charting disruption
TRANSCRIPT
Outlook 2022
Charting Disruption
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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
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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.
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in AUM across
more than 80
ETF strategies1
For more than a decade, our mission has been
empowering investors with unexplored and
intelligent solutions.
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Diverse team of
more than 100
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professionals
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ETF shareholders
across more than
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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
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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
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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
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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
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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.
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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
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Robotics &
Artificial Intelligence
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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.
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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*
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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
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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
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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.
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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.
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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
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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
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$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
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*Forecast
18© Global X Management Company LLC
All numbers are approximate
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
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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
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19© Global X Management Company LLC
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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
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
20© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – Robotics & Artificial Intelligence
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:
• 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
• 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
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
21© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – Robotics & Artificial Intelligence
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
• 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
• 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
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
22© Global X Management Company LLC
All numbers are approximate
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.
23© Global X Management Company LLC
All numbers are approximate
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.
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
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All numbers are approximate
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.
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
25© Global X Management Company LLC
All numbers are approximate
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
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
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
26© Global X Management Company LLC
All numbers are approximate
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
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
27© Global X Management Company LLC
All numbers are approximate
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.
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
28© Global X Management Company LLC
All numbers are approximate
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
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
Note: * Estimates
29© Global X Management Company LLC
All numbers are approximate
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.
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
30© Global X Management Company LLC
All numbers are approximate
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
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
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
31© Global X Management Company LLC
All numbers are approximate
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
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
32© Global X Management Company LLC
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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
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
Sources: Chart: Belous, 2021; Bostock, 2019; Bauer, 2021
33© Global X Management Company LLC
All numbers are approximate
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
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
34© Global X Management Company LLC
All numbers are approximate
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
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
35© Global X Management Company LLC
All numbers are approximate
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
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
36© Global X Management Company LLC
All numbers are approximate
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
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
37© Global X Management Company LLC
All numbers are approximate
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.
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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.
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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.
• Key Products/Services
‒ Online Store: Wholesale marketplace with online stores and
a facilitated point of sale system
‒ Marketing: B2C marketing through email, business chat, and
Facebook ads
• Recent News/Events
‒ 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.
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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
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
38© Global X Management Company LLC
All numbers are approximate
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
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
39© Global X Management Company LLC
All numbers are approximate
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.
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
40© Global X Management Company LLC
All numbers are approximate
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
41© Global X Management Company LLC
All numbers are approximate
Decoding the Crypto Landscape
There are over 14,000 cryptocurrencies that leverage blockchain technology and may offer unique utility to owners.1
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
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
42© Global X Management Company LLC
All numbers are approximate
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
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
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.
43© Global X Management Company LLC
All numbers are approximate
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
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
Exchanges & Transactions
44© Global X Management Company LLC
All numbers are approximate
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
Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21
EQUIPMENT MANUFACTURERS
-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
HOSTING SERVICES
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
45© Global X Management Company LLC
All numbers are approximate
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
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
46© Global X Management Company LLC
All numbers are approximate
$-
$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.
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47© Global X Management Company LLC
All numbers are approximate 47
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.
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
48© Global X Management Company LLC
All numbers are approximate48
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.
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
49© Global X Management Company LLC
All numbers are approximate49
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
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50© Global X Management Company LLC
All numbers are approximate
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
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
Source: Global X, 2021
51© Global X Management Company LLC
All numbers are approximate
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
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Key Drivers of Adoption
Innovators Early Adopters Early Majority Late Majority Laggards
$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.
52© Global X Management Company LLC
All numbers are approximate
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
• Key Products/Services
‒ Hardin Data Center: Bitcoin mining data center in Hardin, Montana
with capacity to deploy up to 30,000 S19 Pro Miners
• Recent News/Events
‒ 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
• Key Products/Services
‒ Exchange: Integrated solution for secure cryptocurrency
transactions/asset management (“Prime” for institutional investors)
‒ Commerce: Custom checkout procedure integrated with Woo
Commerce and Shopify
• Recent News/Events
‒ 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
• Key Products/Services
‒ 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
• Recent News/Events
‒ 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
• Key Products/Services
‒ Data Center: Offer HPC applications for bitcoin mining, blockchain,
artificial intelligence, and big data analytics
‒ Hardware: High-performance computing hardware implementing AI
• Recent News/Events
‒ 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
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
There is no guarantee that companies mentioned remain in or out of the fund.
53© Global X Management Company LLC
All numbers are approximate
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.
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54© Global X Management Company LLC
All numbers are approximate
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
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55© Global X Management Company LLC
All numbers are approximate
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.
56© Global X Management Company LLC
All numbers are approximate
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
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57© Global X Management Company LLC
All numbers are approximate
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
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58© Global X Management Company LLC
All numbers are approximate
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
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
59© Global X Management Company LLC
All numbers are approximate
AI Speeds Scientific DiscoveryAmy Webb
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
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.
60© Global X Management Company LLC
All numbers are approximate
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
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
The data presented here is intended to rapidly disseminate analysis of important pathogens. Visualizations licensed under CC-BY.
61© Global X Management Company LLC
All numbers are approximate
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
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
62© Global X Management Company LLC
All numbers are approximate
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 (%)
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63© Global X Management Company LLC
All numbers are approximate63
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.
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
64© Global X Management Company LLC
All numbers are approximate
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.
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
65© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – The Future of Health Care
Genomics Is Ready to Revolutionize Health Care
Table:
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• 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:
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• 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.
