

pandemic months of 2020, averaging a 7.1% share of medical claims (Mar-

Dec 2020), 42x 2019’s average (0.2%)1

• Use Continues, Stabilizes: After a spike at the pandemic’s onset, usage

stabilized far above pre-pandemic levels. So far in 2021, telemedicine is

averaging a 5.3% share of claims (Jan-Jul), 31x that of 2019.1

• Fills Unmet Need, Finds Niche: Telemedicine became a go-to option for

mental health conditions amid the pandemic’s mounting mental health toll. In

July 2021, 61% of telehealth claims resulted in a mental health diagnosis.1

Source: Text: 1. Global X analysis of data derived from FairHealth, 2021 Charts: FairHealth, 2021; Global X, 2021

• 61% of telemedicine users used it for the first time during the pandemic

• 73% of those who used telemedicine before the pandemic, used it more during

0%

20%

40%

60%

80%

Telemedicine User

0.00%

20.00%

40.00%

60.00%

80.00%

Never Used Telemedicine

RESPONDENTS’ HISTORY OF USING TELEMEDICINE (%)

RESPONDENTS’ EXPECTED FUTURE USE OF TELEMEDICINE (%)

• 68% of users who expect to continue using telemedicine recognize time savings

• 28% of users who expect to continue using telemedicine recognize cost benefits

Note: N = 1044, Top: n = 1044 (chart), n = 747 (bullets); Bottom: n = 745 (chart), n = 705 (bullets)

0.22%

6.51%

0%

2%

4%

6%

8%

10%

12%

14%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2019 2020

TELEMEDICINE’S SHARE OF MEDICAL CLAIM LINES (%)




Remote Patient Monitoring EvolvesRemote patient monitoring (RPM) uses digital

technologies, such as the internet and cloud computing, to

collect medical data from patients in one area and transmit

it for assessment by providers in another location.

Amy Webb

Technology

• Smart toilets with sensors that can detect microbiome health, urinary tract

infections, glucose levels (high sugar is a marker for diabetes), white blood

cell count (marker for infection), protein markers (indicator of kidney

disease), and more.

• Stand-alone wristbands and smart watches that identify stress using heart

rate, voice (via microphones), and temperature.

• Rings that sense pulse oximetry (oxygen saturation level in the blood).

Impact

• RPM can keep older people out of nursing homes and reduce the number

of in-person visits to clinics and hospitals. With telemedicine widely

accepted in the wake of COVID-19 and as the number of chronic health

conditions rises, RPM will gain a stronger foothold in health care.

Consumer devices coming to market in the next few years include:

Soon, lots of data — heart rate, electrocardiograms, blood

pressure, blood oxygen levels, kidney function, and more —

can be mined from consumer devices and used to manage

cases off-site.




Digital Health Tools Could Bolster Preventative Health Efforts and Administrative Efficiency

NorwayJapan

Italy

SpainSweden

Switzerland

Australia

Denmark

Netherlands

Ireland

GermanyFrance

BelgiumFinland

CanadaUnited Kingdom

United States0

2

4

6

8

10

12

14

16

18

0 5 10 15 20

Ran

k o

f O

utc

om

e S

co

re

Rank of Preventative Health Score

PREVENTATIVE HEALTH & HEALTH CARE OUTCOMES, BY COUNTRY

Australia

Canada

France

GermanyNetherlands

New Zealand

Norway

Sweden

United Kingdom

United States0

2

4

6

8

10

0 1 2 3 4 5 6 7 8 9 10

Ran

k o

f O

utc

om

e S

co

re

Rank of Administrative Efficiency Score

ADMINISTRATIVE EFFICIENCY & HEALTH CARE OUTCOMES, BY COUNTRY

Countries that place an emphasis on efficient administration tend to see better outcomes.

Digital Health spans a range of tools that enable proactive approaches to health, including:

• Connected Health Devices: Connected devices, such as continuous glucose monitors and wearables that

track vitals, produce useful data that providers and patients can use to monitor health and inform care.

- 84% of connected device users believe their devices improve their health.1

- 60% of users personally use their connected device to manage their health.1

- 35% of users’ doctors use their connected device to manage their health.1

• Health Care Analytics: AI-based analytics tools can produce preventative health insights using data from

connected devices, electronic health records (EHR), genome sequences, and population-level surveys.

- An AI-based algorithm used data from EHR and mammogram images to diagnose breast cancer at a level

comparable to radiologists.2

Digital Health tools include assorted technologies that enable administrative digitization:

• Digital Health Assistants: AI-based digital assistants can take on administrative tasks that would otherwise

occupy health professionals’ time. These tools increase capacity and can reduce medical errors.

- Nuance Communication’s Dragon Medical One uses AI voice recognition to document doctor-patient

interactions with accuracy. Doctors at Boston Medical Center rated its efficiency improvement 9.2/10.3

• Decentralized Health Data: Health data interoperability (formatted for universal use/access) and AI analytics

tools can produce insights that inform resource allocation and potential preventative health measures.

- Spain’s GMA system uses local comorbidity data and predictive modeling to forecast demand for health

care services and inform budgeting decisions.4

Sources: Text: 1. Global X, 2021 2. Johnson, et al., 2020 3. Nuance Communications, Inc., 2021 4. Organisation for Economic Co-operation and Development, 2019 Charts: Global X analysis of data from Organisation for Economic Co-operation and Development, 2019; World Health Organization,

2021; The World Bank, 2021; Schneider, et al., 2021

Countries that take preventative approaches to health care tend to see better outcomes.




Appendix: Sources – The Future of Health Care

Genomics Is Ready to Revolutionize Health Care

Table:

• Illumina. (2021). Key differences between next-generation sequencing and Sanger sequencing. https://www.illumina.com/science/technology/next-generation-sequencing/ngs-vs-sanger-sequencing.html

• Kulski, J. K. (2016). Next-generation sequencing — An overview of the history, tools, and “omic” applications. In J. K. Kulski (Ed.), Next Generation Sequencing – Advances, Applications, and Challenges

(pp. 3-60). (Biochemistry, Genetics and Molecular Biology). InTech. https://doi.org/10.5772/61964

• Logsdon, G., Vollger, M. R., Eichler, E. E. (2020). Long-read human genome sequencing and its applications. Nature Reviews Genetics, 21, 597-614. https://doi.org/10.1038/s41576-020-0236-x

• Punetha, J., & Hoffman, E. P. (2013). Short read (next-generation) sequencing: A tutorial with cardiomyopathy diagnostics as an exemplar. Circulation: Cardiovascular Genetics, 6(4): 427-434.

https://doi.org/10.1161/CIRCGENETICS.113.000085

Table:

• GenBank. (2021). GenBank and WGS statistics. National Center for Biotechnology Information, U.S. National Library of Medicine. https://www.ncbi.nlm.nih.gov/genbank/statistics/

• Wetterstrand, M. S. (2021). The cost of sequencing a human genome. National Human Genome Research Institute. https://www.genome.gov/about-genomics/fact-sheets/Sequencing-Human-Genome-cost

Genome Sequencing Offers Novel Insight Into Disease, Transforming Care and Treatments

• De Roeck, A., Duchateau, L., Van Dongen, J., Cacace, R., Bjerke, M., Van den Bossche, T., Cras, P., Vandenberghe, R., De Deyn, P. P., Engelborghs, C., & Sleegers, K. (2018). An intronic VNTR affects

splicing of ABCA7 and increases risk of Alzheimer's disease. Acta Neuropathologica, 135(6), 827-837. https://doi.org/10.1007/s00401-018-1841-z

• Ebbert, M. T. W., Jensen, T. D., Jansen-West, K., Sens, J. P., Reddy, J. S., Ridge, P. G., Kauwe, J. S. K., Belzil, V., Pregent, L., Carrasquillo, M. M., Keene, D., Larson, E., Crane, P., Asmann, Y. W.,

Ertekin-Taner, N., Younkin, S. G., Ross, O. A., Rademakers, R., Petrucelli, L., & Fryer, D. (2019). Systematic analysis of dark and camouflaged genes reveals disease relevant genes hiding in plain sight.

Genome Biology, 20(97). https://doi.org/10.1186/s13059-019-1707-2

• Elsheikh, S. S. M., Chimusa, E. R., Mulder, N. J., & Crimi, A. (2020). Genome-wide association study of brain connectivity changes for Alzheimer’s disease. Scientific Reports, 10(1433).

https://doi.org/10.1038/s41598-020-58291-1

• Kwok, A. J., Mentzer, A., & Knight, J. C. (2020). Host genetics and infectious disease: New tools, insights and translational opportunities. Nature Reviews Genetics, 22, 137-153.

https://doi.org/10.1038/s41576-020-00297-6

• Leffler, E. M., Band, G., Busby, G. B. J., Kivinen, K., Le, Q. S., Clarke, G. M., Bojang, K. A., Conway, D. J., Jallow, M., Fatoumatta, S.-J., Bougouma, E. C., Mangano, V. D., Modiano, D., Sirima, S. B.,

Achidi, E., Apinjoh, T. O., Marsh, K., Ndila, C. M., Peshu, N., Williams, T. N., Drakeley, C., Manjurano, A., Reyburn, H., Riley, E., Kachala, D., Molyneux, M., Nyirongo, V., Taylor, T., Thornton, N., Tilley, L.,

Grimsley, S., Drury, E., Stalker, J., Cornelius, V., Hubbart, C., Jeffreys, A. E., Rowlands, K., Rockett, K. A., Spencer, C. C. A., Kwiatkowski, D. P., & Malaria Genomic Epidemiology Network. (2017).

Resistance to malaria through structural variation of red blood cell invasion receptors. Science, 16(6343). DOI: 10.1126/science.aam6393

• McLaren, P. J., & Carrington, M. (2015). The impact of host genetic variation on infection with HIV-1. Nature Immunology, 16(6), 577-583. https://doi.org/10.1038/ni.3147

• Namba, Y., Tomonaga, M., Kawasaki, H., Otomo, E., & Ikeda, K. (1991). Apolipoprotein E immunoreactivity in cerebral amyloid deposits and neurofibrillary tangles in Alzheimer's disease and kuru plaque

amyloid in Creutzfeldt-Jakob disease. Brain Research, 541(1), 163-166. https://doi.org/10.1016/0006-8993(91)91092-F

• Nelson, M. R., Tipney, H., Painter, J. L., Shen, J., Nicoletti, P., Shen, Y., Floratos, A., Sham, P. C., Li, M. J., Wang, J., Cardon, L. R., Whittaker, J. C., & Sanseau, P. (2015). The support of human genetic

evidence for approved drug indications. Nature Genetics, 47, 856-860. https://doi.org/10.1038/ng.3314

• Strittmatter, W. J., Saunders, A. M., Schmechel, D., Pericak-Vance, M., Enghild, J., Salvesen, G. S., & Roses, A. D. (1993). Apolipoprotein E: High-avidity binding to beta-amyloid and increased frequency of

type 4 allele in late-onset familial Alzheimer disease. Proceedings of the National Academy of Sciences of the United States of America, 90(5), 1977-1981. https://doi.org/10.1073/pnas.90.5.1977

• Thomas, D. L., Thio, C. L., Martin, M. P., Qi, Y., Ge, D., O’Huigin, C., Kidd, J., Kidd, K., Khakoo, S. I., Alexander, G., Goedert, J. J., Kirk, G. D., Donfield, S. M., Rosen, H. R., Tobler, L. H., Busch, M. P.,

McHutchison, J. G., Goldstein, D. B., & Carrington, M. (2009). Genetic variation in IL28B and spontaneous clearance of hepatitis C virus. Nature, 461(7265), 798-801. https://doi.org/10.1038/nature08463





Genetic Medicines May Soon Treat Some of the World’s Most Prevalent and Unaddressed Diseases. Some Already Are.

Text:

• American Society of Gene + Cell Therapy. (2021). ASGCT clinical trials finder. https://asgct.careboxhealth.com/

• Chery, J., (2016). RNA therapeutics: RNAi and antisense mechanisms and clinical applications. Postdoc Journal, 4(7), 35-50. https://doi.org/10.14304/surya.jpr.v4n7.5

• Hirakawa, M. P., Krishnakumar, R., Timlin, J. A., Carney, J. P., & Butler, K. S. (2020). Gene editing and CRISPR in the clinic: Current and future perspectives. Bioscience Reports, 40(4), BSR20200127.

https://doi.org/10.1042/BSR20200127

• Ledford, H. (2021, June 29). Landmark CRISPR trial shows promise against deadly disease. Nature. https://doi.org/10.1038/d41586-021-01776-4

• Sahin,U., Karikó, K., Türeci, Ö. (2019, September 14). mRNA-based therapeutics — developing a new class of drugs. Nature Reviews Drug Discovery, 13, 759-780. https://doi.org/10.1038/nrd4278

• The BioIndustry Association. (2021). Cell and gene therapy. https://www.bioindustry.org/policy/strategic-technologies/cell-and-gene-therapy.html

• U.S. Food & Drug Administration. (2017, July 25). What is gene therapy? https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/what-gene-therapy

• U.S. Food & Drug Administration. (2018, March 16). FDA approves novel gene therapy to treat patients with a rare form of inherited vision loss. https://www.fda.gov/news-events/press-announcements/fda-

approves-novel-gene-therapy-treat-patients-rare-form-inherited-vision-loss

• Watts, J. K., & Corey, D. R. (2012). Gene silencing by siRNAs and antisense oligonucleotide in the laboratory and the clinic. The Journal of Pathology, 226(2), 365-379. https://doi.org/10.1002/path.2993

Table:

• Centers for Disease Control and Prevention. (2021, July 19). Global viral hepatitis: Millions of people are affected. https://www.cdc.gov/hepatitis/global/index.htm

• Hamel, C., (2006). Retinitis pigmentosa. Orphanet Journal of Rare Diseases, 1(40). https://doi.org/10.1186/1750-1172-1-40

• Hemophilia Federation of America. (2021). Hemophilia A. https://www.hemophiliafed.org/home/understanding-bleeding-disorders/what-is-hemophilia/hemophilia-a/

• International Diabetes Federation. (2020, December 2). Diabetes facts & figures. https://idf.org/aboutdiabetes/what-is-diabetes/facts-figures.html

• Jacobs, S. (2021, January 13.) Assessing global health burden of knee osteoarthritis and modifiable risk factors. Rheumatology Advisor.

https://www.rheumatologyadvisor.com/home/topics/osteoarthritis/assessing-global-health-burden-of-knee-oa-and-modifiable-risk-factors/

• KFF. (2021, March 2). The global HIV/AIDS epidemic. https://www.kff.org/global-health-policy/fact-sheet/the-global-hivaids-epidemic/

• Muscular Dystrophy Association. (2019, February). What is...Duchenne Muscular Dystrophy? https://www.mda.org/sites/default/files/2020/10/MDA_DMD_Fact_Sheet_Oct_2020.pdf

• National Institute of Health. (2021). Genetic medicine critical trials. U.S. National Library of Medicine. https://clinicaltrials.gov/ct2/results?cond=&term=&cntry=&state=&city=&dist=

• Parkinson’s Foundation. (2021). Statistics. https://www.parkinson.org/Understanding-Parkinsons/Statistics

• Roth, G., Johnson, C., Abajobir, A., Abd-Allah, F., Abera, S. F., Abyu, G., Ahmed, M., Aksut, B., Alam, T., Alam, K., Alla, F., Alvis-Guzman, N., Amrock, S., Ansari, H., Arnlov, J., Asayesh, H., Atey, T. M.,

Avila-Burkos, L., Awasthi, A…Murray, C. (2017). Global, regional, and national burden of cardiovascular diseases for 10 causes, 1990 to 2015. Journal of the American College of Cardiology, 70(1), 1-25.

https://doi.org/10.1016/j.jacc.2017.04.052

• Social Care Institute for Excellence. (2020, March). Dementia: At a glance. https://www.scie.org.uk/dementia/about/

• The Global Cancer Observatory. (2021, March). World. World Health Organization - International Agency for Research on Cancer. https://gco.iarc.fr/today/data/factsheets/populations/900-world-fact-

sheets.pdf

• World Health Organization. (2020, May 1). Massive proportion of world’s population are living with herpes infection. https://www.who.int/news/item/01-05-2020-massive-proportion-world-population-living-

with-herpes-infection

Genomics Proved Instrumental in the Battle Against COVID-19

• FasterCures. (2021). COVID-19 treatment and vaccine tracker. Milken Institute. https://covid-19tracker.milkeninstitute.org/

• GISAID. (2021). Homepage. https://www.gisaid.org/

• Hadfield, J., Megill, C., Bell, S. M., Huddleston, J., Potter, B., Callender, C., Sagulenko, P., Bedford, T., & Neher, R. A. (2018). Nextstrain: Real-time tracking of pathogen evolution. Bioinformatics, 34(23),

4121-4123. https://doi.org/10.1093/bioinformatics/bty407

• The NextStrain Team. (2020, August). Genomic epidemiology of novel coronavirus - Global subsampling. https://nextstrain.org/ncov/gisaid/global?d=map,entropy,frequencies&p=full&transmissions=show





Health Care Enters the Digital Age

Text:

• Huesch, M. D., & Mosher, T. J. (2017, May 4). Using it or losing it? The case for data scientists inside health care. NEJM Catalyst. https://catalyst.nejm.org/doi/full/10.1056/CAT.17.0493

• Kong, H.-J. (2019). Managing unstructured big data in healthcare system. Health Informatic Research, 25(1), 1-2. https://doi.org/10.4258/hir.2019.25.1.1

• McNeill, K., & Jacobs, C. (2019, September 20). Half of the world’s population lack access to essential health services – Are we doing enough? Economic Forum.

https://www.weforum.org/agenda/2019/09/half-of-the-world-s-population-lack-access-to-essential-health-services-are-we-doing-enough/

• Organisation for Economic Co-operation and Development. (2019, November 21). Health in the 21st century: Putting data to work for stronger health systems. OECD Health Policy Studies, OECD

Publishing, Paris. https://doi.org/10.1787/e3b23f8e-en

• Population Division of the Department of Economic and Social Affairs. (2019). 2019 Revision of world population prospects. United Nations Secretariat. Retrieved September, 2021, from

https://population.un.org/wpp/

• World Health Organization. (2020, July, 20). Quality health services. https://www.who.int/news-room/fact-sheets/detail/quality-health-services

Chart:

• Hawkes, C., Shah, P., & Krasniansky, A. (2021, October 4). Q3 2021 digital health funding: To $20B and beyond! Rock Health. https://rockhealth.com/insights/q3-2021-digital-health-funding-to-20b-and-

beyond/

Consumer Pulse: Examining Telemedicine Adoption & Usage

Text:

• FairHealth. (2021). FairHealth monthly telehealth regional tracker. https://www.fairhealth.org/states-by-the-numbers/telehealth

Charts:

• FairHealth. (2021). FairHealth monthly telehealth regional tracker. https://www.fairhealth.org/states-by-the-numbers/telehealth

• Global X. (2021, October). Survey on Telemedicine & Digital Health [Unpublished]. Research & Strategy Team at Global X. New York, NY.

