Passport to Innovation
For decades, the U.S. has been a leader in many areas of new and emerging technology. However, investors may be overlooking strong areas of innovation outside the U.S., potentially making international growth companies appealing additions to U.S. dominated portfolios.
- As of July 2022, roughly 63% of the global population has internet access. Interestingly, only 7% of global users are from North America, suggesting noteworthy internet activity abroad and support for non-U.S. digital transformation companies.
- With the rise of global internet adoption, users need a way to pay for goods and services. Payments is another example where many countries have leapfrogged ahead of the U.S. when it comes to paying with a mobile device at point-of-sale (POS). According to Statista, China, Vietnam, South Korea, U.K., and India all have higher mobile POS penetration than the U.S.
- Electric vehicle (EV) penetration is another area where the U.S. isn’t in the lead. According to data from PwC, many European and Asian countries have a much greater EV battery market share than the U.S. – in some cases, more than three times higher. In fact, many of these countries have 10x the charging locations per mile of roadway. Moreover, most of the EV battery production is done outside the U.S. where countries such as China dominate in processing necessary key earth metals.
- Finally, while it is hard to generalize artificial intelligence progress among nations, the U.S. lags China and the EU/UK in terms of artificial intelligence journal citations. As a result, investors may want to consider diversifying their portfolios to take advantage of the innovation leadership in areas outside of the U.S.
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