What is “Deep Tech”?
"Deep Tech" companies pose solutions to problems in fields of all kinds.
The digital age and the Internet have changed the way we communicate, inform, and organize ourselves. It has also affected the way a business starts. Anyone with little capital can create a startup because of new technology.
Companies using “Deep Tech”
The majority of companies use technology to market traditional products or services. However, companies are recently applying “Deep Tech” to develop technological and scientific breakthroughs to market their products and services. This term was coined by Swati Chaturvedi in 2014. It refers to how companies are founded on a scientific discovery or genuine technological innovation. In addition, it is set out to improve the world. “Deep Tech” companies pose solutions to problems in fields of all kinds. It uses resources such as “Big Data”, Artificial Intelligence, or “Deep Learning” with a scientific approach. For example, some of them are trying to provide answers to major societal challenges. For instance, climate change, energy generation, or the treatment of diseases.
In addition, “Deep Tech” represents an attractive investment opportunity. At first, it did not attract the interest of large investors. This is due to the extended time they usually need to obtain returns. However, they have become one of the most solid investment alternatives. In the last decade, these types of startups have grown in interest from venture capital funds (i.e. Collective Investment Institutions invest in companies in the early stages with high growth potential). According to the American fund Draper Cygnus, from 10% to 25% and total valuations of 468 billion dollars worldwide. Over the last decade, “Deep Tech” startups such as Tesla, Moderna, and OpenAI have generated significant value for their shareholders.
Technology Over Time
History has proven that the emergence of technologies improves living conditions. In particular, the steam engine simplified how people moved more than two centuries ago. Another more recent innovation was the development of smartphones, which made communication easier. It is estimated that “Deep Tech” will have an unprecedented economic impact. Why? Due to the convergence of different disruptive technologies over time. Ark Invest‘s graph shows the dimensions of opportunity that await mankind (The steam engine represented an annual increase in GDP of 0.3%, while AI is expected to increase global GDP by 1% per year in the coming decades).
If we focus on the Development Goals set by the UN, “Deep Tech” has a lot to contribute. It is likely that achievements will depend on new technological advances developed by startups. Innovation in “Deep Tech” will significantly reduce the cost of basic needs and minimize environmental impact.
Examples of Innovation
Some examples of innovation that facilitate access to basic needs and environmental regeneration are:
– Chatbots such as ChatGPT will increasingly enable anyone to have the ability to access services comparable to lawyers, programmers, doctors, etc.
– Mega constellations of satellites in low Earth orbit, such as SpaceX’s Starlink. It will facilitate high-speed connectivity to any point on the planet, reducing the digital gap and making teleworking possible in many professions. In addition, through earth observation, they enable precise monitoring of emissions worldwide and (real-time) control of changes in ecosystems (deforestation, fires, pollution leakage, etc.).
– AI education platforms, such as Letrus and Egg, enable accessible literacy education and the acquisition of programming and English language skills for millions of people at a low cost.
– Advanced technologies applied for drug development (mRNA vaccines, cell therapies, chips, etc.) make vaccines and treatments for cancer, dementia, flu, etc. accessible and at a lower cost.
– Satellite imagery, drones, and AI algorithms can help predict natural disasters and reduce their impact.
– New seeds, molecular farming of animal proteins, precision fermentation, and cultured meat can significantly reduce the price of major food products. In addition, the use of these resources will also make it possible to regenerate fish stocks, reduce emissions, and free up agricultural land for reforestation.
– Sustainable, renewable, and naturally sourced materials can replace petrochemicals.
– New materials, 3D printing, and AI-generated designs can make housing more accessible and at a lower cost. An example of this is the homes printed by Icon in Mexico.
– Technologies such as low-cost solar panels and batteries, compact nuclear fusion reactors, and deep geothermal energy can enable abundant clean energy without emissions.
– By 2030, low-cost electric vehicles could reach more than 80% of global sales. This will reduce oil consumption by more than 30% and drastically reduce emissions generated by transportation.
– By 2040, Ocean plastic capture systems (such as those being developed by Ocean Cleanup) intend to eliminate 90% of the 269,000 tons of floating plastic with the use of satellites, remote sensing, computer modeling, and robotic systems.
The Future of “Deep Tech”
Evidently, the applications of technology based on providing solutions to problems of global magnitude are manifold. However, “Deep Tech” is not free from the ethical dilemma that every technological advancement throughout history has presented. For instance, the invention of the arrow facilitated hunting, it could also be used as an instrument of war. Similarly, humanity must be vigilant with “Deep Tech” innovations and focus on using them to foster modern, prosperous, inclusive, and sustainable economies.
Peña, I. and Jenik, M. (2023). Deep Tech. The New Wave. Available in:
https://publications.iadb.org/publications/english/viewer/Deep-Tech-The-New-Wave.pdf