Digital Health Tools Could Bolster Preventative Health Efforts and Administrative Efficiency, Improving Outcomes

Text:

• Global X. (2021, October). Survey on Telemedicine & Digital Health [Unpublished]. Research & Strategy Team at Global X. New York, NY.

• Johnson, K. B., Wei, W.-Q., Weeraratne, D., Frisse, M. E., Misulis, K., Rhee, K., Zhao, J., Snowdon, J. L. (2020). Precision medicine, AI, and the future of personalized health care. Clinical and Translational

Science, 14(1), 86-93. https://doi.org/10.1111/cts.12884

• Nuance Communications, Inc. (2021). Improved clinician experience at Boston Medical Center. https://www.nuance.com/content/dam/nuance/en_us/collateral/healthcare/case-study/cs-dragon-medical-one-

boston-medical-center-improves-clinician-experience-en-us.pdf

• Organisation for Economic Co-operation and Development. (2019, November 21). Health in the 21st century: Putting data to work for stronger health systems. OECD Health Policy Studies, OECD

Publishing, Paris. https://doi.org/10.1787/e3b23f8e-en

Charts:

• Organisation for Economic Co-operation and Development. (2021). OECD.Stat. https://stats.oecd.org/Index.aspx?ThemeTreeId=9

• Schneider, E. C., Shah, A., Doty, M. M., Tikkanen, R., Fields, K., & Williams II, R. D. (2021, August 4). Mirror, mirror 2021: Reflecting poorly – Health care in the U.S. compared to other high-income

countries. The Commonwealth Fund. https://doi.org/10.26099/01dv-h208

• The World Bank. (2021). World Bank Open Data database. https://data.worldbank.org/

• World Health Organization. (2021). Global Health Observatory database. Retrieved October 2021. https://www.who.int/data/gho




Food + Water

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – F O O D + W A T E R

Unsustainable practices around food and water are driving food insecurity,

water scarcity, and climate change. As population growth continues, innovation

must upend our approach to food and water.

Production and consumption patterns must be disrupted. Precision agriculture

and next-gen food products can do just this, offering the potential to feed the

world without compromising the planet. New approaches to natural resources

are equally important. Desalination untaps the ocean as a solution to water

scarcity, while controlled environment agriculture redefines the meaning of

cultivatable land.

Solving the challenges of tomorrow requires an understanding of how structural

trends converge and adopting solutions that transcend them. In this chapter, we

explore these solutions.



Structural Trends Are Fueling Negative Feedback Loop of Global Crises

Food

Insecurity

Water

Scarcity

Land

Degradation

Climate

Change

• Population growth is increasing demand for agriculture products

– Global population is projected to reach 10.2B by 2060, up from 7.8B in 2020 (+30%)1

• Aging populations increase demand for agricultural products while decreasing productivity

– Global share of 65+ population: 10% (2019) vs. 22% (2050)1

• Agriculture employment is declining relative to other sectors2

– 1995: 41% agriculture, 37% services, 22% industry

– 2019: 27% agriculture, 51% services, 23% industry

SHIFTING POPULATION DYNAMICS APPLY STRESS ON FOOD SYSTEMS

• Agriculture is input- and resource-intensive, to an unsustainable degree

‒ Agricultural practices make ~70% of water withdrawals & 18% of emissions3,4

• Humans use inordinate shares of land for agriculture

‒ 43% of the world’s ice- and desert-free land is agricultural3

• Rampant population growth could pressure producers, leading to labor shortages

‒ Food production must increase 50% by 2050 to accommodate growth5

AGRICULTURAL PRODUCTION CANNOT KEEP UP WITH POPULATIONS

• Current diets are carbon-intensive & calorically inefficient

‒ Livestock account for 80% of all agricultural land use but only 1.9% of calories input

through feedstock3,7

• Distribution strategies & consumption habits are overly wasteful

‒ 50% of global food loss occurs during aggregation, distribution, & processing5

‒ American households waste 32% of their food, due to overbuying/portion control8

CONSUMPTION HABITS WASTE ALREADY CONSTRAINED RESOURCESWater Scarcity

• Current water use is inefficient, reducing

availability » Water Scarcity

• Constrains maximum caloric output & food

availability » Food Insecurity

• Excess pollution or lack of water corrupts

once arable land » Land Degradation

Food Insecurity

• Heightened livestock cultivation requires

more sustenance » Food Insecurity

• Current diet mixes are highly water-

intensive » Water Scarcity

• Agricultural practices need more output

and thus more land » Land Degradation

Land Degradation/Overuse

• Degradation forces producers to overutilize

arable land » Land Degradation

• Land-intensive operations pollute & deplete

clean water sources » Water Scarcity

• In the long run, land degradation limits caloric

production » Food Insecurity

Climate Change

• Droughts, unusual climate patterns &

pollution » Water Scarcity

• Rising sea levels salinize or otherwise ruin

arable land » Land Degradation

• Intense heat and land degradation threatens

food production » Food Insecurity

Sources:1. Population Division of the Department of Economic and Social Affairs, 2019 2.The World Bank, 2021 3. Poore & Nemecek, 2018 4. Ge, et al., 2020 5. FAO, et al., 2020 6. Gustin, 2018 7. Alexanderet al., 2016 8. Sharkey, 2020




Disruptive Technologies & Innovations Offer Solutions to Unsustainable Trends

Agricultural Technology (AgTech)

AgTech prudently uses water and land to maximize

food output. This optimization of inputs reduces the

impact of farming on water scarcity and land

degradation, while greater production counters food

insecurity.

Key Segments:

• Precision Agriculture: Techniques employed to

increase crop yields and reduce agricultural

inputs

• Agricultural Robots: Often autonomous

technologies for reducing labor and other inputs

• Controlled Environment Agriculture (CEA): Use

of controlled environments to optimize farming

Food Innovation

Food Innovation puts higher yield crops to use

while reducing wasted agricultural outputs and other

harmful externalities. More sustainable consumption

habits save resources throughout food systems.

Key Segments:

• Alternative Dairy: Primarily made from soy,

almonds, coconuts, rice, and oat extracts

• Plant-Based Foods: Predominantly made from

protein-rich plants like peas, legumes, and soy

• Insect-Protein: Products that typically contain

protein from crickets (as well as other

orthopterans) and mealworms

• Lab-Grown Meat: Animal meat grown in

laboratories, produced by in vitro animal cell

cultures

Clean Water Technology

Clean Water Technology targets vulnerabilities in

the water cycle to bolster water quantities available

to growing populations. Access to water promotes

elevated food production and sustainable land use.

Key Segments:

• Water Sourcing: Water recycling (including

water reclamation), purification, and

conservation

• Water Treatment + Distribution: Altering water

so it is suitable for storage, disruption, and

consumption

• Wastewater Management: Disposal followed by

treatments ultimately facilitating water reuse

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N - F O O D + W A T E R



Precision Agriculture and Agricultural Robots Will Bring Farming Into the 21st Century

Precision agriculture seeks to maximize crop yields while conserving inputs (water, fertilizer, pesticides, labor), leveraging

Internet of Things (IoT), Artificial Intelligence (AI), and Agricultural Robots (AgRobots) to monitor and address the precise

needs of specific crops and livestock.

Sources: 1. Association of Equipment Manufacturers, et al., 2021 2. Castrignano, et al., 2020 3. Cleary, 2017 4. John Deere, 2021 5. Kollewe & Davies, 2019

• Sensors: IoT-enabled sensors monitor pivotal factors such as

moisture, nutrient levels, soil acidity, as well as plant and

livestock health and relay this information to the appropriate

application.

• GPS: Exact positioning metrics complement sensors to allow

farmers and/or autonomous robots to apply data with geographic

accuracy.

• Software + AI: Data accumulates from sensors/GPS to offer

actionable advice for farmers or instructions for AgRobots that

promote better agricultural outcomes.

• AgRobots: Machines, such as autonomous tractors and drones,

splice sensor and GPS data with AI to autonomously carry out

tasks such as tilling, mowing, and monitoring crops and livestock.

Precision Ag & Robots Converge on Smart Farms




Cloud-based AI systems can make use

of satellite imagery, moisture maps, and

other visual data to enable real-time

decision making for precision agriculture.

Cloud-based API layers enable

normalization and contextualization

of datasets.

Google Cloud has agricultural cloud

projects online now in India, while

Microsoft’s Farm Beats runs on Azure.

Amy WebbAg CloudsTechnology to Bring Unprecedented Data to Farming For an industry that began 12,000 years ago, relatively

little has changed in agriculture. There is still a tremendous

amount of uncertainty and volatility. Yet, every country –

every person – relies on the output of farms and farmers.

Artificial intelligence and dedicated

agricultural clouds are finally

revolutionizing the agricultural sector.

Cloud platforms help farmers increase

crop yields significantly. Deep Learning

systems use multi-layered convolutional

visual pattern recognition –– essentially,

a way of comparing healthy plants to

disease-ridden plants –– to predict the

health of fields and to assess early signs

of disease.

Farms produce metadata, in the form

of crop data.




Controlled Environment Agriculture (CEA) Overcomes Land and Resource Shortages

Sources: Text: 1. Gerretsen, 2020 2. S2G Ventures, 2020 Charts: National Agricultural Statistics Service, 2021; Agrilyst, 2017; Gerretsen, 2020.; Burgos & Stapel, 2018; Hoekstra, 2008; Shatilov, Razin, & Ivanova, 2019

• Quality/Productivity: Year-round production, more crop turns, increased shelf-life2

• Less Waste: Proximity to user allows for shorter supply chain and thus less waste

Vertical farming can bolster agricultural efficiency and multiply potential output

CEA is the cultivation of plants and their products in non-traditional environments like vertical farms (indoor farms with

vertically arranged stacks of crops), container farms (indoor farms in shipping containers), greenhouses, and micro-farms.

Renewable vertical farms could output more, using fewer inputs than traditional farms

RESOURCE USE & OUTPUT: RENEWABLY-POWERED VERTICAL FARM VS. TRADITIONAL U.S. FARM

LETTUCE OUTPUT PER 1 ACRE (t)

Notes: Assumes vertical farm is fully renewably-powered. Land use calculation does not take it account space required for

renewable power generation. Traditional farm yield based on U.S. 2020 average.

POTENTIAL

ADVANTAGES

ACRES OF LAND NEEDED TO PRODUCE 1 TON OF LETTUCE

kg CO2 EMITTED

PER TON OF LETTUCE

16 t

126 t

TraditionalOpen Farm

Green VerticalFarming Facility

160 kg

540 kg



118 kL

6 kL



0.01 ac

0.06 ac

0.09 ac

0.09 ac

0.10 ac

0.11 ac

0.39 ac

VerticalFarming

U.S.(Ca)

Spain

Japan

China

Italy

India

• Geographic: Saves space, can grow closer to the end consumer

• Less Inputs: Uses less herbicide, land, & water (95% less)1

kL of WATER USED

PER TON OF LETTUCE




1,000

1,400

1,800

2,200

2,600

2020 2030 2040 2050

Current Annual Food Prod.

Water Withdrawals

WATER USE ACROSS DIETS, BY SCENARIO (109 M3)

500

1,000

1,500

2,000

2020 2030 2040 2050

Current Cultivated Area

LAND USE ACROSS DIETS, BY SCENARIO (106 HECTARE)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2020 2030 2040 2050

1.5⁰C Emissions 2050 Pathway

ANNUAL EMISSIONS ACROSS DIETS, BY SCENARIO (Gt/CO2e)

Plant-Based and Lab-Grown Meat Can Help Alleviate Global Food, Water, and Climate Challenges

2020 2030 2040 2050

Total 7.7 8.5 9.1 9.6

Nourished 7.0 7.7 8.2 8.7

Undernourished 0.7 0.8 0.9 1.0

• Current Diet

– Protein kcals (40% animal, 60% plant)

– Fat kcals (44% animal, 66% plant)

– Carb kcals (4% animal, 96% plant)

• Reduced Meat Diet

– Protein kcals (20% animal, 80% plant)

– Fat kcals (27% animal, 73% plant)

– Carb kcals (1% animal, 99% plant)

• Plant-Based Diet (100% kcals plant)

Global Diets Assessed

• CN – 91% of global pop consumes calories

needed to maintain healthy BMI

• FN – 100% of global population consumes

calories needed to maintain healthy BMI

• Ratio of protein/fat/carb considered for dietary

needs & food item (8 animal/28 crops

products)

Caloric Consumption Scenarios

Projected Population (in billions)

Chart Legend

Global population’s current reliance on animal products

for protein & fat is inefficient…

• 36% of global crop calories are consumed by livestock as animal

feed. Only 4% of those calories translate to calories we consume.1

Sources: Text: 1. Cassidy, et al., 2013; 2. Global X analysis of data derived from charts sources. Charts: Modeling/analysis by Global X ETFs using data from Population Division of the Department of Economic and Social Affairs, 2019; Food and Agriculture Organization of the

United Nations, 2019; The World Bank, 2019; NCD Risk Factor Collaboration, 2020; Institute of Medicine of the National Academies, 2005; World Health Organization, 2007; Goethe Universtät, 2010; Poore & Nemecek, 2018; Nutritionix, 2021

• 85% of agricultural land is used to cultivate livestock2

• 62% of agricultural water use is for livestock cultivation2

Amid mounting food insecurity, water scarcity, & climate

change, livestock consumption trends are unsustainable…

By 2050, the global population is projected to reach 9.7

billion. If diets…2

Maintain the

same reliance

on livestock:

Increase of Agriculture's Share

of Total Water Withdrawals11%

Increase of 2020 Cultivated Area

(Arable + Permanent)24%

% of 1.5⁰C Emissions Pathway 2050

Target for Food Systems (Gt/CO2e)172%

Transition to

be fully plant-

based:

Increase of Agriculture's Share

of Total Water Withdrawals7%

Increase of 2020 Cultivated Area

(Arable + Permanent)-57%

% of 1.5⁰C Emissions Pathway 2050

Target for Food Systems (Gt/CO2e)29%




Synthetic-Bio Agriculture

Bioreactors

• A bioreactor is a high-tech vat for

growing organisms.

• Bioreactors are used in industrial

processes to cultivate organisms

(such as animal cells, mammalian

cells, yeast cells, and bacteria)

under controlled conditions.

• Global bioreactor market value

could reach $16 billion by 2027.

• Demand for COVID-19 vaccine

production boosted bioreactor

sales during the pandemic.

Intention

• By the year 2040, many

societies will think it’s immoral to

eat traditionally produced meat

and dairy products or to harvest

fish for food.

• We will grow thick, juicy steaks

from a slurry of stem cells

cultured inside a bioreactor ––

and we might cross that tissue

with another plant or animal to

enhance its flavor and texture.

Efficiency

• Scientists at Oxford and the University of Amsterdam have estimated that

cultured meat would require 7 to 45 percent less energy, occupy 99 percent

less land, and produce 78 to 96 percent less greenhouse gas than

conventional animals farmed for consumption.

• Synthetic-biology-centered agriculture promises to shrink the distance

between essential operators in the supply chain. In the future, large

bioreactors will be situated just outside major cities, where they will produce

the cultured meat required by institutions such as schools, government

buildings, hospitals, local restaurants and grocery stores. Rather than

shipping tuna from the Pacific Ocean to the Midwest, which requires a

complicated, energy-intensive cold chain, fish could instead be cultured in

any landlocked state. Imagine the world’s most delicate, delicious bluefin

tuna sushi sourced not from the waters near Japan, but from a bioreactor in

Hastings, Nebraska.

Late in 2020, Singapore approved a local competitor

to the slaughterhouse: a bioreactor, run by US-based

Eat Just, which produces cultured chicken nuggets.

In Eat Just’s bioreactors, cells taken from live

chickens are mixed with a plant-based serum and

grown into an edible product.

Finless Foods, based in California, is developing

cultured bluefin tuna meat, from the sought-after

species now threatened by long-standing overfishing.

Imagine Sushi-Grade Tuna Grown in a Lab in Nebraska

Amy Webb




Desalination Could Be Key to Addressing the Global Water Crisis

Sources: Text 1. National Geographic Encyclopedia, 2021; 2. Little, 2021 Charts/Table: Top: Global X analysis of data from AQUASTAT, 2017; Population Division of the Department of Economic and Social Affairs, 2019 Bottom: Little, 2021

6M

7M

8M

9M

10M

1995 2000 2005 2010 2015 2020 2025 2030

RENEWABLE WATER RESOURCES PER CAPITA(MILLION M3/GLOBAL POPUATION)

Despite its apparent abundance,

freshwater is a scarce and finite

resource.

