3 Sectors that Will be Dead by 2040

The industrial revolution transformed economies around the world.

With the introduction of the factories, agrarian-based societies changed to manufacturing-based ones.

While this made life easier, it also rendered artisans obsolete.

The digital revolution has done the same in the past few decades. Apart from invigorating change, it has displaced several jobs central to life in the 21st century.

The jobs of ticket agents, bank tellers, typists, and several other production-line jobs are now gone. But it doesn't end there.

This new age of technological advancement will render a few more industries obsolete.

Here are three that are likely to bear the brunt.

#1. Conventional fuel-based power plants

The shift towards cleaner energy sources poses a serious threat to the existence of coal-based power plants.

At present, power plants across the world run on conventional fuel i.e. coal. Coal is considered as dirty energy as it releases high levels of carbon dioxide. It is also the second-largest contributor to greenhouse gas emissions in the world.

To curb the generation of coal-based power plants the government of India has introduced several policies.

Reforms in this sector have been ongoing for over a decade now. Soon the total capacity addition from cleaner energy sources is likely to outstrip coal-based power.

The total installed capacity from cleaner energy sources such as solar energy, wind energy, wind, waste heat recovery, etc. has nearly doubled in the last five years. It has risen steeply from 76.4 GW in March 2014 to 151.4 GW in December 2021.

And now, with the government's ambitious plans to ramp up capacity to 500 GW by 2030, there is a good chance that coal-based power plants will cease to exist.

However, this does not necessarily spell doom for companies in the coal-based energy sector.

Companies like Tata Power are gearing up by transforming their businesses in the emergence of the new cleaner normal. But the clean energy movement does jeopardise coal-mining businesses.

While the effect won't be felt in the near term it is likely to cause severe long-term damage.

#2. Robo financial advisors for the masses

With far more effective, comprehensive, accessible, and free from human biases, financial robo advisors are expected to grow briskly, leaving conventional financial advisory to die a slow death.

Why, may you ask?

Robo-advisors are highly effective and proficient financial advisors.

They use algorithms and crunch past data to predict investor preferences, risks, and goals. They also stand out via their intuitive investing experience and fully digital online processes.

Much like your human advisors, they require your psychographic and demographic data to model a portfolio.

This techno-wizard is not a novel idea. Robo-advisors became the buzzword of the wealth management industry back in 2008. However, traditional financial advisories are only now launching robo-advisors as part of their solution to portfolio management.

Some of the top financial advisors and brokers such as Angel Broking, Sharekhan, and 5 Paisa have already made headway, launching their own robo advisors.

#3. Internal combustion engine-based vehicles (ICEV)

Another environmental hazard are internal combustion engine-based vehicles, which depend on refined oil (petrol and diesel).

As this sector accounts for nearly one-fifth of the total global CO2 emissions, the global automotive industry is shifting towards cleaner modes of transport such as electric vehicles (EVs).

This imminent transition makes EVs a vital component of the transportation landscape and signals a bumpy road ahead for the ICEV sector.

According to the International Monetary Fund, more than 90% of all passenger vehicles in the U.S, Canada, Europe, and other rich countries could switch to EVs by 2040.

On the domestic front, the Indian government aims to go all EV by 2030.

The Indian government has already announced a spate of accommodative policies to propel the shift to EVs.

From authorising 100% FDI in the sector to subsidies and policies favoring deep discounts for Indian-made EVs, the government has left no stone unturned.

To conclude

A glance at recent history provides us with all the proof we need. How many of us can remember the top listed companies in the 1990s?

Even the group of companies that are part of the BSE Sensex are shuffled regularly, further validating the point that change is imminent.

But over the next few years, limitless access to data coupled with incessant environmental concerns can usher in a new age of disruptive technology.

From 3D printed homes to self-driving cars, the possibilities for innovation seem endless. Thus you should ask yourself how many more sectors can die out by 2040?

Your long-term investing success may depend on it.