Last week I attended the biennial Electronica in Munich, a leading exhibition for cutting-edge technology. This is where companies go to buy the machines and equipment that later turn into products or parts of products that end up at the CES (the Consumer Electronics Show) in Las Vegas. I also attended the last exhibition in 2016 and much has changed in the last two years.
The novelty of drones has worn-off and we are now talking about what exactly they can do to help manufacturers. The autonomous drone has taken-off and is taking its rightful place in the industry doing the heavy lifting (literally and figuratively) in all aspects of production. Three-dimensional printing has advanced so much that a race car made completely of 3D printed parts were on display at this year's exhibition.
Perhaps the most interesting aspect of the exhibition was the presence of China throughout. While Chinese companies have been heavily investing in tech companies and the ability to produce high-tech components for 15 years now, the aggressive government-funded marketing of these companies has taken on proportions I have never seen before. In every hall and in every category Chinese companies were in a specially marked "China Pavilion" which points to government-subsidized participation at these exhibitions. Gone are the days of low-quality, low-value-added products coming out of China. Some of the latest and leading cutting-edge technology took its place in the China Pavilion at this year's Electronica. This heavy investment in research and development (R&D) by the Chinese will undoubtedly yield dividends for many decades to come, cementing its place as the leading economic powerhouse going into the 2020s.
One product category that appears to have blown up is that of the autonomous or self-driving car. Such vehicles need many high-tech components, including cameras, sensors, and powerful onboard computers. These computers need to have super-fast processing speed; the ability to relay, process, and respond to changes in traffic under 0.05 seconds or the vehicles will be unable to navigate on the roads.
This has spawned a new industry entirely, one that will have implications for the greater world of tech. Self-driving cars are here and they will only continue to grow. Within a decade, the vast majority of cars will feature a self-driving feature.
Electronica was eye-opening in its ability to offer a glimpse of what the future will offer. In short, the future is autonomous and it is made in China. Not because of cheap Chinese labor but because of government spending on R&D.
On Tuesday, U.S. President Trump made an interesting remark I wanted to make sure I commented on. He essentially said that without a Saudi-U.S. alliance, oil would be $150 a barrel and that that would most benefit Russia. Trump implied that even if Saudi Arabia and Crown Prince Mohammed bin Salman knew about or directed the killing of Jamal Khashoggi, it was too important of an alliance to turn their back on. Trump called it a "U.S. first" strategy.
While Trump is correct in that the Saudi alliance is undoubtedly important for the U.S., but it has become the largest producer of oil globally and thus a spike in oil prices would benefit the U.S. as much as it would Russia, a country with a gross domestic product (GDP) less than 1/10th of that of the U.S.
Trump's ability to ignore what appears to be the murder of an innocent journalist is troubling, to say the least, and the implicit blanket pardon of those responsible will cost the U.S. dearly in terms of political capital with the rest of the world. A loss, perhaps, that will take many years to recover from.
Finally, the Crypto crash I've been warning about over the last year appears to have finally come to fruition. The major cryptocurrencies are all down over 90 percent from their peak (as predicted). Bitcoin and Ripple are the only major hold-outs but the writing is very much on the wall. I will revisit this topic in my end of the year column and we will see how close we get to my prediction.