As populations grow and

unsustainable water withdrawal

as well as use worsen, this fact

is becoming palpable.

Seawater desalination is a

process that turns water from

the ocean into drinking water.

Oceans cover over 70% of our

plant.1

Global desalination capacity

increased 5x from 2000 to 2020,

to 44 billion m3 per year.2

If adoption trends continue,

desalination could help end the

global water crisis.

2020 2050* 2080*

East Asia / Pacific 5,850 53,237 40,850

Eastern Europe / Central Asia 57,001 100,229 228,428

Latin America / Caribbean 287 2,779 14,290

Middle East / North Africa 272,224 390,399 465,098

Southern Asia 220,892 2,102,101 2,099,955

Sub-Saharan Africa 43,849 158,415 202,971

Western Europe 442 427 382

Total 600,546 2,807,587 3,051,974

Population Facing

Consistent Water Scarcity (millions)Region

(Aggregated, Country-Level)

GLOBAL DESALINATION PLANT CAPACITY (BILLION M3 PER YEAR, LHS)

GLOBAL DESALINATION PLANTS IN OPERATION (RHS, THOUSANDS)

$4.5B $4.6B$5.2B

$5.5B$6.0B

$4.9B

$7.6B

$9.6B

$0B

$2B

$4B

$6B

$8B

$10B

2015 2016 2017 2018 2019 2020 2021* 2022*

GLOBAL DESALINATION MARKET($ BILLIONS)

0K

5K

10K

15K

20K

25K

0B

10B

20B

30B

40B

50B

60B

70B

2017 2018 2019 2020 2021* 2022* 2023* 2024* 2025* 2026*


*Forecast



Alternative Milk, Meat, and Dairy Adoption Set to Enter the Mainstream

By 2030, alternative foods could achieve a 4.1% market share, representing an $86 billion opportunity.* *SHIFTING SENTIMENT, SUSTAINABILITY, AND HEALTH

FACTORS COULD DRIVE ADOPTION OF ALTERNATIVE FOODS

GLOBAL ALTERNATIVE MILK REVENUES ($B)

$15B $17B $19B $21B $24B$27B

$30B$34B

$38B$43B

$48B

2020 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*

GLOBAL ALTERNATIVE DAIRY REVENUES ($B)

$3B $4B $5B $5B$6B

$7B$8B

$9B$10B

$11B$13B

2020 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*

GLOBAL ALTERNATIVE MEAT REVENUES ($B)

$6B $7B $8B $9B$11B

$13B$15B

$17B$19B

$22B$26B

2020 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*

• Current Consumption: 75% of Americans have purchased/consumed alternative milk products and

63% have purchased/consumed alternative meat products.1

• Future Consumption: 80% of Americans have either purchased or are open to purchasing alternative

meat products, compared to 16% who are unlikely to try such products in the future.2

Source: Text: Global X, 2021a; N = 568, 569, and 566 U.S. respondents for alternative milk, alternative meat, and alternative dairy products respectively. Chart: Global X Forecasts based on information from The Original Oatly, 2021; Renub

Research, 2021; Beyond Meat, 2021; Food and Agriculture Organization of the United Nations, 2016; Wrick, 2003; McHugh, 2018; Haas, et al., 2019; Research and Markets, 2018; Research and Markets, 2020; Euromonitor International, 2021




Appendix: Sources – Food + Water

Structural Trends Are Fueling Negative Feedback Loop of Global Crises

• Alexander, P., Brown, C., Arneth, A., Finnigan, J., Rounsevell, M. D. A. (2016). Human appropriation of land for food: The role of diet. Global Environmental Change, 41, 88-98.

https://doi.org/10.1016/j.gloenvcha.2016.09.005

• FAO, IFAD, UNICEF, WFP, & WHO. (2020). The state of food security and nutrition in the world 2020: Transforming food systems for affordable healthy diets. Food and Agriculture Organization of the United

Nations. https://doi.org/10.4060/ca9692en

• Ge, M., Friedrich, J., & Vigna, L. (2020, February 6). 4 charts explain greenhouse gas emissions by countries and sectors. World Resources Institute. https://www.wri.org/insights/4-charts-explain-

greenhouse-gas-emissions-countries-and-sectors

• Gustin, G. (2019, July 18). Ag’s climate challenge: Grow 50% more food without more land or emissions. Inside Climate News. https://insideclimatenews.org/news/18072019/food-climate-change-solutions-

agriculture-beef-waste-forests-growing-population-wri-report/

• Poore, J., & Nemecek, T. (2018). Reducing food’s environmental impacts through producers and consumers. Science Magazine, 360(6392), 987-992. DOI: 10.1126/science.aaq0216



• Sharkey, L. (2020, February 9). How much food does the average US household waste? Medical News Today. https://www.medicalnewstoday.com/articles/study-suggests-u-s-households-waste-nearly-a-

third-of-the-food-they-acquire

• The World Bank. (2021, January 29). Employment in agriculture (% of total employment) (modeled ILO estimate). International Labour Organization, ILOSTAT Database.

https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS?contextual=employment-by-sector&end=2019&start=1995&view=chart

Precision Agriculture and Agricultural Robots Synergies Will Bring Farming Into the 21st Century

• Association of Equipment Manufacturers, American Soybean Association, CropLife America, & National Corn Growers Association. (2021, January). The environmental benefits of precision agriculture in the

United States. [PowerPoint slides]. Association of Equipment Manufacturers. https://newsroom.aem.org/download/977839/environmentalbenefitsofprecisionagriculture-2.pdf

• Castrignano, A., Buttafuoco, G., Khosla, R., Mouazen, A., Moshou, D., & Naud, O. (Eds.) (2020). Agricultural internet of things and decision support for precision smart farming. Academic Press.

• Cleary, D. (2017, March 29). Precision agriculture: Potential and limits. The Nature Conservancy. https://www.nature.org/en-us/what-we-do/our-insights/perspectives/precision-agriculture-potential-and-limits/

• John Deere. (2021, March 2). John Deere launches See & Spray™ select for 400 and 600 series sprayers. https://www.deere.com/en/our-company/news-and-announcements/news-

releases/2021/agriculture/2021mar02-john-deere-launches-see-and-spray-select/

• Kollewe, J., & Davies, R. (2019, May 26). Robocrop: World's first raspberry-picking robot set to work. The Guardian. https://www.theguardian.com/technology/2019/may/26/world-first-fruit-picking-robot-set-to-

work-artificial-intelligence-farming

Controlled Environment Agriculture (CEA) Overcomes Land and Resources Shortages

Text:

• Gerretsen, I. (2020, July 23). Farming in the desert: Are vertical farms the solution to saving water? EcoWatch. https://www.ecowatch.com/vertical-farming-2646563811.html

• S2G Ventures. (2020). Growing beyond the hype. https://www.s2gventures.com/reports/growing-beyond-the-hype%3A--controlled-environment-agriculture





Controlled Environment Agriculture (CEA) Overcomes Land and Resources Shortages (continued)

Charts:

• Agrilyst. (2017, August). State of indoor farming 2017. https://www.cropscience.bayer.com/sites/cropscience/files/inline-files/stateofindoorfarming-report-2017.pdf

• Burgos, S., & Stapel, M. (2018, December). CO2 emissions scoping report: Comparison between different farming methods in lettuce production. OneFarm. https://www.onefarm.io/post/2018/12/04/our-new-

report-sustainable-vertical-farming-outperforms-other-agricultural-methods-on-co2

• Gerretsen, I. (2020, July 23). Farming in the desert: Are vertical farms the solution to saving water? EcoWatch. https://www.ecowatch.com/vertical-farming-2646563811.html

• Hoekstra, A. Y. (2008). The water footprint of food. In J. Förare (Ed.), Water for food. The Swedisch Research Council for Environment, Agricultural Sciences and Spatial Planning (Formas).

http://www.waterfootprint.org/Reports/Hoekstra-2008-WaterfootprintFood.pdf

• National Agricultural Statistics Service. (2021, February). Vegetables 2020 Summary. United States Department of Agriculture. https://downloads.usda.library.cornell.edu/usda-

esmis/files/02870v86p/j6731x86f/9306tr664/vegean21.pdf

• Shatilov, M., Razin, A., & Ivanova, M. (2019). Analysis of the world lettuce market. IOP Conference Series: Earth and Environmental Science. 395 012053 https://doi.org/10.1088/1755-1315/395/1/012053

Plant-based and Lab-Grown Meat Can Help Alleviate Global Food, Water, and Climate Challenges

Text:

• Cassidy, E. S., West, P. C., Gerber, J. S., Foley, J. A. (2013). Redefining agricultural yields: from tonnes to people nourished per hectare. Environmental Research Letters, 8(3), 1-8.

https://doi.org/10.1088/1748-9326/8/3/034015

Charts:

• Food and Agriculture Organization of the United Nations. (2019). Food Balances. FAOSTAT database. https://www.fao.org/faostat/en/#home

• Goethe Universität. (2010). Global data set of monthly irrigated and rainfed crop areas around the year 2000 (MIRCA2000). Retrieved 2021, from https://www.uni-frankfurt.de/45218023/MIRCA

• Institute of Medicine of the National Academies. (2005). Dietary reference intakes for energy, carbohydrate, fiber, fat, fatty acids, cholesterol, protein, and amino acids. The National Academies Press.

https://doi.org/10.17226/10490.

• NCD Risk Factor Collaboration (NCD-RisC) (2019). Evolution of adult height over time – Country-specific data. https://ncdrisc.org/data-downloads-height.html

• Nutritionix. (2021). Nutritional information. https://www.nutritionix.com/

• Poore, J., & Nemecek, T. (2018). Reducing food’s environmental impacts through producers and consumers. Science Magazine, 360(6392), 987-992. DOI: 10.1126/science.aaq0216



• The World Bank. (2019). World Bank Open Data. Retrieved September, 2021, from https://data.worldbank.org/

• World Health Organization. (2007). Protein and amino acid requirements in human nutrition. WHO Technical Report Series 935.

http://apps.who.int/iris/bitstream/handle/10665/43411/WHO_TRS_935_eng.pdf;jsessionid=E2B5DC613079F8277916CCD36E446FE2?sequence=1

Desalination Could Be Key to Addressing the Global Water Crisis

Text:

• Little, A. (2021, April 12). Introducing the Global X Clean Water ETF (AQWA). Global X. https://www.globalxetfs.com/introducing-the-global-x-clean-water-etf-aqwa/

• National Geographic Encyclopedia. (2021). Ocean. In National Geographic Education Resource Library. Retrieved October, 2021, from https://www.nationalgeographic.org/encyclopedia/ocean/

Charts/Table:

• AQUASTAT. (2017). Global information system on water and agriculture. Food and Agriculture Organization of the United Nations. https://www.fao.org/aquastat/en/







Alternative Milk, Meat, and Dairy Adoption Set to Enter the Mainstream

Text:

• Global X. (2021, July). Global X ETFs Survey: American Attitudes Towards Alternative Foods. https://www.globalxetfs.com/content/files/Alternative-Food-Survey-INST-APPROVED-July-21.pdf

Charts:

• Beyond Meat. (2021, May 6). Investor presentation. [PowerPoint slides]. https://www.sec.gov/Archives/edgar/data/1655210/000165521021000076/ex9921q21investorpresent.htm

• Euromonitor International. (2021, October.) Dairy products and alternatives 2022. Euromonitor Passport. https://www.euromonitor.com/our-expertise/passport

• Food and Agriculture Organization of the United Nations. (2016, December). The global dairy sector: Facts. https://fil-idf.org/wp-content/uploads/2016/12/FAO-Global-Facts-1.pdf

• Haas, R., Schnepps, A., Pichler, A., & Meixner, O. (2019). Cow milk versus plant-based milk substitutes a comparison of product image and motivational structure of consumption. Sustainability, 11(18),

5046-5071. https://doi.org/10.3390/su11185046

• McHugh, T. (2018, December 1). How plant-based milks are processed. Food Technology Magazine. https://www.ift.org/news-and-publications/food-technology-

magazine/issues/2018/december/columns/processing-how-plant-based-milks-are-processed

• Renub Research. (2021, March). Plant based meat market global forecast by source, product, food, regions, company analysis. https://www.renub.com/plant-based-meat-market-p.php

• Research and Markets. (2018, October 26). Plant-based beverages market by source (almond, soy, coconut, & rice), type (milk & others), function (cardiovascular health, cancer prevention, lactose

intolerance, & bone health) and region - Global forecast to 2023. https://www.researchandmarkets.com/reports/4659992/plant-based-beverages-market-by-source-almond

• Research and Markets. (2020, February). Global plant based milk market (soy milk, almond milk, and rice milk): Insights, trends, and forecast (2020-2024).

https://www.researchandmarkets.com/reports/4992280/global-plant-based-milk-market-soy-milk-almond

• The Original Oatly. (2021, June). Oatly Investor Presentation. [PowerPoint slides]. https://investors.oatly.com/static-files/0bfad979-62b9-4d3d-84aa-6b112ee5c41b

• Wrick, K. (2003, January 1). The U.S. soy market: An update & outlook. Nutraceuticals World. https://www.nutraceuticalsworld.com/issues/2003-01/view_features/the-u-s-soy-market-an-update-amp-outlook/




Climate Change

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – C L I M A T E C H A N G E

Planet Earth’s climate is changing for the worse. Scientific observations indicate

that human-caused emissions are driving temperatures upward, negatively

impacting the environment in existential ways.

Yet, just as human activity has created the climate predicament, human

innovation could solve it. Decarbonization is one of the most pressing, globally

shared objectives of the 21st century. It can put us on a path that limits warming

and reduces its impacts.

Transitioning to clean energy sources and adopting clean technologies would

make this path a reality. In this chapter, we evaluate the state of our climate and

explore technology-driven solutions to saving it.



Planet Earth Is Warming Due to Human Activity, Negative Impacts Continue to Mount

Heightened concentrations of atmospheric CO2 are driving temperatures upward. This is unequivocally due to human emissions.1

CUMULATIVE CO2 EMISSIONS SINCE 1850 (GtCO2)

0

1,000

2,000

3,000

1850 1880 1910 1940 1970 2000 2020

-0.3

0

0.3

0.6

0.9

1.2

1850 1880 1910 1940 1970 2000 2020

ANNUAL TEMPERATURE RELATIVE TO PRE-INDUSTRIAL (1850-1900) AVG. (°C)

250

300

350

400

450

-10000 -8000 -6000 -4000 -2000 0 2000202004,000 BCE10,000 BCE

ATMOSPHERIC CO2 CONCENTRATION (parts per million, ppm)Atmospheric CO2 concentrations rose from 289ppm in the

pre-Industrial period to 410 ppm from 2010-2019. This

occurred 100x faster than ever recorded, including the end of

the ice age.1

+43%increase in atmospheric

CO2 concentration2

+1.24⁰Cincrease in temperature

(2020 vs. preindustrial)4

The past four decades were each hotter than all preceding

ones dating back to at least 1850. Only +/-0.1⁰C of this

warming could have come from natural drivers, such as

volcanic activity.1

Today’s atmospheric CO2 levels are almost solely due to

human emissions. Since 1990, fossil-fuel energy sources

produced 74% of annual emissions. The rest came from

agriculture.3

~100%of warming emissions

are human-produced1

The past decade was 1.1°C warmer than temperatures in pre-Industrial times. The

impacts are already here:

• Hot extremes are more frequent and intense since the 1950s and ocean heatwaves have

doubled since the 1980s.

• Heavy precipitation events and droughts are more frequent and intense since the 1950s.

• Retreating glaciers and melting sea ice are currently raising sea levels faster than in the

3,000 years prior.

Warming could reach an increase of 3°C by 2100 on our current path. Just 2°C would

have drastic impacts:

• Extreme heat events would occur 5.6x more often and be 2.6°C hotter.

• Extreme precipitation events would occur 1.7x more often and be 14% wetter.

• Extreme droughts would occur 2.4x more often and be 0.6 standard deviations drier.

Today’s warming is changing the planet. Tomorrow’s could bring catastrophe.1

Sources: Text: 1. Working Group I, 2021 2. Dlugokencky & Tans, 2021 3. Global X analysis based on data from Climate Watch, 2021 4. Global Carbon Project, 2021 Chart: Dlugokencky & Tans, 2021; Working Group I, 2021; Global Carbon

Project, 2021




Decarbonization Efforts Can Limit Warming, but to What Extent Is Up to Us

0.5

1.0

1.5

2.0

2.5

3.0

2000 2020 2040 2060 2080 2100

Historic NZE/1.5°C SDS APS STEPS

PROJECTED EMISSIONS BY DECARBONIZATION SCENARIO (Gt CO₂) CUMULATIVE INVESTMENT ACROSS CLEAN TECHNOLOGIES BY DECARBONIZATION SCENARIO (°C)

Limiting warming to 1.5°C above pre-Industrial levels can mitigate the worst impacts of climate change. Achieving this requires decarbonizing energy

systems by transitioning to clean energy sources and adopting enabling and other emissions-mitigating technologies.

Net Zero Emissions Scenario (NZE)

Achieves net zero energy sector emissions by 2050, limiting

warming to 1.5°C by 2050 (1.4 °C by 2100) without a temporary

overshoot.

0

10

20

30

40

2000 2010 2020 2030 2040 2050

PROJECTED WARMING BY DECARBONIZATION SCENARIO (°C)

Sustainable Development Scenario (SDS)

Meets the United Nations’ sustainable development goals,

reaching net zero by 2070 (latest). Would limit warming to 1.7°C by

2050 (1.6°C by 2100).

Announced Pledges Scenario (APS)

Countries meet most recent announced climate commitments on

schedule, which would limit warming to 1.8°C by 2050 (2.1°C by

2100).

Stated Policies Scenario (STEPS)

Based only on enacted policies and recognizing that announced

pledges might not be met. Would limit warming to 2.0°C by 2050

(2.1°C by 2100).

