Insights
Where Innovation Is Overdue
The industries that most need innovation are rarely the ones that get talked about. Here is where I think it goes next, and who thrives when it does.
When people talk about innovation, they usually mean something new: a new technology, a new product, a company that did not exist a few years ago. I have come to see it differently. In most industries, the largest gains come from finally doing the ordinary things well, in a place where they were never done. The invention is often already out there. What is missing is someone to bring it where it is needed.
The sectors that need it most are the old, unglamorous ones that everyone drives past. The clinic that still runs on a fax machine and a paper calendar. The construction firm managing a million-dollar job on a phone and a notebook. The manufacturer whose systems were installed before its youngest employee was born. These businesses are not short on demand or skill. They are short on the operating backbone that larger companies take for granted.
They were skipped for a simple reason. They are hard, physical, regulated, and unfashionable. The people who build technology would rather build it for other people who build technology. So the money and the talent flowed to the industries that were already furthest ahead, and the ones that carry the real economy, the ones that feed us, house us, treat us, and move our goods, were left to run on tools from another era.
If I had to name where the need is greatest, I would start with healthcare delivery, where the people doing the care are buried in administration. Then the trades and construction, where the work is skilled and the back office is chaos. Local service businesses of every kind, the clinics and shops and restaurants that are excellent at their craft and lost in everything around it. Small and mid-sized manufacturing. Agriculture. Logistics. And underneath all of them, the parts of insurance, lending, and government that still move at the speed of paper.
So which of these will actually thrive? Needing innovation and getting it are different things. The winners will be decided by two questions: whether the demand is genuinely there, and whether the economics reward the one who does the work.
On that test, a few stand out. Healthcare will thrive because the demand is relentless and the waste is enormous, and even a small improvement in how a practice runs is worth a great deal. Energy and power will thrive because everything else now depends on them, from reshored factories to the data centres behind AI. Anything that helps a small business run like a large one will thrive, because there are millions of them and almost none have what they need. And the least obvious winner is the layer beneath all of it, the companies that supply the operating backbone to the industries that never had one. That is the quietest fortune of the next decade, and it is the one I would bet on.
I would be careful about the sectors that already look innovative. They are crowded, expensive, and much of the easy work in them is done. The larger returns sit with whoever brings the first real tool to an industry that has none. That is a very different game from competing in a market that already has a thousand.
AI changes this, though not in the way the headlines suggest. General, horizontal AI is a crowded and brutal fight. The real value will be captured in narrow, vertical uses, applying it to one industry's actual problems, by people who understand that industry from the inside. It will go to whoever knows exactly which unglamorous task, in which overlooked business, is worth handing to a machine.
This is why we work across the whole economy, in the ordinary industries as much as the exciting ones. The opportunity of the next decade is spread through the businesses that hold up daily life, waiting for someone to bring them what the largest companies have always had. The people who do that work, and the ones who back them, will own more of the coming economy than anyone expects. That is the bet the firm is built on.