AI is rapidly becoming a cornerstone in various industries including manufacturing, finance, healthcare, logistics, and retail. Annual growth rate until 2032: 24%1
Innovation has escaped the boundaries of the technology sector. What began with AI and cloud computing is now reshaping every sector i.e. manufacturing floors, hospital systems, energy grids, and retail supply chains. Every company now competes in a digital economy — and the gap between those who lead that transformation and those who lag it is widening. The opportunity for investors lies in knowing the difference.
Innovation is the Economy
Innovation is reshaping the global economy. AI, automation and digital infrastructure have moved beyond the technology sector to become engines of value creation across every industry.
From health care and industrials to finance and energy, companies are not just adopting technology; they are being transformed by it.
*Forecast estimates. There is no assurance that any projection, estimate or forecast will be realised.
Robust innovation pipeline
AI-driven super-cycle creates broad opportunity set for investors.
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These statements reflect the analysis and opinions of the investment team and may differ from the opinions of other portfolio managers, investment teams or platforms at Franklin Templeton. Because market and economic conditions are subject to rapid change, the analysis and opinions provided may change without notice.
Featured funds
Now it’s the time to invest in the innovators shaping tomorrow. Franklin Templeton offers a broad selection of strategies that seek opportunities across disruptive technologies, from AI to biotechnology.
Franklin Technology Fund
Focuses on capitalising on global technological innovation by investing in leading companies driving digital transformation. The Fund offers exposure to a wide range of tech sectors, from AI to cloud computing, with an emphasis on long-term growth opportunities in cutting-edge technology.
Benchmark Fund of the Year Awards 2024 Singapore
House Awards – Technology Sector Equity (Best in Class)2
Franklin U.S. Opportunities Fund
Targeting high-potential U.S. companies, the Fund invests across multiple sectors, from healthcare to consumer goods, with a focus on growth-oriented businesses. Its diversified approach aims to balance risk while capturing market opportunities in established and emerging U.S. firms.
Franklin Biotechnology Discovery Fund
Focuses on leading US biotech innovators, the Fund aims to capture the sector’s long-term growth potential. With accelerating medical advances, increasing Mergers & Acquisitions activities, and strong long-term demand, it offers exposure to the next generation of biotechnology leaders.
Why Franklin Templeton?
Location: Our local presence in the heart of Silicon Valley provides early access to market developments, enabling swift decisions ahead of competitors.
Expertise: We recognise both industry leaders and emerging innovators overlooked by the market, capitalising on untapped growth potential
Access: As part of the Franklin Equity Group, our technology analysts leverage insights from across the group, strengthening decision-making
Dedication: Team of tech and equity investment experts and long-tenured fund managers with a front row seat to emerging themes and disruption
Exploring the next big wave in technology
Identify trends and turning innovation into opportunity
FAQs
Investing in the innovation theme
Technology is no longer a single sector — it is the foundation of the modern economy. AI, cloud computing, cybersecurity, and semiconductors are driving productivity gains and value creation across every industry. Forecasts suggest the global AI market alone could exceed US$1 trillion by 2032, growing at approximately 24% annually. For long-term investors, the technology sector offers exposure to structural growth themes that continue to reshape how businesses operate and how consumers live.
Six themes stand out: Digital Labour (AI agents transforming software development and knowledge work), Agentic Commerce (AI-driven online shopping), Stablecoins (accelerating adoption in payments and asset settlement), Autonomous Driving (expanding regulatory approvals and fleet deployment), Quantum Computing (breakthroughs in materials science, drug discovery, and encryption), and Robotics (more capable hardware powered by AI). Together, these represent a multi-year AI-driven super-cycle.
The technology sector can experience periods of higher volatility, particularly around interest rate expectations or earnings cycles. Investing in a single sector strategy can potentially lead to higher concentration risks. Active management and disciplined stock selection to identify companies with sustainable competitive advantages is key for investors seeking to invest in a strategy with the innovation theme.
The U.S. is the global centre of innovation, home to many leading technology, biotech, and growth companies, supported by deep capital markets and strong research and development investment and experience. However, we are seeing innovation that happens globally nowadays — with important contributors in Europe (semiconductors, healthcare) and Asia (robotics, e-commerce). A well-constructed innovation strategy typically has significant U.S. exposure while selectively investing in global innovators.
Biotechnology is entering a new era driven by three powerful tailwinds: accelerating medical advances (including AI-enabled drug discovery and gene therapy), increasing M&A activity as large pharmaceutical companies acquire innovation to refill their pipelines, and strong long-term demand from ageing populations and unmet medical needs. These factors combined support the sector's long-term growth potential.
AI is compressing drug discovery timelines, improving the accuracy of clinical trial design, and enabling breakthroughs in areas such as protein structure prediction and personalised medicine. Biotech companies that harness AI effectively can bring therapies to market faster and more cost-effectively, creating meaningful competitive advantages.