$0T

$20T

$40T

$60T

$80T

$100T

$120T

$140T

Historical STEPS APS SDS NZE/1.5°C

Bioenergy

Carbon Capture

Fossil Fuels + Nuclear

Energy Efficiency

Electrification + Batteries

Renewables

2016-2020 2021-2050

$10T

$94T

$107T

$119T

$131T

Sources: Text: 1. International Energy Agency, 2021 Charts: Global X analysis based on data from International Energy Agency, 2021

The success of

decarbonization

depends on policy,

investment, and

adoption.

The IEA presents

four scenarios for

decarbonization.1

N

Z

E

S

D

S

A

P

S

S

T

E

P

S




Geo-Politics & Climate TurmoilRamez Naam


The U.S. Defense Department and U.S. intelligence community have consistently found climate change to be

a “threat multiplier”.

Economic Reliance on Oil

• Saudi Arabia needs oil prices around $75 per barrel in order to pay for its national budget. While Saudi

Arabia is working to bring this breakeven point down, it is unlikely to ever fall below $50 per barrel.

• This puts Saudi Arabia’s domestic stability at risk if/when global demand for oil peaks and begins to decline,

which is likely near the end of this decade

• Russia depends on oil and gas for roughly 20% of its GDP, and it represents the majority of its foreign

exports.

Impending Climate Crisis

• The U.S. Department of Defense and U.S. intelligence community have consistently found climate change

to be a “threat multiplier”.

• Climate change adds to water stress, food stress, and population stress which all put pressure on the

least developed countries

• Climate change, along with other stresses, could increase the risk of: state failure, civil war, United States

or allied force deployment, as well as refugee and migration crises – in addition to creating breeding

grounds for terrorists.

• Sudan (Darfur) and Syria are examples of failed states with situations that are at least in part exacerbated

by resource stresses.



The Transition to Renewables Is Well Underway and Positioned to Accelerate

Global renewable electricity generation soared over the past decade, outpacing the growth of electricity generated by traditional sources

by 8x and meaningfully expanding renewables’ share of global electricity generation (“the power mix”) from 20% in 2011 to 29% in 2020.1

Wind1,590 TWh

(51x)

Solar844 TWh

(790x)

0

2,000

4,000

6,000

8,000

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Hydro Wind Solar Other (Geothermal, Bioenergy, etc.)

GLOBAL RENEWABLE ELECTRICITY GENERATION BY SOURCE (TWh)

201020%

202029%

203061%

205088%

15%

30%

45%

60%

75%

90%

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Historical Share (%)

RENEWABLES’ SHARE OF GLOBAL POWER MIX (%)

Renewable power generation accelerated on the back of investment and supportive policy that increased capacity and drove costs down

Scale Makes Renewable Power Affordable Power

Renewables’ levelized cost of electricity (LCOE), or revenue required

to build and operate a source over a cost recovery period, plunged

over the past decade, making renewable power cheaper than fossil

fuel power.

Investment & Policy Drive Scale, Innovation

Spurred by opportunity and supportive policy, private and

public sector investment poured into renewables over the

past decade, driving economies of scale and innovation for

key technologies.

2020 TWh

(vs. 2000)

$3,130BInvested in renewable energy sources from 2011 to 20202

$29B per yearAvg. government spending on energy R&D (2014-2020)2

$0.00

$0.10

$0.20

$0.30

$0.40

2010 2012 2014 2016 2018 2020

Solar PV Onshore Wind Offshore Wind

Fossil fuel LCOE ($0.06-$0.15)

illustrated by dotted lines

LEVELIZED COST OF ELECTRICITY ($2020/kWh)

Installed Renewable Capacity Skyrockets5

The installed capacity of renewables, primarily wind and

solar photovoltaic (PV), grew immensely over the past

decade as lower costs drove adoption and innovation

improved efficiency.

2010

Capacity

2020

Capacity

40 GW 707 GWSolar PV 18x

Wind 220 GW 733 GW3.3x

Must reach 88% by 2050 to

limit to warming to 1.5 °C

Sources: 1. BP, 2021 2. International Energy Agency, 2021a, 2021b, 2021c, 2020, 2019




Advancements in Wind Power and Solar PV Are Leading the Shift to Renewables

1. A wind turbine’s rotor blades capture

the wind’s energy, turning the rotor

2. Rotor turns driveshaft within turbine,

gearbox increases its speed of

rotation

3. Driveshaft turns generator, which

produces electricity that travels down

tower cable

4. Power flows through transformer,

stepping up voltage for grid

5. Power flows to grid for transmission

and use

1. Light hits PV cell glass, semi-

conducting material absorbs it,

creating flow of electrons

2. Solar panel produces DC power

from electron flow in its PV cells

3. DC power flows through inverter,

converting it to AC power

4. Power flows through transformer,

stepping up voltage for grid

5. Power flows to grid for

transmission and use

3

Inverter

2Solar

Panel

Transformer Grid

4 5

Glass Lens

PV Cell

1

Semiconducting

Materials

Advancements in wind and solar PV technology increased efficiency and affordability, accelerating the transition to renewables.

Rotor

Blade

Driveshaft

Generator

Wind Farm Transformer Grid

1

2

3

4

Gearbox

Rotor

5

Solar Photovoltaic (PV) Power Wind Power

How It

Works

How It

Advanced

$0

$1

$2

$3

$4

COST OF CRYSTALLINE SOLAR CELL ($2020/W)

$0.7

$0.9

$1.1

$1.3

$1.5

$1.7

$1.9

COST OF VESTAS WIND TURBINE ($2020/W)74% of a solar farm’s hardware

cost is from PV cells (64%) and

inverters (10%)1

Costs of both, especially PV cells,

dropped as efficiency improved

Solar PV’s total installed cost

plunged as a result

-81%Decrease in solar PV installed costs

(2010-2020)1

Cost of a Vestas wind turbine

decreased -38% from 2010-20201

Efficiency improved as rotor

diameters grew 50% and turbine

capacity grew 61%1

These factors drove installed costs

down to current levels

-31%Decrease in onshore wind installed costs

(2010-2020)1

Source: Text: 1. Taylor, et al., 2021 Charts: Taylor, et al., 2021




Improvements in Solar PV Efficiency Likely to Continue to Drive Costs Lower

Improved efficiency allows solar panels to convert more of the sun’s energy to electricity per square foot and enables new applications.

0%

5%

10%

15%

20%

25%

30%

35%

1985 1990 1995 2000 2005 2010 2015 2020

Crystalline Silicon CIGS Thin Film Peroviskite

1J Theoretical Limit

SINGLE JUNCTION PV CELL EFFICIENCY IMPROVEMENT OVER TIME (%)

Traditional solar PV cells use one semiconducting material, or in simple terms, are considered single

junction (1J). Efficiency gains have slowed as they approach the 32.3% theoretical limit for 1J.1

Crystalline Silicon (c-Si): First viable PV cells were c-Si, which is still the primary material used in

today’s cells. In 2020, c-Si cells represented 82% of the PV cell market across residential, utilities,

commercial.2

• Efficiency: 26.7% in 2021, up significantly from the 4.5% efficient cells of the 1950s.3

Copper Indium Gallium Selenide (CIGS): Thinner and more flexible than c-Si, it brought solar PV to

new settings.

• Efficiency: 23.4% in 2021, up significantly from the 9.4% record in 19813

Single junction cell efficiency gains helped make solar PV viable, but are approaching their limit

MJ cells use multiple semiconducting materials to absorb a broader spectrum of light. While they could

drive future efficiency gains, they can be up to 530x more expensive than c-Si cells.4

MJ Non-Concentrator (NC): MJ cells exposed to sunlight without lens/mirror concentration.

• Efficiency: 3J cell broke efficiency record at 39.5% and the theoretical limit is 68.7%.4, 1

MJ Concentrator (C): Lenses/mirrors concentrate sunlight on MJ cells to improve efficiency. MJ (C)

cells face additional headwinds as they must track the sun’s movement and control the heat of magnified

sunlight.

• Efficiency: 6J cell broke lab record in 2020 with 47% efficiency and the theoretical limit is 86.8%.5, 1

Multijunction (MJ) cells raise the ceiling for PV efficiency, at a cost

MULTIJUNCTION PV CELL EFFICIENCY IMPROVEMENT OVER TIME (%)

0%

20%

40%

60%

80%

2000 2005 2010 2015 2020

Multijunction (C) Multijunction (NC)

MJ Concentrator (C) Theoretical Limit

MJ Non-Concentrator (NC) Theoretical Limit

Perovskite Cells: First reported in 2009 and boast up to 25.5% efficiency as of 2021, improving

dramatically from just 14.1% in 2014. Not yet viable due to limited lifespan and toxicity.10, 7

Quantum Dot Cells: Contain semiconducting nanoparticles. The efficiency in 2021 of 18.1% is up from

2.9% in 2008.12

Applications: Perovskite and quantum dot technology could make solar PV paint and windows a reality.

Next-gen semiconducting materials could introduce new possibilities for solar PV

Sources: 1. Rühle, 2016 2. Feldman, et al., 2021 3. Green, 2009 4. Horowitz, et al., 2018 5. Crowell, 2020

6 University of New South Wales, 2016 7. National Renewable Energy Laboratory, n.d. Charts: See

Appendix for Climate Change




Electrification and Energy Storage Are Essential to Expanding Renewables’ Reach

Renewable energy can only reach as far as power infrastructure allows.

Widespread electrification would enable a full transition to renewables.

GENERATION PATTERNS FOR WIND & SOLAR ENERGY SOURCES

Renewable electricity production varies as environmental factors change.

Energy storage and smart grids are essential for ensuring consistent power.

DAILY GENERATION PATTERNS

12AM

EN

ER

GY

AV

AIL

AB

ILIT

Y PEAK DEMAND

SOLAR

WIND

ENERGY

STORAGE

DEMAND

12PM 12AM

PEAK DEMANDPEAK DEMAND

EN

ER

GY

AV

AIL

AB

ILIT

Y

WINDSOLAR

WINTER SPRING SUMMER

ENERGY

STORAGE

DEMAND

SEASONAL GENERATION PATTERNS

FALL

Industry40% of Energy Consumption

(22% Electric)

Buildings33% of Energy Consumption

(33% Electric)

Transportation27% of Energy Consumption(1% Electric)

SECTOR SHARE OF TOTAL ENERGY USE (%)

ELECTRICITY/CLEAN POWER SHARE OF SECTOR ENERGY USE (%)

Source: 1. International Energy Agency, 2021

• Electricity only represents 20% of total energy consumption.1 As this share is already

electrified, it can be decarbonized by transitioning to renewable energy sources.

• The direct use of emissions-producing fuels in transportation, buildings, and industry

represents 81% of energy use.1 Decarbonizing this share requires the electrification of end

uses like internal combustion engines and gas boilers and transitioning to clean energy.

20%

30%

40%

50%

2020 2030 2035 2040 2045 2050

ELECTRIC SHARE OF ENERGY CONSUMPTION IN NET ZERO SCENARIO (%)

• By 2050, 49% of energy use must be electric in the net zero emissions scenario1

• Some areas are impossible or unrealistic to electrify and must be decarbonized through

indirect electrification (green hydrogen, see next page) and by transitioning to bioenergy.

• Stationary Battery Storage: Large scale batteries would allow for the immediate and

efficient storage of electricity produced by the power sector. Further technological advances

are needed for these to be feasible.

• Green Hydrogen: Isolated hydrogen (H2) is a powerful energy carrier. Electrolyzers are

electricity-powered devices that isolate H2 from molecules like water and, when powered by

renewables, turn H2 into long term storage solution and emission-less energy source.

• Smart Grid: Ensures consistent power from variable and decentralized sources, like wind

and solar, via demand driven power transmission that allows consumers to transmit energy

back to the grid and by using storage to store power surpluses/address supply deficits.




Green Hydrogen Will Play a Central Role in Decarbonization

Successful decarbonization requires electrifying hard-to-electrify sectors and finding long-term storage solutions. Green hydrogen (H2) can do both. H2 is

the most abundant and lightest element on the periodic table, is 3x more energy-dense than gasoline, and provides energy without direct emissions.1,2

H2 is currently used as an input for many products/processes that fall outside

of its decarbonization use-case -- 95% of today’s hydrogen is grey hydrogen

(see table).3

• Oil Refining: Tempers sulfur content and other contaminants in crude oil

• Metal Production: Reducing agent in steel with lower CO2 emissions

• Fertilizer: Used to make ammonia which is mostly used to produce fertilizer

• Fuel: Blended hydrogen fuel can provide auxiliary power to aircraft or cargo ships

Current uses of H2 are not ‘green’ and only scratch the surface of its potential Color Process Source(s)Carbon

Intensity

Grey

Hydrogen

• Steam Methane Reforming (SMR)

• Gasification

• Methane

• CoalHigh

Blue

Hydrogen

• SMR with Carbon Capture

• Gasification with Carbon Capture

• Methane

• CoalLow

Green

Hydrogen• Electrolysis (with an electrolyzer)

• Renewable

PowerZero

Green H2 is a powerful solution for electrification and renewable energy storage

• Fuel Cell: Uses H2 to produce electricity via reverse electrolysis without releasing

emissions

‒Stationary: Replaces natural gas as a source of heat/power in buildings and industry

‒FCEV: Vehicles powered by H2 fuel cells - FCEV market could reach $10.2B by 20264

• Gas & Fuel: Can replace grey H2 as an input to producing fuel and can be added to

fuel or gas to reduce emissions while using existing infrastructure and traditional

boilers/engines

• Industrial Input: Can replace grey H2 for steelmaking and chemical production

Green H2 is produced using renewable electricity-powered electrolyzers. Very little of today’s H2 is green, but as electrolyzer costs decline and renewable

energy scales, green H2 will become a powerful decarbonization tool.

$5.19/kg

$3.04/kg

$1.85/kg $1.58/kg

$0

$2

$4

$6

2020* 2030* 2040* 2050*

At $2/kg, Green H2

becomes cost-competitive

with Grey H2

PROJECTED GREEN H2 COST DECREASE ($/kg)

• Green H2 production must become cheaper than grey H2 production for it to be viable.

• Cost parity could come sooner than projected. The Hydrogen Council’s outlook for

2030 electrolyzer costs was recently lowered by 30-50%.5

Sources: Text: 1. College of the Desert, 2001 2. Connecticut Hydrogen-Fuel Cell Coalition, 2016 3. International Renewable

Energy Agency, 2020 4. Mordor Intelligence, 2021 5. Hydrogen Council & McKinsey & Company, 2021 Chart: PwC, 2021


*Forecast

Note: EUR/kg at conversion rate of 1 EUR to 1.19 USD, Base year = 2020.



Carbon Capture Technologies Can Slow or Even Reverse Climate Change

Carbon capture technologies mitigate the emissions of traditional energy sources and remove existing emissions from the atmosphere, serving as

a bridge for a full transition to renewables and a way to reduce atmospheric CO2 concentrations and related warming in the future.

Ground Sequestration

95% of captured CO2 is stored permanently under

the earth, usually half a mile deep where dense rock

formations prevent it from escaping.4

Bioenergy

Captured CO2 can also be used to grow biomass,

which consumes CO2 through photosynthesis and

offers an additional alternative to fossil fuels.

Input for Industrial Processes & Fuel

CO2 is an essential input for synthetic fuels, plastics,

cement, and more. Captured CO2 can fill these

needs.

Carbon After Capture: Where Does It Go?

3.3 Gt58%

3.8 Gt50%

1.7 Gt31%

2.8 Gt37%

0.6 Gt11%

1.0 …

0

2

4

6

8

2020 2030 2040 2050

Energy Industry Atmosphere

CO2 CAPTURED ANNUALLY IN NZE SCENARIO (2020-2050), BY SOURCE (Gt CO2, %)

5,246 Mt69%

1,374 Mt18%

983 Mt13%

CCUS

BECCS

DAC

CO2 CAPTURED IN 2050 IN NZE, BY TECHNOLOGY

(Mt CO2, %)

Technology Description Applications & Progress

Carbon

Capture,

Utilization,

& Storage

(CCUS)

Captures CO2 at emissions source then

transports it (usually via pipelines and

storage tanks) to be stored, via ground

sequestration, or used, such as to grow

biomass or in industry.

• There were 21 large-scale CCUS facilities in operation in 2020 (vs. 8 in 2010),

capturing 40 Mt of CO2 in total. This must reach 5,246 Mt (131x current levels)

by 2050 in NZE.1

• In 2020, there were 2.2x large scale CCUS facilities in development vs. 2017.2

Bioenergy with

Carbon

Capture

& Storage

(BECCS)

Removes CO2 from atmosphere by

producing plant biomass which consumes

CO2 as it grows. Biomass is used for energy

with emissions captured through CCUS.

• Biomass produces bioenergy by direct combustion or through derivatives

(biofuels/biogas) to use in supplying buildings, industry, and transportation.

• Bioenergy made up 10% of energy consumption in 2020. This must reach 14%

by 2050 in NZE, where 18% of captured CO2 comes from bioenergy.3

Direct Air

Capture

(DAC)

Removes CO2 directly from the atmosphere

by passing air through filters or chemicals

that capture CO2 and allow for storage via

sequestration or use.

• 19 DAC plants currently operating, capturing 0.1Mt CO2 a year in total.2

• A 1Mt plant is on track to operate in the United States by the mid 2020s. The

NZE scenario would need 983 of these by 2050.4

Aggressive emissions scenarios, like IEA’s Net Zero Emissions (NZE) scenario, rely on carbon capture to accelerate decarbonization.