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• 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
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66© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – The Future of Health Care
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
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All numbers are approximate
Appendix: Sources – The Future of Health Care
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
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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.
69© Global X Management Company LLC
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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
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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
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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
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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.
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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
TraditionalOpen Farm
Green VerticalFarming Facility
118 kL
6 kL
TraditionalOpen Farm
Green VerticalFarming Facility
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
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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%
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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
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76© Global X Management Company LLC
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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*
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*Forecast
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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
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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
• 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/
• 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
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Appendix: Sources – Food + Water
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
• 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/
• 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/
• 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/
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Appendix: Sources – Food + Water
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/
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Climate Change
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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.
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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
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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
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Geo-Politics & Climate TurmoilRamez Naam
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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.
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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
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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
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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
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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.
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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
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*Forecast
Note: EUR/kg at conversion rate of 1 EUR to 1.19 USD, Base year = 2020.
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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;
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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.
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
92© Global X Management Company LLC
All numbers are approximate
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:
• International Energy Agency. (2021, October). World energy outlook 2021. https://iea.blob.core.windows.net/assets/888004cf-1a38-4716-9e0c-3b0e3fdbf609/WorldEnergyOutlook2021.pdf
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.
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
93© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – Climate Change
Advancements in Wind Power and Solar PV Are Leading the Shift to Renewables
Text:
• Taylor, M., Ralon, P., Al-Zoghoul, Epp, B., & Jochum, M. (2021, June). Renewable power generation costs in 2020. International Renewable Energy Agency. Abu Dhabi.
Charts:
• Taylor, M., Ralon, P., Al-Zoghoul, Epp, B., & Jochum, M. (2021, June). Renewable power generation costs in 2020. International Renewable Energy Agency. Abu Dhabi.
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.
https://doi.org/10.1002/pip.3444
• 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.
https://doi.org/10.1002/pip.389
• 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.
https://doi.org/10.1002/pip.574
• 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.
https://doi.org/10.1002/pip.686
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
94© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – Climate Change
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.
https://doi.org/10.1002/pip.2267
• 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.
https://doi.org/10.1002/pip.2452
• 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.
https://doi.org/10.1002/pip.2525
• 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.
https://doi.org/10.1002/pip.2573
• 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
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
95© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – Climate Change
Electrification and Energy Storage Are Essential to Expanding Renewables’ Reach
• International Energy Agency. (2021, October). World energy outlook 2021. https://iea.blob.core.windows.net/assets/888004cf-1a38-4716-9e0c-3b0e3fdbf609/WorldEnergyOutlook2021.pdf
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
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
96© Global X Management Company LLC
All numbers are approximate
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
97© Global X Management Company LLC
All numbers are approximate
The Unstoppable Road to Electrification
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
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
98© Global X Management Company LLC
All numbers are approximate
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
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
99© Global X Management Company LLC
All numbers are approximate
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
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
Battery Tech: Lithium-Iron to Drive Mass Market Adoption
* Global X Estimates.
100© Global X Management Company LLC
All numbers are approximate
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
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
EV Charging Infrastructure Could See a Major Boost From Infrastructure Bill
101© Global X Management Company LLC
All numbers are approximate
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
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
Quantifying EV Ambitions: Traditional Auto OEM EV Commitment and Readiness Index
102© Global X Management Company LLC
All numbers are approximate
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
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
* Estimates
103© Global X Management Company LLC
All numbers are approximate
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?
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
Source: Global X, 2021
104© Global X Management Company LLC
All numbers are approximate
Electrified Mobility to Grow >10x Over the Next Decade
Innovators Early Adopters Early Majority Late Majority Laggards
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.
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
105© Global X Management Company LLC
All numbers are approximate
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]
• Rho Motion. (2021, October). October 2021 major market EV sales. https://rhomotion.com/
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/
• Rho Motion. (2021, October). October 2021 major market EV sales. https://rhomotion.com/
• 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]
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
106© Global X Management Company LLC
All numbers are approximate
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
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
107© Global X Management Company LLC
All numbers are approximate
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.
108© Global X Management Company LLC
All numbers are approximate
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
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
109© Global X Management Company LLC
All numbers are approximate
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
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
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
110© Global X Management Company LLC
All numbers are approximate
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
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
111© Global X Management Company LLC
All numbers are approximate
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
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
112© Global X Management Company LLC
All numbers are approximate
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.
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113© Global X Management Company LLC
All numbers are approximate
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
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
114© Global X Management Company LLC
All numbers are approximate
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
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
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
115© Global X Management Company LLC
All numbers are approximate
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
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116© Global X Management Company LLC
All numbers are approximate
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
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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
117© Global X Management Company LLC
All numbers are approximate
DNA StorageAmy Webb
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
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.
118© Global X Management Company LLC
All numbers are approximate
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. (2020, December). 2021 report card for America’s infrastructure. https://infrastructurereportcard.org/
• 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/
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119© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – 21st Century Infrastructure
Do Infrastructure Needs Align With Sentiment?
Text:
• American Society of Civil Engineers. (2020, December). 2021 report card for America’s infrastructure. https://infrastructurereportcard.org/
Charts:
• American Society of Civil Engineers. (2020, December). 2021 report card for America’s infrastructure. https://infrastructurereportcard.org/
• 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
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120© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – 21st Century Infrastructure
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
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121© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – 21st Century Infrastructure
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
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122© Global X Management Company LLC
All numbers are approximate
Appendix: Sources – 21st Century Infrastructure
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
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