The Friday Five by Jefdata - AgTech

1. Autonomous Driving: A Roadmap for the Future of Pharma?

2. The Right to Be Forgotten – An American Data Debate

3. High-Tech Megacities or the Niche Middle?

4. Farmers and Investors Use Ag Data to Play Climate Swings

5. Efficient Filtering: Empowering the Practitioner’s Bridge

QUOTE OF THE WEEK

“This is only a foretaste of what is to come and only the shadow of what is going to be”

— Alan Turing, British Scientist and “Father of Modern Computing” (1912-1954), on the topic of computable numbers. It was announced this week that Turing will be featured on Britain’s new £50 note.

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1. Autonomous Driving: A Roadmap for the Future of Pharma?

AI Drug Hunters Could Give Big Pharma a Run for Its Money – Bloomberg - 6 Minute Read

Rich's Thoughts: Big tech has been approaching the healthcare arena for years, and it is not novel to hypothesize each FAANG company cornering a different aspect tomorrow’s healthcare market. But where are we right now? 3+ years ago, Apple, Google, Facebook and Amazon started making experimental investments directly with healthcare startups or building technologies internally that address efficiency issues in the healthcare sector broadly. In December 2018, Alphabet’s DeepMind beat seasoned human biologists in predicting the shapes of proteins.

“Sorting out the structure of proteins in order to find ways for medicines to attack disease is an enormously complex problem. There are more possible protein shapes than there are atoms in the universe, making prediction a herculean undertaking of computation. For a quarter century, computational biologists have labored to devise software equal to the task.”

A fundamental question facing investors is how technology and healthcare companies are going to partner, merge, or work in parallel over the coming decades. According to Pitchbook data, in 2018, venture capitalists invested $1.08 Billion into AI and machine-learning startups focused on drug discovery, up from $237 Million in 2017, and investments have already eclipsed $700 Million in 2019 YTD.

In the autonomous vehicle and healthcare industries, both the industry incumbents (Driving: OEMs; Healthcare: BioPharma) and the encroaching technology companies are attempting to innovate within their respective strengths. Recursion Pharmaceuticals CEO Chris Gibson believes that 97% of human biology is too complex for humans to understand. As we journey through experimentation of treatments for ~7,000 known rare diseases, healthcare giants, tech giants, and healthtech startups alike will have opportunities to attack different areas of innovation. How should investors approach this congruently growing and consolidating market?

According to the Novartis Foundation, there is a digital path to health for all. And this week, Elon Musk’s Neuralink unveiled a major step toward a therapeutic device which can connect human brains and machines with precision to treat movement disorders, spinal-cord injuries, and blindness (a space where Facebook Inc is also looking to develop its own applications).

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2. The Right to Be Forgotten – An American Data Debate

Pete Buttigieg says Americans should have the right to hide personal details from the internet – Vox - 2 Minute Read or 47 Minute Podcast

Rich's Thoughts: U.S. politicians have outlined different approaches to centralize the national framework of data sharing and privacy policy. This week, 2020 Presidential hopeful Pete Buttigieg called for a national debate regarding the “the right to be forgotten,” which was embedded into Europe’s General Data Protection Regulation (GDPR) in Article 17 as “the right to erasure”. The “right to be forgotten,” in the framework of GDPR, means individuals can ask platforms to stop disseminating, halt third-party access to, or delete their data entirely.

Some of the issues to date with this aspect of GDPR are the enforceability and nuanced situations that would benefit from keeping all data available for law enforcement and healthcare services. In the coming months and years, Buttigieg will most likely not be the only one to call this debate to the forefront of American minds. Tech companies (Apple, Amazon, Alphabet, and Facebook) were questioned by U.S. Congress this week about a range of political and policy issues, and Nancy Pelosi endorsed Silicon Valley-based Congressman Ro Khanna’s “Internet Bill of Rights” shown below.

Source: Ro Khanna (D – California)

The United States is considered by many to be “behind” other democratic constituencies in setting data privacy regulation and legislation, but, ironically, like the platforms and technologies it is looking to regulate, it may benefit from a second-mover advantage in observing the ebbs and flows of GDPR in the European Union.

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3. High-Tech Megacities or the Niche Middle?

The new cities to watch – Axios – 3 Minute Read

Axios/SurveyMonkey Poll: Smart Cities – Axios – 4 Minute Read

Rich's Thoughts: Silicon Valley and New York City have long been the two major hubs for technical talent. Current trends suggest the next iteration of technical talent migration is up for debate. Over the past few years, we have seen large companies and startups alike look to “niche” and “mixed middle” U.S. cities such as Austin, Portland, Pittsburgh, and Akron to differentiate talent, increase retention, and decrease real estate costs outside of their main headquarters. As video conference, interoffice text communication, and remote login technologies continue to evolve into augmented reality offices and meeting settings, companies will be able to continue to develop outside of large cities.

However, megacities are on the rise as well. Last month, we got our first taste of a “smart city” when Sidewalk Labs unveiled its plans for the Toronto waterfront. While the plans were met with some hostility (surrounding data privacy), it hasn’t stopped New York, Seattle, and Oakland from setting parameters around prospective “smart city” projects which could increase efficiencies (traffic, crime, waste, etc.) for the cities and allow them to grow population drastically.

Will megacities and the “niche middle” rise in parallel or will one grow at the expense of the other?

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4. Farmers and Investors Use Ag Data to Play Climate Swings

Land O’Lakes CEO: Big Data Is Helping Farmers Deal With Climate Swings – Fortune - 5 Minute Read

Rich's Thoughts: Last week, the Jefdata team within Equity Research introduced alternative weather data into its technical analysis for the first time. Low commodity prices and volatile climate issues have made it vital for farmers to seek increased accuracy of upcoming weather through the planting and harvest seasons. According to Land O’Lakes CEO Beth Ford, the advantages of using compilations of predictive models, satellite imagery, and drone information have never been more important in the U.S. than they have been this year. How can this data be used by financial investors?

On Tuesday, Ford was joined on stage (at the Fortune Brainstorm Tech Conference in Aspen, Colorado) by Gro Intelligence CEO Sara Menker to discuss the broad use cases of agricultural data platforms:

Video Source: YouTube/Fortune

Earlier this year, Menker spent time with Rich Carbone and discussed how Gro Intelligence is enabling investors to use alternative data to make predictions for agriculture in 2019 and beyond.

Video Source: Vimeo/BattleFin

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5. Efficient Filtering: Empowering the Practitioner’s Bridge

Hedge Funds are getting swamped by alternative data. Some want to fast-track how they buy it and focus back on trades. – Business Insider Prime (Subscription) – 5 Minute Read

Rich's Thoughts: The Jefdata team believes this article, and rationale within it, is an important step in the evolution of data usage within investment management. Over the past three to five years, there has been a widespread focus on discovering new types of data and data sources, building data directories, and highlighting quick wins to end investors to accentuate the importance of expanding the investment mosaic to include alternative data analysis. Now, the bar has been set at a point where data teams are in such high demand internally, AND data providers have reacted to a growing financial services market. Data analysts within investment managers want to focus on providing investment ideas, not taking extended periods of time cleaning and testing data. The more influence that data analysts have within the investment mosaic, the more valuable the “Practitioner’s Bridge” between the data teams and investment teams becomes. Dataset, data type, and data geography discovery is as important as ever, but efficiency is king.