$154B per yearInvested in carbon capture from 2021-

2050 in IEA’s NZE scenario, on average5

Sources: Text: 1.Budinis, 2021 2. Global X analysis of data derived from International Energy Agency, 2021a 3. International Energy Agency, 2020 4. Global X

analysis of data derived from text sources 2 and 3 5. International Energy Agency, 2021b Chart: International Energy Agency, 2021; Global X analysis of data

derived from International Energy Agency, 2021a;




The Geo-Engineering World

There is virtually no scenario where global temperatures rise by less than 1.5°C by deploying clean

energy alone - other options may be needed.

Ramez Naam

• While the world has made enormous progress on clean energy, we are not yet on track to

keep warming below 2°C, let alone the safer level of 1.5°C.

• Current forecasts lead to warming of roughly 2.5 – 3°C, far better than the 4-6°C of warming

expected a decade ago, but still insufficient to avoid extreme and destabilizing consequences.

• Carbon removal from air is frequently discussed but comes at an enormous price tag of

trillions per year.

• Solar geo-engineering, sometimes called solar radiation management (SRM), could potentially

reduce temperatures on earth at a cost of only a few billion per year by spraying light-reflective

aerosols high in the stratosphere.

• SRM, however, is extremely controversial. Controversy has effectively even prevented

research into SRM and its effects from taking place. Global research budgets for SRM are

<$10 million / year, a pittance compared to both climate impacts and clean energy spending.

• While the world may choose never to deploy SRM, risk management indicates that we should

move forward with researching SRM, to have an additional tool in our climate-fighting toolkit.




Appendix: Sources – Climate Change

Planet Earth is Warming Due to Human Activity, Negative Impacts Continue to Mount

Text:

• Climate Watch. (2021). Historical GHG emissions. https://www.climatewatchdata.org/ghg-emissions?end_year=2018&start_year=1990

• Dlugokencky, E., & Tans, P. (2021). Trends in atmospheric carbon dioxide. NOAA Global Monitoring Laboratory Earth System Research Laboratories. https://gml.noaa.gov/ccgg/trends/global.html

• Global Carbon Project. (2021, November 4). Global carbon budget: Summary highlights. https://www.globalcarbonproject.org/carbonbudget/21/highlights.htm

• Working Group I. (2021, August 6). Climate change 2021: The physical science bias. IPCC. https://www.ipcc.ch/report/ar6/wg1/

Chart:

• Dlugokencky, E., & Tans, P. (2021). Trends in atmospheric carbon dioxide. NOAA Global Monitoring Laboratory Earth System Research Laboratories. https://gml.noaa.gov/ccgg/trends/global.html

• Global Carbon Project. (2021, November 4). Global carbon budget: Summary highlights. https://www.globalcarbonproject.org/carbonbudget/21/highlights.htm

• Working Group I. (2021, August 6). Climate change 2021: The physical science bias. IPCC. https://www.ipcc.ch/report/ar6/wg1/

Decarbonization Can Limit Warming, but to What Extent Is Up to Us

Text:

• International Energy Agency. (2021, October). World energy outlook 2021. https://iea.blob.core.windows.net/assets/888004cf-1a38-4716-9e0c-3b0e3fdbf609/WorldEnergyOutlook2021.pdf

Chart:


The Transition to Renewables Is Well Underway and Positioned to Accelerate

Text:

• BP. (2021, July). Statistical review of world energy (70th ed.). https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-full-

report.pdf

• International Energy Agency (2019, May). World energy investment 2019. https://www.iea.org/reports/world-energy-investment-2019

• International Energy Agency. (2020, May). World energy investment 2020. https://www.iea.org/reports/world-energy-investment-2020

• International Energy Agency. (2021a, April). Global energy review: Part of global energy review. 2021. https://www.iea.org/reports/global-energy-review-2021

• International Energy Agency. (2021b, June). World energy investment 2021. https://www.iea.org/reports/world-energy-investment-2021

• International Energy Agency. (2021c, October). World energy outlook 2021. https://iea.blob.core.windows.net/assets/888004cf-1a38-4716-9e0c-3b0e3fdbf609/WorldEnergyOutlook2021.pdf

Charts:

• BP. (2021, July). Statistical review of world energy (70th ed.). https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2021-full-

report.pdf

• International Energy Agency. (2021, April). Global energy review: Part of global energy review. 2021. https://www.iea.org/reports/global-energy-review-2021

• Taylor, M., Ralon, P., Al-Zoghoul, Epp, B., & Jochum, M. (2021, June). Renewable power generation costs in 2020. International Renewable Energy Agency. Abu Dhabi.





Advancements in Wind Power and Solar PV Are Leading the Shift to Renewables

Text:


Charts:


Improvements in Solar PV Efficiency Likely to Continue to Drive Costs Lower

Text:

• Crowell, C. (2020, April 14). NREL researchers hit new multijunction solar cell efficiency record of 47 percent. Solar Builder. https://solarbuildermag.com/news/nrel-researchers-hit-new-multijunction-solar-cell-

efficiency-record-of-47-percent/

• Feldman, D., Wu, K., & Margolis, R. (2021, June 22). H1 2021 solar industry update. NREL/PR-7A40-80427. National Renewable Energy Laboratory. https://www.nrel.gov/docs/fy21osti/80427.pdf

• Green, M. A. (2009). The path to 25% silicon solar cell efficiency: History of silicon cell evolution. Progress in Photovoltaics, 17(3), 183-189. https://doi.org/10.1002/pip.892

• Horowitz, K. A. W., Remo, T., Smith, B., & Park, A. (2018, November). A techno-economic analysis and cost reduction roadmap for III-V solar cells. NREL/TP-6A20-72103. National Renewable Energy

Laboratory. https://www.nrel.gov/docs/fy19osti/72103.pdf

• National Renewable Energy Laboratory. (n.d.) Best research-cell efficiency chart. https://www.nrel.gov/pv/cell-efficiency.html

• Rühle, S. (2016). Tabulated values of the Shockley–Queisser limit for single junction solar cells. Solar Energy, 130, 139-147. https://doi.org/10.1016/j.solener.2016.02.015

• University of New South Wales. (2016, December 2). Perovskite solar cells hit new world efficiency record. ScienceDaily. https://www.sciencedaily.com/releases/2016/12/161201114543.htm

Chart:

• Devaney, W. E., Chen, W. S., Stewart, J. M., & Mickelsen, R. A. (1990, February). Structure and properties of high efficiency ZnO/CdZnS/CuInGaSe/sub 2/ solar cells. IEEE Transactions on Electron

Devices, 37(2), 428-433. doi: 10.1109/16.46378.

• Green, M. A. (2009). The path to 25% silicon solar cell efficiency: History of silicon cell evolution. Progress in Photovoltaics: Research and Applications, 17(3), 183-189. https://doi.org/10.1002/pip.892

• Green, M. A., Dunlop, E. D., Hohl-Ebinger, J., Yoshita, M., Kopidakis, N., & Ho-Baillie, A. W. H. (2019). Solar cell efficiency tables (Version 55). Progress in Photovoltaics: Research and Applications, 28(1),

3-15. https://doi.org/10.1002/pip.3228

• Green, M. A., Dunlop, E. D., Hohl-Ebinger, J., Yoshita, M., Kopidakis, N., & Hao, X. (2020). Solar cell efficiency tables (Version 57). Progress in Photovoltaics: Research and Applications, 29(1), 3-15.

https://doi.org/10.1002/pip.3371

• Green, M. A., Dunlop, E. D., Hohl-Ebinger, J., Yoshita, M., Kopidakis, N., & Hao, X. (2021). Solar cell efficiency tables (Version 58). Progress in Photovoltaics: Research and Applications, 29(7), 657-667.


• Green, M. A., Emery, K., King, D. L., Igari, S., & Warta, W. (2000). Solar cell efficiency tables (Version 16). Progress in Photovoltaics: Research and Applications, 8(4), 377-383. https://doi.org/10.1002/1099-

159X(200007/08)8:4<377::AID-PIP339>3.0.CO;2-H

• Green, M. A., Emery, K., King, D. L., Igari, S., & Warta, W. (2001). Solar cell efficiency tables (Version 18). Progress in Photovoltaics: Research and Applications, 9(4), 287-293.


• Green, M. A., Emery, K., King, D. L., Igari, S., & Warta, W. (2004). Solar cell efficiency tables (Version 24). Progress in Photovoltaics: Research and Applications, 12(5), 365-372.


• Green, M. A., Emery, K., King, D. L., Hishikawa, Y., & Warta, W. (2006). Solar cell efficiency tables (Version 27). Progress in Photovoltaics: Research and Applications, 14(1), 45-51.







Improvements in Solar PV Efficiency Likely to Continue to Drive Costs Lower (continued)

Chart: (continued)

• Green, M. A., Emery, K., Hishikawa, Y., & Warta, W. (2009). Solar cell efficiency tables (Version 34). Progress in Photovoltaics: Research and Applications, 17, 320-326.

https://onlinelibrary.wiley.com/doi/pdf/10.1002/pip.911

• Green, M. A., Emery, K., Hishikawa, Y., & Warta, W. (2010). Solar cell efficiency tables (Version 37). Progress in Photovoltaics: Research and Applications, 19(1), 84-92. https://doi.org/10.1002/pip.1088

• Green, M. A., Emery, K., Hishikawa, Y., Warta, W., & Dunlop, E. D. (2012). Solar cell efficiency tables (Version 40). Progress in Photovoltaics: Research and Applications, 20(5), 606-614.


• Green, M. A., Emery, K., Hishikawa, Y., Warta, W., & Dunlop, E. D. (2013). Solar cell efficiency tables (Version 43). Progress in Photovoltaics: Research and Applications, 22(1), 1-9.


• Green, M. A., Emery, K., Hishikawa, Y., Warta, W., & Dunlop, E. D. (2014a). Solar cell efficiency tables (Version 44). Progress in Photovoltaics: Research and Applications, 22(7), 701-710.


• Green, M. A., Emery, K., Hishikawa, Y., Warta, W., & Dunlop, E. D. (2014b). Solar cell efficiency tables (Version 45). Progress in Photovoltaics: Research and Applications, 23(1), 1-9.


• Green, M. A., Emery, K., Hishikawa, Y., Warta, W., & Dunlop, E. D. (2015). Solar cell efficiency tables (Version 46). Progress in Photovoltaics: Research and Applications, 23, 805-812.

https://onlinelibrary.wiley.com/doi/pdf/10.1002/pip.2637

• Green, M. A., Hishikawa, Y., Warta, W., Dunlop, E. D., Levi, D. H., Hohl-Ebinger, J., & Ho-Baillie, A. W. H. (2017). Solar cell efficiency tables (Version 50). Progress in Photovoltaics: Research and

Applications, 25(7), 668-676. https://doi.org/10.1002/pip.2909

• Ma, C., & Park, N.-G. (2020, June 11). A realistic methodology for 30% efficient perovskite solar cells. Chem, 6(6), 1254-1264. https://doi.org/10.1016/j.chempr.2020.04.013

• Mickelsen, R., & Chen, W. (1981). Development of a 9.4% efficient thin-film CuInSe2/CdS solar cell [Conference presentation]. Photovoltaic Specialists Conference, 15th, Kissimmee FL, United States.

1981pvsp.conf..800M

• National Renewable Energy Library. (1995, March 1). Photovoltaic energy program overview: Fiscal year 1994. Produced for the U.S. Department of Energy.

https://digital.library.unt.edu/ark:/67531/metadc679333/m1/

• National Renewable Energy Laboratory. (n.d.) Best research-cell efficiency chart. https://www.nrel.gov/pv/cell-efficiency.html

• Rühle, S. (2016). Tabulated values of the Shockley–Queisser limit for single junction solar cells. Solar Energy, 130, 139-147. https://doi.org/10.1016/j.solener.2016.02.015

• Schock, H., & Noufi, R. (2000). CIGS-based solar cells for the next millennium. Progress in Photovoltaics: Research And Applications, 8(1), 151-160. https://doi.org/10.1002/(SICI)1099-

159X(200001/02)8:1<151::AID-PIP302>3.0.CO;2-Q

• Semiconductor Today. (2010, August 23). ZSW raises its thin-film solar cell efficiency record to 20.3%. http://www.semiconductor-today.com/news_items/2010/AUG/ZSW_230810.htm

• Stanberry, B. J., Chen, W. S., Devaney, W. E., & Stewart, J.M. (1992, November). Research on polycrystalline thin-film CuGalnSe2 solar cells: Annual subcontract report 3 May 1991 - 2 May 1992. National

Renewable Energy Laboratory. https://www.nrel.gov/docs/legosti/old/5012.pdf

• Surek, T. (1993, October). The state of the art of thin-film photovoltaics [Conference presentation]. Symposium on Balancing Energy, the Economy, and Ecology: The Solar Energy Contribution, Newark DE,

United States. 1993STIN...9426115S

• Zweibel, K. (1998, October). Thin film photovoltaics [Conference presentation]. Technology’s Critical Role in Energy and Environmental Markets, Albuquerque NM, United States.

https://www.nrel.gov/docs/fy99osti/25262.pdf





Electrification and Energy Storage Are Essential to Expanding Renewables’ Reach


Green Hydrogen Will Play a Central Role in Decarbonization

Text:

• College of the Desert. (2001, December). Hydrogen properties. U.S. Department of Energy. https://www1.eere.energy.gov/hydrogenandfuelcells/tech_validation/pdfs/fcm01r0.pdf

• Connecticut Hydrogen-Fuel Cell Coalition. (2016). Hydrogen properties. http://chfcc.org/hydrogen-fuel-cells/about-hydrogen/hydrogen-properties/

• Hydrogen Council, & McKinsey & Company. (2021, February). Hydrogen insights: A perspective on hydrogen investment, market development and cost competitiveness. Hydrogen Council.

https://hydrogencouncil.com/wp-content/uploads/2021/02/Hydrogen-Insights-2021.pdf

• International Renewable Energy Agency. (2020). Green hydrogen: A guide to policy making. Abu Dhabi. https://irena.org/-

/media/Files/IRENA/Agency/Publication/2020/Nov/IRENA_Green_hydrogen_policy_2020.pdf

• Mordor Intelligence. (2021, March). Fuel cell commercial vehicle market - Growth, trends, COVID-19 impact, and forecasts (2021 - 2026). Retrieved from Mordor Intelligence database.

Chart:

• PwC. (2021, March). The green hydrogen economy: Predicting the decarbonization agenda of tomorrow. https://www.pwc.com/gx/en/industries/energy-utilities-resources/future-energy/green-hydrogen-

cost.html

Carbon Capture Technologies Can Slow or Even Reverse Climate Change

Text:

• Budinis, S. (2021, November). Direct air capture. IEA. Retrieved from IEA database.

• International Energy Agency. (2020). CCUS in clean energy transitions, IEA, Paris. https://www.iea.org/reports/ccus-in-clean-energy-transitions

• International Energy Agency. (2021a, May). Net zero by 2050: A roadmap for the global energy sector. https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-

ARoadmapfortheGlobalEnergySector_CORR.pdf

• International Energy Agency. (2021b, October). World energy outlook 2021. https://iea.blob.core.windows.net/assets/888004cf-1a38-4716-9e0c-3b0e3fdbf609/WorldEnergyOutlook2021.pdf

Chart:

• International Energy Agency. (2021, May). Net zero by 2050: A roadmap for the global energy sector. https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-

ARoadmapfortheGlobalEnergySector_CORR.pdf




Mobility

Electric vehicle (EV) sales are reaching an inflection point as consumers, auto

manufacturers, and governments accelerate the shift away from internal

combustion engines (ICEs) and towards battery-powered vehicles.

With falling costs and improving range and charging infrastructure, consumers

will soon have few reasons not to buy EVs. An expected shift to cheaper, more

robust lithium-iron phosphate (LFP) batteries are expected to help EVs reach

the mass market, while billions of dollars invested in charging infrastructure will

help reduce range anxiety.

However, auto manufacturers and governments must pay attention to supply

chain risks, as delayed investment in lithium mining and processing could pose

risks to widespread EV adoption.

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N - M O B I L I T Y



The Unstoppable Road to Electrification


Electric vehicle (EV) sales are reaching an inflection point as consumers, auto manufacturers, and governments accelerate the

shift away from internal combustion engines (ICEs) and towards battery-powered vehicles.

INNOVATION

OEM COMMITMENTS

REGULATORY ENVIRONMENT

CONSUMER ADOPTION

CHINA4

EUROPE5

U.S. 6

• Free EV license plates

and registrations

• Up to ~$2,000 in

subsidies

Country-specific subsidies:

• Germany up to €9,000

• France up to €7,000

• UK up to €3,000

• Federal tax credit for

qualifying vehicles up to

$7,500

• 2020: Consumers spent $120 billion on electric vehicle purchases in 2020, a 50%

increase from 2019. 2

• 2021: As of October, sales have more than doubled in the Chinese, American, and

German EV markets since 2020.3

• Over the last decade, lithium-ion battery prices fell 17% per year, bringing EV prices

close to ICE vehicles.1 While such a rapid price decline is unlikely to continue at the

same rate, further cost reductions are expected to help attract more cost sensitive

buyers.

• With EV sales growth outpacing ICEs, traditional auto OEMs are increasingly

committing to electrifying their fleets. GM, Stellantis, Ford, and others have committed

billions of dollars to an all-electric future.

• Government policies in major auto markets like the United States, China, and Europe

are further accelerating adoption of EVs through subsidies and other policies.

$100kWh:

parity point

with ICEs

* Estimates based on Global X analysis using average EV Sales estimates from

IEA’s Stated Policies Scenario and Sustainable Development Goals.

Sources: Text: 1. Frith, 2021 2. International Energy Agency, 2021 3. Rho Motion, 2021 4. Shi, 2021 5. The Wallbox Team, 2021a, 2021b, 2021c 6. Internal Revenue Service, 2021 Chart: Frith, 2021

0

50

100

150

200

250

300

350

400

2015 2016 2017 2018 2019 2020 2021* 2022* 2023* 2024* 2025*

Ba

tte

ry P

ack P

rice

$/k

Wh Lithium-Ion Battery Costs Are Falling

EVs to become

cheaper than ICE

vehicles by 2024



Exploring the Electric Mobility Landscape

While electric vehicles are poised to trigger the transportation industry’s largest shakeup in over a century, lithium mining and

lithium-ion battery production are critical, but often overlooked, stages of the EV value chain.

