It is hard to find a business in today’s world that does not depend on technology for its survival. Even traditional non-tech businesses, such as farming, now depend on the tech sector for many parts of their operation. The tech sector is the backbone of both large and small businesses around the world. It is not surprising that if you are looking for a good investment, the tech sector is still the place to go for some great deals. Now let’s examine some of the different facets of the tech sector that are set for growth in 2018.
Back to Basics
Within the tech sector, there are major divisions that always make good investments because the rest of the sector depends on them. Some places to look for good investments are:
- Hardware, without it nothing else happens, but this sector does not get as much attention as it did in the past. This sector has become segmented further into computers and peripherals, communications equipment, networking equipment, etc.
- Software is another component of this tech sector that it cannot live without. However, you have to know where to look. When evaluating software companies, look for whether their product will be for open distribution or a limited application.
- Semiconductors are an often-overlooked sector of the tech industry. You need to look companies that are breaking barriers in terms of speed, power consumption, or other innovation when looking for investment ideas.
These areas are the basics, but one thing you need to know is that they are also cyclical. For instance, when there is an economic downturn, many companies will choose to repair their old equipment, rather than replace it with new.
Follow the Innovation
A good rule of thumb when investing in the tech sector is to follow the innovation. Big technological gains also mean big gains for those who invest in them. Here are some leaders in terms of innovation.
- Data Analytics has dominated in news headlines lately. Big data is big business and companies that specialize in processing data faster and more accurately are the ones to watch for in 2018.
- Cloud computing and software as a service (SaaS) is another area where new advances are being made that offer lucrative growth opportunities.
- Cybersecurity is a subsector of the tech sector that will gain increasing attention. As companies rely more on data analytics, they will also be more vulnerable to cyber attacks. As a result, they will be required to invest in both hardware and software cybersecurity measures.
These areas are poised for growth and are a great place to look for companies that are set to dominate these subsectors. However, there is one area that until this point, has been a little-kept secret that is now ready to become one of the best tech investments for long-term growth.
3D Printing Promises Big Growth
The concept of 3D printing once only existed in the minds of science fiction writers, but then a few years ago, it becomes a reality. However, at that time it was more of a novelty. Now, this sector is all grown up and poised for big growth.
This technology was originally meant for home users who wanted to print plastic objects, but it never took off in that direction. A new innovation has been able to produce technology that can make parts out of metal. This technology will be a game changer and offers an excellent opportunity to get in on the ground level as this sector takes off.
This new technology is exciting news for parts manufacturers. 3D printers can produce parts that are lightweight, yet strong. It can also produce parts that are made according to tight tolerances. This technology also makes it possible to do shorter manufacturing runs and eliminates the need to stock parts ahead of time.
This technology also means that smaller manufacturing facilities have a chance to grow and compete with larger ones. This technology reduces product waste and allows the combination of metals that were never possible using traditional methods. These qualities make 3D printing attractive to high-tech industries such as aerospace, medical instruments, and auto manufacturers.
What happens in the tech sector is quickly disseminated throughout the rest of the economy. This will hold true for the advances in 3D printing and other sectors that we have discussed. As you can see, there are some portions of the tech sector that are poised for growth. It should not be hard to find a company that is set for outperformance if you look in this sector of the market.