UPSTREAM MIDSTREAM DOWNSTREAM

Raw Material Extraction

Main sources of raw lithium are underground deposits of

brine and spodumene, a hard rock mineral.

LEADING COUNTRY1: Australia | ~45% market share of

Lithium production

Chemical Processing

To prepare lithium for battery use, careful chemical

processing must take place to produce lithium carbonate

or lithium hydroxide with as few contaminates as

possible.

LEADING COUNTRY1: China | 59% market share

Cathode and Anode Production

Lithium carbonate or hydroxide is inserted into the

cathode of a battery, determining the capacity and

voltage of it.

LEADING COUNTRY1: China | 61%

market share

Lithium-Ion Cell Manufacturing

Cell assembly as well as electrolyte filling and

formation for the final lithium-ion battery product.

LEADING COUNTRY1: China | 77% market share

Other Battery-Powered Electric Mobility

From bicycles, motorcycles, hoverboards, scooters,

and other forms of personal transportation, battery

powered vehicles are taking many forms.

Electric Vehicles

Rechargeable lithium-ion batteries power electric

vehicles (EVs).

LEADING COUNTRY2: China | ~54% market share

1

2

3

4

5

6

Sources: 1. Benchmark Mineral Intelligence, 2021 2. Rho Motion, 2021




While high-end lithium-ion batteries depend heavily on nickel for the longest possible ranges of luxury EVs, an older, more

robust, and less expensive chemistry based on lithium-iron (LFP) appears likely to fuel mass market adoption.

Sources: 1. Rho Motion, 2021. 2. Karimov, 2021 3. Xu, et al., 2020

Note: Nickel Cobalt Aluminum (NCA), Nickel Manganese Cobalt (NMC), Lithium Iron Phosphate (LFP).

EV costs could fall 24% by 2030, with ~4% of the total cost decline coming

from switching to LFP batteries

23% to 33% cheaper 2Safer due to thermal

stability

Can be charged 100%

vs. ~90% recommended

for nickel-based3

Average lifespan of 20

years vs. 15 years for

nickel-based3

Lower energy density,

resulting in lower EV

range

Slower EV speed0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2018 2019 2020 2021

Ma

rke

t S

ha

re

LFP batteries have been losing market share as EVs aim for high-end

consumers. This trend is likely to reverse as EVs penetrate the mass market

NICKEL-BASED LITHIUM-ION (NMCs + NCA)

IRON-BASED LITHIUM ION (LFP)

2025* 2030*

Lithium-Ion Battery Cell by Market Share1

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20

40

60

80

100

2020 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*

Ba

tte

ry C

os

t a

s %

of

To

tal

Veh

icle

Co

st

EV

Co

st

Ind

ex

EV Cost Index (LHS) Battery Cost as % of Total Vehicle Cost (RHS)

LFP Advantages LFP Disadvantages


Battery Tech: Lithium-Iron to Drive Mass Market Adoption

* Global X Estimates.



EV range is a concern today due to suboptimal charging infrastructure in the U.S. This will change with the Congress approval

of the Infrastructure Investment & Jobs Act (IIJA) with $7.5 billion dedicated to build EV charging stations.

Today, a Tesla Model 3 Standard Range Plus with LFP battery technology doesn’t have enough energy density in ~27 states. However, with the passage of IIJA

only 3 states would fall short.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Sep-21 Post Infrastructure BillImplementation*

Number of EV Charging Stations in the U.S.

Sources: U.S. Department of Energy, 2021; Carney, 2021; Musk, 2021

Note: Based on a 25% and 75% allocation of the proposed $7.5 billion to EV Level 2 and EV Fast Charging Stations, respectively. Assumes distribution of funds according to existing charging footprint. * Estimates

Average Number of Road Miles per EV Station (By State)

7x


EV Charging Infrastructure Could See a Major Boost From Infrastructure Bill



With EV sales growth outpacing ICEs, traditional auto OEMs are increasingly committing to electrifying their fleets by offering

a wider range of EV models, committing billions of dollars of investment capital to retool factories, and targeting high

percentages of EV sales relative to ICEs.

The Traditional Auto OEM EV Commitment and Readiness Index assesses the level of commitment and readiness to electric vehicles across the ten largest traditional auto

manufacturers. The Index is an equally weighted average composite of four factors: current EV sales as percentage of total sales; capital committed to vehicle electrification

and battery technology; EV sales targets both as percentage of total sales and in absolute terms; and the number of EV models in the pipeline.

Auto OEM Score Rank

BMW 61 1

Daimler (Mercedes-Benz) 59 2

Volkswagen Group 50 3

Hyundai 48 4

Toyota 44 5

Renault 43 6

Stellantis (Fiat, Chrysler, Peugeot, and others) 41 7

FAW Group 32 T-8

GM 32 T-8

Ford 28 10

Note: Index score from 0 to 100. Not all OEMs report all five factors. Weighted average is

calculated based on the number of factors per company.

BMW

Daimler (Mercedes-Benz)

Volkswagen Group

Hyundai

Toyota

Renault

Stellantis

FAW Group

GM

Ford

TOP 10

50% Target25 Models9.5% Sales

$47 Billion50% Target6.3% Sales

$86 Billion 50% Target70 Models4.5% Sales

$87 Billion 44 Models4.8% Sales

$14 Billion40% Target 70 Models0.5% Sales

$36 Billion 40% Target55 Models2.4% Sales

30 Models$27 Billion2.2% Sales

$30 Billion 40% Target40 Models0% Sales

6.7% Sales 16 Models$12 Billion 45% Target

0% Sales 40% Target

2020 2025 2030


Quantifying EV Ambitions: Traditional Auto OEM EV Commitment and Readiness Index



Despite advancing battery technologies and improving charging infrastructure, an undersupply of lithium could slow EV adoption.

Sources: Bandy, et al., 2021; Benchmark Mineral Intelligence, 2021

-1,400,000

-1,300,000

-1,200,000

-1,100,000

-1,000,000

-900,000

-800,000

-700,000

-600,000

-500,000

-400,000

-300,000

-200,000

-100,000

0

100,000

2020 2021* 2022* 2023* 2024* 2025* 2026* 2027* 2028* 2029* 2030*

Metr

ic T

on

s p

er

an

nu

m o

f L

itih

ium

C

arb

on

ate

Eq

uiv

ale

nt

(LC

E)

Lithium Surplus / Deficit

But underinvestment in lithium mining could pose risks to OEMs’ ambitious EV goals. We expect a

lithium deficit in 2022, with conditions worsening over the next several years.

EVs are expected to drive the vast majority of lithium’s

incremental demand growth

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2020 2025* 2030*

Metr

ic T

on

s p

er

an

nu

m o

f L

itih

ium

Carb

on

ate

E

qu

ivale

nt

(LC

E)

Lithium Demand by Application

Lithium Demand for Other Applications

Lithium Demand Battery Grade for EVs

New lithium mining operations

can take 3-5 years to

complete, making 2025’s

forecasted undersupply an

issue that needs immediate

attention

Lithium Supply / Demand Imbalance Poses Risks to Electric Vehicle Adoption


* Estimates



Range, cost, and charging concerns are the most common reasons

cited for consumers not considering purchasing an EV.

Q: WHICH, IF ANY, OF THE FOLLOWING ARE REASONS THAT YOU WOULD NOT CONSIDER

PURCHASING AN ELECTRIC VEHICLE FOR YOUR NEXT VEHICLE PURCHASE?

(% OF RESPONDENTS)

Note: N = 571

62% 61%

51%

29%24%

16%

4% 3%

0%

20%

40%

60%

80%

100%

More Americans would prefer an electric drive train to an internal

combustion engine, assuming car model and price were the same –

though uncertainty is high.

Note: N = 571

Q: ASSUMING YOUR FAVORITE CAR MODEL FOR YOUR NEXT VEHICLE PURCHASE CAME IN BOTH

ELECTRIC AND INTERNAL COMBUSTION DRIVE TRAINS, AND THEY COST THE SAME AMOUNT, WHICH

WOULD YOU PURCHASE?

(% OF RESPONDENTS)

39%37%

25%

0%

10%

20%

30%

40%

50%

Unsure Electric Drive Train Internal Combustion Drive Train

Consumer Pulse: What Are the Barriers to EV Adoption?


Source: Global X, 2021



Electrified Mobility to Grow >10x Over the Next Decade


By 2030, EVs could achieve a 36% penetration rate, representing a $1.4 trillion

opportunity.1,2

$3.8T

$1.4T

$120B

Key Drivers of Adoption

• OEMs Commitments: Major traditional

automobile manufacturers, such as GM

and Ford, are investing billions to electrify

their model ranges over the next 10 to 15

years.

• Regulatory Environment: Government

policies in major auto markets – such as

the United States, China, and Europe –

are further accelerating adoption of EVs

through subsidies.

• Increasing Battery Tech Demand: To

meet growing EV demand, battery

production must expand substantially,

causing a global arms-race among major

governments, battery producers, and

automobile manufacturers.

• Incentives to Invest in Lithium Mining:

While lithium markets were previously

oversupplied, lagging investment in

additional production capacity could result

in shortages of the key raw material for

batteries as EV demand surges.

Sources: 1. International Energy Agency, 2021 2. Baltic, et al., 2019

Note: Based on IEA’s Sustainable Development Goals aligned with the Paris Agreement.




Appendix: Sources – Mobility

The Unstoppable Road to Electrification

Text:

• Frith, J. (2021, September 14). EV battery prices risk reversing downward trend as metals surge. Bloomberg. https://www.bloomberg.com/news/newsletters/2021-09-14/ev-battery-prices-risk-reversing-

downward-trend-as-metals-surge

• Internal Revenue Service. (2021, June 27). Plug-in electric drive vehicle credit (IRC 30D). https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

• International Energy Agency. (2021). Global EV outlook 2021: Accelerating ambitions despite the pandemic. https://www.iea.org/reports/global-ev-outlook-2021/trends-and-developments-in-electric-vehicle-

markets

• Rho Motion. (2021, October). October 2021 major market EV sales. https://rhomotion.com/

• Shi, C. (2021, January 5). China cuts EV subsidy for 2021; market downplays impact on lithium, cobalt prices. Fastmarkets. https://www.fastmarkets.com/article/3969254/china-cuts-ev-subsidy-for-2021-

market-downplays-impact-on-lithium-cobalt-prices

• The Wallbox Team. (2021a). EV and EV charging incentives in the UK. Wallbox. https://blog.wallbox.com/ev-and-ev-charging-incentives-in-the-uk-a-complete-guide/

• The Wallbox Team. (2021b). How to get an EV subsidy in France. Wallbox. https://blog.wallbox.com/france-ev-incentives/

• The Wallbox Team. (2021c). The ultimate guide to EV incentives in Germany. Wallbox. https://blog.wallbox.com/ev-incentives-germany/

Chart:

• Frith, J. (2021, September 14). EV battery prices risk reversing downward trend as metals surge. Bloomberg. https://www.bloomberg.com/news/newsletters/2021-09-14/ev-battery-prices-risk-reversing-

downward-trend-as-metals-surge

Exploring the Electric Mobility Landscape

• Benchmark Mineral Intelligence. (2021, April 7). Global battery arms race: Benchmark private investor webinar. [PowerPoint slides]


Battery Tech: Lithium Iron to Drive Mass Market Adoption

• Karimov, V. (2021, March 30). New tests prove: LFP lithium batteries live longer than NMC. One Charge. https://www.onecharge.biz/blog/lfp-lithium-batteries-live-longer-than-nmc/


• Xu, C., Dai, Q., Gaines, L, Hu, M., Tukker, A., & Steubing, B. (2020). Future material demand for automotive lithium-based batteries. Communications Materials, 1(99), 1-10. https://doi.org/10.1038/s43246-

020-00095-x

EV Charging Infrastructure Could See a Major Boost From Infrastructure Bill

• Carney, K. (2021, April 30). Road miles by state. Cubit’s Blog. https://blog.cubitplanning.com/2010/02/road-miles-by-state/

• Musk, E. [@elonmusk]. (2021, August 26). Our intent with this pack is that product experience is roughly equivalent between nickel & iron. I’d personally slightly opt [Tweet]. Twitter.

https://twitter.com/elonmusk/status/1431040308943364097?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1431040308943364097%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%

2F%2Finsideevs.com%2Fnews%2F529228%2Ftesla-model3-lfp-battery-option%2F

• U.S. Department of Energy. (2021). Alternative fueling station locator. Alternative Fuels Data Center.

https://afdc.energy.gov/stations/#/analyze?country=US&fuel=ELEC&ev_levels=all&access=public&access=private

Lithium Supply / Demand Imbalance Poses Risks to Electric Vehicle Adoption

• Bandy, M, Burke, D., & Pyfer, K. (2021, September 10). Albemarle 2021 investor day: Marking the world safe & sustainable [Webcast]. Albemarle.

https://s28.q4cdn.com/860913888/files/doc_presentations/2021/ALB-Investor-Day-2021-Master-Presentation-(2).pdf

• Benchmark Mineral Intelligence. (2021, April 7). Global battery arms race: Benchmark private investor webinar. [PowerPoint slides]




Appendix: Sources – Mobility

Consumer Pulse: What Are the Barriers to EV Adoption?

• Global X. (2021, September). Survey on Mobility [Unpublished]. Research & Strategy Team at Global X ETFs. New York, NY.

Electrified Mobility to Grow >10x Over the Next Decade

• Baltic, T., Cappy, A., Hensley, R., & Pfaff, N. (2019, December). The future of mobility is at our doorstep: Compendium 2019/2020. McKinsey Center for Future Mobility.

https://www.mckinsey.com/~/media/McKinsey/Industries/Automotive%20and%20Assembly/Our%20Insights/The%20future%20of%20mobility%20is%20at%20our%20doorstep/The-future-of-mobility-is-at-

our-doorstep.ashx

• International Energy Agency. (2021). Global EV outlook 2021: Accelerating ambitions despite the pandemic. https://www.iea.org/reports/global-ev-outlook-2021/trends-and-developments-in-electric-vehicle-

markets




21st Century Infrastructure

O U T L O O K 2 0 2 2 : C H A R T I N G D I S R U P T I O N – 2 1 S T C E N T U R Y I N F R A S T R U C T U R E

Whether newly built or revitalized, infrastructure in the 21st century has two key

characteristics:

1) Enhanced flexibility to meet the ever-changing requirements of

growing urban populations as well as complex global economies

fueled by data and connectivity; and

2) Superior resiliency to withstand increasingly frequent climate events, in

addition to the test of time.

The recently passed Infrastructure Investment and Jobs Act (IIJA) in the United

States, alongside similar government stimulus programs overseas and ample

private investments, poses a generational opportunity to refresh and enhance

transportation, energy, and digital infrastructure.



0ZB

2ZB

4ZB

6ZB

0B

5B

10B

15B

20B

25B

30B

2018 2019 2020 2021* 2022* 2023*

Connected Devices (B, LHS) Internet Traffic (ZB, RHS)

21st Century Infrastructure Is Defined by Structural Trends, Not Classical Definitions

Twenty-first century infrastructure must meet the ever-growing requirements of large, urban populations, as well as complex global economies

fueled by data and connectivity. It also needs to be robust and dynamic enough to withstand changing climates and the test of time.

Demographics: Population growth and trends toward urbanization and globalization

strain infrastructure beyond its original design.

• The world population grew 2.6x since 1960 and could grow another 25% by 2050.

• By 2050 almost 70% of the population could live in cities.1,2

3.4B

3.1B

4.…

6.7B

0B

2B

4B

6B

8B

1950 1960 1970 1980 1990 2000 2010 2020* 2030* 2040* 2050*

Rural Urban

GLOBAL URBAN AND RURAL POPULATIONS (Billions)

*Forecast

ANNUAL INTERNET TRAFFIC VOLUMES (Zettabytes, RHS)

GLOBAL CONNECTED DEVICES (Billions, LHS)

*Forecast

Technology: New technologies and their importance to mobility, commerce, and our

lives are fundamentally changing.

• The number of internet connected devices worldwide could reach 26.4B by

2026, over 2x the number of connections in 2020.6

• We project that by 2030, 81% of the global population will be using the internet,

up from 55% in 2020 and 29% in 2010.7

Climate Risk & Obsolescence: The useful life of infrastructure assets around the world

are stretched thin after decades of use. Climate change is accelerating this trend.

• 40% of U.S. roads are in poor or mediocre condition; 300 bridges in Italy are at risk

of collapse; U.K. water pipes are 70 years old, on average.3,4,5

• By 2050, the cost of adapting infrastructure for climate could reach $150-$450

billion a year.5

Sources: Text: 1. Worldometer, 2021 2. United Nations Department of Economic and Social Affairs, 2018 3. American Society of Civil Engineers, 2020 4. Willsher, et al., 2018 5. Woetzel, et al., 2020 6. Jonsson, et al., 20201 7. The World

Bank, 2021 Charts: United Nations Department of Economic and Social Affairs, 2018; Cisco, 2020; Jonsson, et al., 2021




Infrastructure in the United States: Just How Bad Is It Really?

America’s outdated infrastructure is in dire need of a 21st century overhaul – a C- grade from the American Society of Civil

Engineers says as much. Deteriorating roads, waterways, and seaports are liabilities to the country’s economic future.1

43% of roads were in poor or

mediocre condition in 2019

9% of drinking water systems

serve 80% of the population

70% of transmission lines are at

least 25 years old

Sources: 1. American Society of Civil Engineers, 2020 2. Rosenthal & Craft, 2020 3. Philip, et al., 2017 4. Mayans, 2019 5. Aniti, 2018 6. Rice, 2019 7. American Society of Civil Engineers, 2017 8. Morrison, 2019 9. Mann,

2019 10. American Society of Civil Engineers, 2021


Segment Current State Economic/Social Impact

Roads &

Bridges1

• 43% of roads were in poor or mediocre condition as of 2019

• 7.5% of U.S. bridges were structurally unsound as of 2019

• Roads and bridges have a $786 billion project backlog

• Traffic delays cost $166 billion in productivity and fuel (2017)

• Traffic fatalities increased 60% between 2009 and 2019

• Poor road condition cost drivers $130 billion a year in car

repairs

Water

Utilities1, 2, 3, 4

• 9% of drinking water systems serve 80% of U.S. population

• 6 billion gallons of drinking water are lost to leaky pipes daily

• Up to 22 million Americans drink water delivered by lead pipes

• 20% of U.S. households are not connected to public sewers

• $7.6 billion in drinking water was lost to leaks in 2019

• 63 million people exposed to unsafe drinking water in the U.S.

• 500,000+ U.S. children have elevated lead levels

Electric

Utilities1, 5, 6

• 70% of U.S. transmission lines are at least 25 years old

• 60% of circuit breakers are at least 30 years old

• 6% of electricity providers serve 72% of U.S. customers

• 2018’s ‘Camp Fire,’ was partially caused by faulty power lines

and caused $16.5 billion in damages

• Power outages cost the U.S. $28 billion - $169 billion, annually

• Distribution infrastructure issues cause 92% of outages

Rail

+

Public

Transit1, 7, 8, 9, 10

• U.S. passengers took 32.5 million trips on Amtrak in 2019,

18.8 million of which were in the Northeast Corridor (NEC)

• Average age of major NEC backlog projects is ~110 years old

• 45% of Americans have no access to public transit

• Only 73% of Amtrak trains were on time in 2018

• Amtrak’s 2018 operating losses were $171 million, partially due

to delays

• Public transit delays could cost riders $1.2 billion over the next

10 years



Do Infrastructure Needs Align With Sentiment? U.S. infrastructure requires $2.6 trillion of additional investment

over the next 10 years across myriad segments. Absent the

necessary investment, the country risks losing $10 trillion in

GDP, $23 trillion in total output, and 3 million jobs by 2039.1

RESPONDENTS’ GRADE FOR THEIR LOCAL INFRASTRUCTURE (%)

RESPONDENTS’ AGREEING WITH NEED TO REVITALIZE LOCAL INFRASTRUCTURE (%)

Note: N = 547, population gender & age balanced according to U.S. Census data.

• 74% of Americans agree that their local infrastructure needs revitalization

• 56% of Americans would give their local infrastructure a grade of ‘C’ or lower

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

2007 2009 2011 2013 2015 2017 2019

Note: GDP data from St. Louis Fed, construction spend from US Census, both seasonally adjusted annual rates.

PUBLIC CONSTRUCTION SPEND RELATIVE TO ADJUSTED GDP (%)

Source: ASCE, 2021.

ADDITIONAL INVESTMENT NEEDED BY SEGMENT OVER NEXT 10 YEARS ($B)

$1,215B

$638B $599B

$136B

$0

$500

$1,000

$1,500

SurfaceTransportation

Utilities Buildings &Structures

Ports & Airports

0%

20%

40%

60%

80%

In Agreement Neutral In Disagreement

Strongly Agree Agree Netural Strongly Disagree Disagree

0%

20%

40%

60%

B & Above C & Below

A B C D F

Sources: Text: 1. American Society of Civil Engineers, 2020 Charts: American Society of Civil Engineers, 2020; U.S.

Census Bureau, 2021; Global X, 2021




From Wishlist to Reality: The Infrastructure Investment and Jobs Act (IIJA)1

The bipartisan IIJA passed both houses of Congress and reached President Biden’s desk on November 6th, 2021. The $1.2 trillion package

includes $550 billion of new spending across a wide range of 21st century infrastructure areas that could transform the United States.

Source: Infrastructure Investment and Jobs Act, 2021

$17B

$21B

$25B

$47B

$47B

$63B

$65B

$66B

$73B

$121B

$0 $25 $50 $75 $100 $125

Ports & Waterways

EnvironmentalRemdiation

Airports

Public Transport

Resiliency

Water Infrastructure

Digital Infrastructure

Passenger/Freight Rail

Electrifcation (Grid +EVs)

Roads, Bridges,Highways

IIJA SPENDING BY INFRASTRUCTURE AREA ($ billion)

Relevant Components and Equipment by Spending Area

• Transportation & Transit: Asphalt/concrete equipment, traffic management, road signage;

railcars, barges, axles/couplers; construction equipment

• Electrification: Electrical wiring, connectors, insulators, measurement systems, power structures,

distribution poles, transformers, circuit breakers, enclosures, arresters, bushings, electric control

boxes, electric vehicle charging station components

• Water Infrastructure: Water distribution pipes, protective lining, pumps, valves, water meters,

filtration systems, filtration membranes

• Digital Infrastructure: Wiring, cables, connectors, contacts, communication towers components

Relevant Raw Materials and Composites by Spending Area

• Transportation & Transit: Concrete, asphalt, aggregates for composites like concrete and asphalt

or are used as stand-alone materials, steel, iron, aluminum

• Electrification: Copper, aluminum, nickel, brass, and other metals used in electrical transmission;

as well as plastics used for electrical insulation

• Water Infrastructure: Concrete, copper, plastics, and other materials used in water distribution

pipes, sealants, and coatings for distribution/storage; treatment chemicals

• Digital Infrastructure: Copper, aluminum, and other metals used in data transmission cables; as

well as steel and aluminum for communications towers

Industrial Transportation

Could benefit from the government footing the bill for billions of dollars of capital expenditure on rail

networks and from expanded networks allowing for improved and increased freight delivery.

Companies Offering Relevant Products and Services Could Benefit From IIJA Spending




Infrastructure Spending Takes Time, as Do Its Benefits

Infrastructure spending is not instantaneous – nor are its benefits. Only over time does spending translate to revenues, economic

growth, and social impact.

• Investment: $25 ($252B in 2021 dollars) to build 41,000 miles of Interstate Highway.

• Construction: Work concluded in 1992, with total costs amounting to $129B (more

than $500B adjusted for inflation).

• Outcome: As much as 25% of the country’s productivity gains from 1950 to 1989 and

3.9% of current real GDP can be traced back to the Act.

Federal Aid Highway Act of 19561

• Transportation: Authorized $48.1B in spending for the Department of Transportation.

• Deployment: Though nearly 70% of spending occurred in 2011, ARRA-related

transportation spending averaged $1.6B annually from 2013-2019.

• Outcome: Initial spending boosted employment as intended, with related economic

growth kicking in by 2015.

American Recovery and Reinvestment Act 2009 (ARRA)2

$0B

$6B

$12B

$18B

2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017* 2018* 2019*

ARRA TRANSPORTATION INFRASTRUCTURE SPENDING OVER TIME ($B)

*Average

AVAILABLE INFRASTRUCTURE INVESTMENT & JOBS ACT SPENDING OVER TIME ($B)

Construction Timelines:

Infrastructure construction takes many years, even without complications. Over time, spending

translates to revenue for contractors, engineers, and consultants before eventually reaching

component/equipment manufacturers and producers of materials.

$0B

$100B

$200B

$300B

$400B

$500B

$600B

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Spending Authorized Spending

Planning Timelines:

Prior to construction, infrastructure projects must undergo extensive planning and review. This

phase translates to revenues for consultants and infrastructure specialists.

• After 5 years the federal government will have distributed 51% of total authorized spending3

• After 10 years the federal government will have distributed 86% of total authorized spending3

Sources: Text : 1. Phelps, 2021 2. Mallett, 2020 3. Congressional Budget Office, 2021 Charts: Mallett, 2020; Congressional Budget Office,2021

Spending represents funds that the

federal government will have dispersed.

Authorized spending includes total funding

budgeted by the bill as well as projected

revenues that bill provisions could generate.




Adapting to Climate Change With Resilient Infrastructure

Mother nature appears to be harsher than ever, with natural disasters occurring at unprecedented rates. Twenty-first century

infrastructure must be built to withstand these events and other climate change-related impacts.

Energy Infrastructure

In 2021, hydropower plants in the United

States, China, and Brazil cut production

due to unprecedented drought conditions.5

0

5

10

15

20

25

$0B

$50B

$100B

$150B

$200B

$250B

$300B

$350B

$400B

2000 2005 2010 2015 2020

Billion Dollar Disasters (#, RHS) Combined Cost ($B, LHS)

COST OF BILLION-DOLLAR DISASTERS IN THE US ($B, LHS)

FREQUENCY OF SUCH DISASTERS (#, RHS)

Transportation Infrastructure

The Pacific Northwest’s 2021 wildfires

forced freight trains to reroute, adding

thousands of miles.2

Population Centers

Some estimate that rising sea levels and

flooding could displace 630 million

people by 2100.1

Water Infrastructure

In 2021, Hurricane Ida disrupted access

to clean water for over 2 million people in

Louisiana and Pennsylvania.3,4

Norway is developing a 17-mile floating bridge to enable continued transit and trade amid the

harsh storms and flooding that plague the country’s west coast and are likely to worsen with

climate change.

• The route would be first of its kind, consisting of reinforced cylinder roads submerged 60-

150ft below the water and fastened to buoys.

Building Resilience to Storm Surges With Floating Bridges6

Venice’s MOSE project will implement a coordinated array of hydraulic gates to shield the city

against the ocean flooding that threatens to overtake it by 2100.7

• The project involves 78 sensor-activated retractable sheets that can form a barrier around

Venice within 30 minutes.8

• MOSE walls are resilient against water levels 300cm high, 100cm higher than current peak

tides.8

Fighting Rising Sea Levels With Automated Floodgates

Integrating vegetation into physical infrastructure can mitigate warming in cities where

temperatures average 1⁰C - 7⁰C hotter than surrounding rural areas.9

• Vegetation possesses higher albedo (reflectivity) and lower heat admittance than common

building materials, such as concrete, and more effectively regulates building temperatures.

• Applying foliage to facades/walls can reduce internal temperatures of a building 3⁰C - 5⁰C,

while applying plants to rooftops can reduce surface temperatures by 15⁰C - 45⁰C.10

Repelling Heatwaves With Green Surfaces

Sources: Text: 1. Ayeb-Karlsson, et al., 2020 2. Gormley, 2021 3. Maykuth, 2021 4. Rubiano, 2021 5. Bernstein, et al., 2021 6. Minoretti, 2019 7. Varley, 2018 8. Stancati & Sylvers, 2019 9. United States Environmental Protection Agency, 2021 10. Ruefenacht & Acero, 2017

Chart: National Centers for Environmental Information, 2021




Untangling Supply Chains With Smarter Infrastructure and Automation

Trade hubs are struggling to keep up with new shipping volumes that are driven by the rise of e-commerce, globalization, and pent-up demand

related to the COVID-19 pandemic. Investment in logistics infrastructure could alleviate supply chain stresses and preexisting inefficiencies.

• Equipment limitations, lack of capacity, and scheduling differences between ports cause backlogs.

– Automated cranes, such as those used at the Port of Rotterdam, are twice as efficient as

those operated by humans. Widespread adoption could alleviate supply chain stresses.1

• Global container port capacity is forecasted to grow 2.5% annually between 2021 and 2025, but

growth in global demand is likely to outpace over this time.2

‒ Ports should expand capacity and depth to accommodate more and larger ships.

Expansion Projects and Robotics Could Help Relieve Port Congestion

• Nearly 20% of flights in the United States experience delays of 15 minutes or more as airports

struggle to coordinate capacity while monitoring the skies.3

– AI-informed design changes and management could increase runway capacity by 10%.4

– Only 3% of aircraft delays are attributable to weather. Thus, air carrier or systematic aviation

delays are avoidable with investments in terminal expansion and air traffic control.5

AI-Optimized Airports Could Reduce Delays

• Suboptimal weight distribution in freight containers reduces locomotive efficiency, damages tracks,

and sometimes causes derailment or delays.

– IoT sensors placed in containers and along tracks could monitor for damages and inform better

distribution tactics - deployment of sensors in the Netherlands reduced derailments by 75%.6

• Expanding rail could prove helpful for supply chains, as freight shipping is faster over long

distances, transports more goods, and is up to 75% more fuel efficient than trucking.7

Railroad Monitoring and Expansion Could Yield Supply Chain Benefits


10%

11%

12%

13%

14%

15%

16%

1.5M

2.0M

2.5M

3.0M

3.5M

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020

Q42020

Q12021

Q22021

TEU (LHS) E-Commerce Share (RHS)

PORT OF LOS ANGELES CARGO VOLUMES (MILLION TEUs, LHS)

E-COMMERCE SHARE OF TOTAL US RETAIL SALES (%, RHS)

• Growth in e-commerce sales share in Q1 2020, contributed to 4% YoY growth in cargo

volumes for Q2-Q4 2020.10

• In Q1-Q2 2021, e-commerce sales and cargo volumes were both up, growing 20% YoY

and 44% YoY respectively.10

Note: TEU = Twenty-foot equivalent units (shipping volume)

Los Angeles’ Logistical Logjam: Ships are waiting more than two weeks to unload

their cargo at the Port of L.A.8 The port normally takes in 40% of seaborne U.S. imports

but cannot accommodate amplified e-commerce sales and pandemic-related demand

trends.9 Without capacity or efficiency investments, logistical centers like the Port of L.A.

could continue to suffer bottlenecks as e-commerce sales grow.

Sources: Text: 1. Lincicome, 2021 2. Wackett, 2021 3. Bureau of Transportation Statistics, 2021 4. Love, 2020 5. American Society of Civil Engineers, 2020 6. Daws, 2017 7. Association of American Railroads, 2021 8. Murray, 2021 9. Karlamangla, 2021 10. The Port of Los Angeles, 2021;

U.S. Census Bureau, 2021 Chart: Global X analysis using data from The Port of Los Angeles, 2021; U.S. Census Bureau, 2021



40% reduction in gas emissions

from smart parking5

16.5 zettabytes of data produced by smart

cities in 20207

Leveraging Technology for Smarter Cities

25% reduction

in travel times

from stop lights2

30-40% crime reduction due

to adoption of smart city

applications3

$1.5 trillion additional GDP per

annum from further 5G deployment1

• Bicycle-sharing

• Ride-hailing

• AV service

• Bus-sharing

• Car-sharing20% utilities savings on water

leakage from smart metering9

85% fewer emissions per unit of data

transported by 2030 due to 5G4

60% fewer emissions in cities

with digital waste management6

The data collected, transmitted, and processed by sensors, data clouds, and AI in smart cities introduce new utility and efficiencies to infrastructure.

235% projected increase in smart grid energy saving over next five years8

Frequency /

Capacity< 6GHz > 6GHz

Bandwidth 100MB/s – 1GB/s 10-20GB/s

Latency ~10ms ~1ms

100x capacity for connected devices and sensors

>5x increase in network responsiveness

10-100x increase in network speed

4G / 4G LTE 5G

Key Technologies for Smart Cities

Smart cities feature tech-enabled infrastructure that collect

data to manage assets, preserve resources, and improve

efficiency.

• Connected sensors embedded in roads, buildings,

vehicles, and other infrastructure collect data in real time,

transmitting them using radio frequencies.

• Data clouds & AI store and process data from sensors and

other sources, generating instructions for infrastructure.

• Next-gen networks are the lifeblood of connected

infrastructure, enabling the transmission of data and related

instructions in real time.

Sources: 1. Accenture Strategy, 2021 2. Damkroger, 2019 3. Libelium, n.d. 4. Woetzel, et al., 2018 5. Locke, 2021 6. Motavalli, 2020 7. Knoppova, 2021 8. Demerlé, 2020 9. Maynard & Sat, 2021




5G Networks & Data Centers: The Backbones of Digital Infrastructure in the 21st Century

In today’s digital age, connectivity is ubiquitous and data volumes are growing exponentially. Infrastructure must be built with this in mind.

5G networks are faster than past generations of networks and provide the

bandwidth needed for millions of devices to connect simultaneously.

2061

93

207

4G Fixed Broadband (Global) Fixed Broadband (U.S.) 5G

DOWNLOAD SPEED BY CONNECTION (Mbps)

Sources: Text: 1. Frost & Sullivan, 2021 2. Heinrich, 2017 3. SP Thought Leadership Team, 2015 4. Zhang, et al., 2018 Charts: ITU, 2019; Cisco, 2020; Ericsson, 2021; Rydning, 2021

Autonomous Vehicles

Generate ~1.4-19TB/h

(depending on # of sensors)

compared to 25GB/h for

connected cars today2

Data centers offer large-scale, centralized storage to accommodate the

heightened data volumes of today’s digital age.

0ZB

40ZB

80ZB

120ZB

160ZB

200ZB

2020 2021 2022* 2023* 2024* 2025*

Annual Data Produced Installed Storage Capacity

'20 - '25

CAGR

+23%

+19%

DATA PRODUCED AND INSTALLED STORAGE CAPACITY (ZB)

Smart Grids

A 1M meter smart grid

with a sampling rate of 4

times per hour would

generate 2,920TB/year4

Smart Cities

In 2019, a smart city

with 1M residents was

estimated to generate

180M GB/day of data3

$432 billionAnnual Data Center

Investment (2025)

Annual data center investment is expected to

increase at a 10% CAGR from $245 billion in 2019

to $432 billion by 2025.1

*Forecast


5G adoption is still in its infancy across all major markets. This is expected to

shift in the coming years, as supportive infrastructure is deployed.

19% 16%

8%6% 6% 5% 5% 5% 4%

China SouthKorea

HongKong

Qatar U.S. Netherlands UAE Kuwait Australia

5G PENETRATION BY COUNTRY (%)

GLOBAL MOBILE CONNECTIONS (B) BY SUBSCRIPTION (%)

100% 96% 92% 87% 82% 76% 68% 53%

4% 8% 13%18% 24% 32% 47%

0B

2B

4B

6B

8B

2019 2020 2021* 2022* 2023* 2024* 2025* 2026*

LTE 5G



DNA StorageAmy Webb


Source: 1. Reinsel, et al., 2018

You can fit approximately 33 zettabytes –– literally all our data –– into the size of a ping pong ball using a

different technology…1

Traditional servers require massive

space and cooling, but you can fit

about 33 zettabytes –– literally all

our data –– into the size of a ping pong

ball using a different technology: DNA.1

There are practical reasons to

harness nature’s hard drive. DNA is

nearly indestructible. Adaptive DNA

Storage Codex, or ADS Codex, is one

of many projects now working to use

DNA as a storage medium. Chinese

scientists at Tianjin University stored

445KB of data in an E. coli cell.

Twist Bioscience discovered how to

make hyperdense, stable, and

affordable DNA storage. By depositing

microscopic drops of nucleotides onto

silicon chips, Twist’s robots can create

a million short strands of DNA at a time.

The end result is a tiny, pill-sized

container that could someday hold

hundreds of terabytes of capacity.



Appendix: Sources – 21st Century Infrastructure

21st Century Infrastructure Is Defined by Structural Trends, Not Classical Definitions

Text:

• American Society of Civil Engineers. (2020, December). 2021 report card for America’s infrastructure. https://infrastructurereportcard.org/

• Jonsson, P., Carson, S., Davis, S. Linder, P., Lindberg, P., Ramiro, J., Outes, J., Bhardwaj, A., Garcia, C. M., Baur, H., Alger, J., Krautkremer, T., Chandra, R., Lundborg, T., Belaoucha, B., Burstedt, F.,

Latta, C., McCrorey, & Kuoppamaki, K. (2021, June). Ericsson Mobility Report. Ericsson. https://www.ericsson.com/4a03c2/assets/local/reports-papers/mobility-report/documents/2021/june-2021-ericsson-

mobility-report.pdf

• The World Bank. (2021.) Individuals using the internet (% of population). https://data.worldbank.org/indicator/IT.NET.USER.ZS

• United Nations Department of Economic and Social Affairs. (2018, May 16). 68% of the world population projected to live in urban areas by 2050.

https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html

• Willsher, K., Tondo, L., & Henley, J. (2018, August 16). Bridges across Europe are in a dangerous state, warn experts. The Guardian. https://www.theguardian.com/world/2018/aug/16/bridges-across-europe-

are-in-a-dangerous-state-warn-experts

• Woetzel, J., Pinner, D., Samandari, H., Engel, H., Krishnan, M., Boland, B., Cooper, P., & Roby, B. (2020, August 19). Will infrastructure bend or break under climate stress? McKinsey Global Institute.

https://www.mckinsey.com/business-functions/sustainability/our-insights/will-infrastructure-bend-or-break-under-climate-stress

• Worldometer. (2021). World Population by Year. https://www.worldometers.info/world-population/world-population-by-year/

Charts:

• Cisco. (2020, March 9). Cisco annual internet report (2018–2023) [White paper]. https://www.cisco.com/c/en/us/solutions/collateral/executive-perspectives/annual-internet-report/white-paper-c11-741490.html

• Jonsson, P., Carson, S., Davis, S. Linder, P., Lindberg, P., Ramiro, J., Outes, J., Bhardwaj, A., Garcia, C. M., Baur, H., Alger, J., Krautkremer, T., Chandra, R., Lundborg, T., Belaoucha, B., Burstedt, F.,

Latta, C., McCrorey, & Kuoppamaki, K. (2021, June). Ericsson Mobility Report. Ericsson. https://www.ericsson.com/4a03c2/assets/local/reports-papers/mobility-report/documents/2021/june-2021-ericsson-

mobility-report.pdf

• United Nations Department of Economic and Social Affairs. (2018). 2018 revision of world urbanization prospects. https://population.un.org/wup/

Infrastructure in the United States: Just How Bad Is It Really?

• American Society of Civil Engineers. (2017, January). 2017 report card for America’s infrastructure. https://www.infrastructurereportcard.org/wp-content/uploads/2016/10/2017-Infrastructure-Report-Card.pdf


• American Society of Civil Engineers. (2021, March). 2021 report card for America’s infrastructure: Transit. https://infrastructurereportcard.org/cat-item/transit/

• Aniti, L. (2018, July 20). Major utilities continue to increase spending on U.S. electric distribution systems. U.S. Energy Information Administration. https://www.eia.gov/todayinenergy/detail.php?id=36675

• Mann, T. (2019, November 8). Amtrak, seeking to break even, sees some light at the end of the tunnel. The Wall Street Journal. https://www.wsj.com/articles/amtrak-seeking-to-break-even-sees-some-light-

at-the-end-of-the-tunnel-11573223401#:~:text=Amtrak%20Chief%20Executive%20Richard%20Anderson,and%20tunnels%E2%80%94by%20next%20summer.

• Mayans, L. (2019). Lead poisoning in children. American Family Physician, 100(1), 24-30. https://www.aafp.org/afp/2019/0701/p24.html

• Morrison, J. (2019, October 14). Train operations: Better estimates needed of the financial impacts of poor on-time performance [OIG-A-2020-001]. Amtrak Office of Inspector General National Railroad

Passenger Corporation. https://amtrakoig.gov/sites/default/files/reports/OIG-A-2020-001%20OTP%20mandate.pdf

• Philip, A., Sims, E., Houston, J., & Konieczny, R. (2017, August 15). 63 million Americans exposed to unsafe drinking water. USA Today. https://www.usatoday.com/story/news/2017/08/14/63-million-

americans-exposed-unsafe-drinking-water/564278001/

• Rice, D. (2019, January 8). USA had world's 3 costliest natural disasters in 2018, and Camp Fire was the worst. USA Today. https://www.usatoday.com/story/news/2019/01/08/natural-disasters-camp-fire-

worlds-costliest-catastrophe-2018/2504865002/

• Rosenthal, L., & Craft, W. (2020, May 4). Buried lead: How the EPA has left Americans exposed to lead in drinking water. APM Reports – Environmental Protection Network.

https://www.environmentalprotectionnetwork.org/news/buried-lead-how-the-epa-has-left-americans-exposed-to-lead-in-drinking-water/





Do Infrastructure Needs Align With Sentiment?

Text:


Charts:


• Global X. (2021, April). Survey on 21st Century Infrastructure [Unpublished]. Research & Strategy Team at Global X ETFs. New York, NY.

• U.S. Census Bureau. (2021, November 1). Total public construction Spending: Total construction in the United States [TLPBLCONS]. Retrieved from FRED, Federal Reserve Bank of St. Louis.

https://fred.stlouisfed.org/series/TLPBLCONS

From Wishlist to Reality: The Infrastructure Investment and Jobs Act (IIJA)

• Infrastructure Investment and Jobs Act, H.R. 3684, 117th Cong. (2021). https://www.congress.gov/bill/117th-congress/house-bill/3684

Infrastructure Spending Takes Time, As Do Its Benefits

Text:

• Congressional Budget Office. (2021, August 9). Senate amendment 2137 to H.R. 3684, the Infrastructure Investment and Jobs Act, as proposed on August 1, 2021. Congressional Budget Office Cost

Estimate. https://www.cbo.gov/system/files/2021-08/hr3684_infrastructure.pdf

• Mallett, W. J. (2020, May 5). Transportation infrastructure investment as economic stimulus: Lessons from the American Recovery and Reinvestment Act of 2009 (Report No. R46343). Report prepared for

Members and Committees of Congress by the Congressional Research Service. https://crsreports.congress.gov/product/pdf/R/R46343

• Phelps, H. (2021). When interstates paved the way: The construction of the Interstate Highway System helped to develop the U.S. economy. Economic History, Second/Third Quarter, 24-27.

Charts:

• Congressional Budget Office. (2021, August 9). Senate amendment 2137 to H.R. 3684, the Infrastructure Investment and Jobs Act, as proposed on August 1, 2021. Congressional Budget Office Cost

Estimate. https://www.cbo.gov/system/files/2021-08/hr3684_infrastructure.pdf

• Mallett, W. J. (2020, May 5). Transportation infrastructure investment as economic stimulus: Lessons from the American Recovery and Reinvestment Act of 2009 (Report No. R46343). Report prepared for

Members and Committees of Congress by the Congressional Research Service. https://crsreports.congress.gov/product/pdf/R/R46343





Adapting to Climate Change With Resilient Infrastructure

Text:

• Ayeb-Karlsson, S., McMichael, C., Kelman, I., & Dasgupta, S. (2020, September 30). The impact of rising sea levels on mass migration. World Economic Forum.

https://www.weforum.org/agenda/2020/09/migration-rising-sea-levels-climate-change-ocean-environment-poeple-movement

• Bernstein, S., Spring, J., & Stanway, D. (2021, August 13). Droughts shrink hydropower, pose risk to global push to clean energy. Reuters. https://www.reuters.com/business/sustainable-

business/inconvenient-truth-droughts-shrink-hydropower-pose-risk-global-push-clean-energy-2021-08-13/

• Gormley, S. (2021, July 27). Wildfires have shut down BNSF freight rail routes from California into Oregon. Willamette Week. https://www.wweek.com/news/environment/2021/07/27/wildfires-have-shut-down-

bnsf-freight-rail-routes-from-california-into-oregon/

• Maykuth, A. (2021, October 10). Hurricane Ida wrecked a major water plant and nearly caused a drinking-water catastrophe for Philly’s suburbs. The Philadelphia Inquirer.

https://www.inquirer.com/business/water-treatment-plant-flooding-pennsylvania-nj-infrastructure-20211010.html

• Minoretti, A. (2019, February 19). Can Norway build the world’s first submerged floating tube bridge? Intelligent Transport. https://www.intelligenttransport.com/transport-articles/75927/norway-floating-

submerged-bridge/

• Rubiano, M. P. (2021, September 10). Hurricane Ida left a huge water crisis in its wake. Mother Jones. https://www.motherjones.com/environment/2021/09/hurricane-ida-unsafe-drinking-water-crisis-new-

orleans-louisiana/

• Ruefenacht, L., & Acero, J. A., Eds. (2017, June 1). Strategies for cooling Singapore: A catalogue of 80+ measures to mitigate urban heat island and improve outdoor thermal comfort. Cooling Signapore.

https://doi.org/10.3929/ethz-b-000258216

• Stancati, M., & Sylvers, E. (2019, November 21). The wall that would save Venice from drowning is underwater. The Wall Street Journal. https://www.wsj.com/articles/the-wall-that-would-save-venice-from-

drowning-is-underwater-11574332203#:~:text=It%20took%20until%20the%201980s,structure's%20environmental%20and%20visual%20impact.

• United States Environmental Protection Agency. (2021, September 15). Learn about heat islands. https://www.epa.gov/heatislands/learn-about-heat-islands

• Varley, R. (2018, May 21). Science says this is when Venice will become an underwater city. Culture Trip. https://theculturetrip.com/europe/italy/articles/science-says-this-is-when-venice-will-become-an-

underwater-city/

Chart:

• National Centers for Environmental Information (NCEI). (2021, October 8). U.S. billion-dollar weather and climate disasters. National Oceanic and Atmosphere Administration.

https://www.ncdc.noaa.gov/billions/, DOI: 10.25921/stkw-7w73





Untangling Supply Chains With Smarter Infrastructure and Automation

Text:

• American Society of Civil Engineers. (2020, December). 2021 infrastructure report card: Aviation. https://infrastructurereportcard.org/wp-content/uploads/2020/12/Aviation-2021.pdf

• Association of American Railroads. (2021, April). Freight rail & preserving the environment. https://www.aar.org/wp-content/uploads/2020/06/AAR-Sustainability-Fact-Sheet.pdf

• Bureau of Transportation Statistics. (2021). On-time performance - Reporting operating carrier flight delays at a glance. U.S. Department of Transportation. https://www.transtats.bts.gov/HomeDrillChart.asp

• Daws, R. (2017, October 4). 2,000 IoT sensors will monitor the Netherlands’ rail network — UK is the next stop. IoTnews. https://iottechnews.com/news/2017/oct/04/2000-iot-sensors-will-monitor-netherlands-

rail-network-uk-next-stop/

• Karlamangla, S. (2021, October 18). The busiest port in the U.S. The New York Times. https://www.nytimes.com/2021/10/18/us/port-of-los-angeles-supply-chain.html

• Lincicome, S. (2021, September 22). America’s ports problem is decades in the making. CATO Institute. https://www.cato.org/commentary/americas-ports-problem-decades-making

• Love, A. (2020, February 18). A staggering new approach to boosting runway capacity. Airport Technology. https://www.airport-technology.com/features/how-to-increase-runway-capacity/

• Murray, B. (2021, November 13). Ships keep coming, pushing U.S. port logjam and waits to records. Bloomberg. https://www.bloomberg.com/news/articles/2021-11-13/ships-keep-coming-pushing-u-s-port-

logjam-and-waits-to-records

• The Port of Los Angeles. (2021). Container statistics. https://www.portoflosangeles.org/business/statistics/container-statistics

• U.S. Census Bureau. (2021, November 16). Monthly retail trade report. https://www.census.gov/retail/index.html

• Wackett, M., (2021, July 26). Global container port capacity will struggle to catch up with rising demand. The Load Star. https://theloadstar.com/global-container-port-capacity-will-struggle-to-catch-up-with-

rising-demand/

Chart:

• The Port of Los Angeles. (2021). Container statistics. https://www.portoflosangeles.org/business/statistics/container-statistics

• U.S. Census Bureau. (2021, November 16). Monthly retail trade report. https://www.census.gov/retail/index.html

Leveraging Technology for Smarter Cities

• Accenture Strategy. (2021, February). The impact of 5G on the United States economy. Accenture. https://www.accenture.com/_acnmedia/PDF-146/Accenture-5G-WP-US.pdf#zoom=50

• Damkroger, T. (2019, December 5). High performance computing opens possibilities for smart cities. Intel IT Peer Network. https://itpeernetwork.intel.com/hpc-smart-cities/#gs.gvnt1y

• Demerlé, R. (2020, November 11). Seeking smart water management solutions. WaterWorld. https://www.waterworld.com/international/utilities/article/14185898/seeking-smart-water-management-solutions

• Knoppova, J. (2021). How smart waste fits in UN sustainable development goals? Promoting health. Sensoneo. https://sensoneo.com/how-smart-waste-fits-in-un-sustainable-development-goals-part-1/

• Libelium. (n.d.) IoT solutions: Smart parking. https://www.libelium.com/downloads/flyers/flyer-parking-libelium-en.pdf

• Locke, J. (2021, April 3). Can 5g help the environment? Digi. https://www.digi.com/blog/post/can-5g-help-the-environment

• Maynard, N., & Sat, D. (2021, April 10). Smart grid: Industry trends, competitor leaderboard and market forecasts 2021-2026. Retrieved from Juniper Research database.

• Motavalli, J. (2020, October 30). It’s time for smart traffic lights. Autoweek. https://www.autoweek.com/news/a34498280/its-time-for-smart-traffic-lights/

• Woetzel, J., Remes, J., Boland, B., Lv, K., Sinha, S., Strube, G., Means, J., Law, J., Cadena, A., & von der Tann, V. (2018, June 5). Smart cities: Digital solutions for a more livable future. McKinsey Global

Institute. https://www.mckinsey.com/business-functions/operations/our-insights/smart-cities-digital-solutions-for-a-more-livable-future





5G Networks & Data Centers: The Backbones of Digital Infrastructure in the 21st Century

Text:

• Frost & Sullivan. (2021, January.) Increased investment by cloud and colocation providers drives the global data center market. Retrieved from Frost & Sullivan database.

• Heinrich, S. (2017). Flash memory in the emerging age of autonomy. Lucid Motors, Flash Memory Summit. Santa Clara, CA.

https://www.flashmemorysummit.com/English/Collaterals/Proceedings/2017/20170808_FT12_Heinrich.pdf

• SP Thought Leadership Team. (2015, November). Global cloud index (2014-2019): 2015 update. Cisco Knowledge Network (CKN) Session. Cisco. https://www.cisco.com/c/dam/m/en_us/service-

provider/ciscoknowledgenetwork/files/547_11_10-15-DocumentsCisco_GCI_Deck_2014-2019_for_CKN__10NOV2015_.pdf

• Zhang, Y., Huang, T., & Bompard, E. F. (2018, August 13). Big data analytics in smart grids: A review. Energy Informatics, 1(8). https://doi.org/10.1186/s42162-018-0007-5

Chart:

• Cisco. (2020, March 9). Cisco annual internet report (2018–2023) [White paper]. https://www.cisco.com/c/en/us/solutions/collateral/executive-perspectives/annual-internet-report/white-paper-c11-741490.html

• Ericsson. (2021, October). Ericsson mobility report: Q2 2021 update. https://www.ericsson.com/4a4cd9/assets/local/reports-papers/mobility-report/documents/2021/emr-q2-2021-update.pdf

• ITU. (2019). Statistics. https://www.itu.int/en/ITU-D/Statistics/Pages/stat/default.aspx

• Rydning, J. (2021, July). Worldwide global DataSphere and global StorageSphere structured and unstructured data forecast, 2021-2025. Doc # US47998321. IDC. Retrieved from IDC database.

DNA Storage

• Reinsel, D., Gantz, J., & Rydning, J. (2018, November). The digitization of the world: From edge to core. IDC White Paper - #US44413318. https://www.seagate.com/files/www-content/our-

story/trends/files/idc-seagate-dataage-whitepaper.pdf
