What Are the “New Economies”?

Pathbreaking innovations are transforming the global economy, and emerging technologies are reshaping traditional industries and spawning new ones at a staggering rate. They represent the foundation of the Fourth Industrial Revolution: 21st century sectors. 

Today, we are at the beginning of a Fourth Industrial Revolution. Developments in genetics, artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology, to name just a few, are all building on and amplifying one another. This will lay the foundation for a revolution more comprehensive and all-encompassing than anything we have ever seen – World Economic Forum (WEF) report [2016]

Rapid developments in robotics, automation, and artificial intelligence—together with extreme connectedness and the availability of exponential processing power—have laid the foundation for seismic changes across all facets of our lives. The democratization of infrastructure, whether banking, computing resources, or even power generation, has lowered the barrier to entry across many industries, acting both as a catalyst for innovation and a disruptive force to incumbents.

S&P Kensho New Economy Indices

The S&P Kensho New Economy Indices dynamically capture the companies that are propelling the Fourth Industrial Revolution. The family distinguishes itself by taking a comprehensive and objective view across the many industries that are driving economic growth now, and will be in the future.

Standard industry classification schemes aren’t explicitly geared toward capturing the drivers of future economic growth, particularly the interconnectedness and fluidity that are the hallmarks of the new economy. In contrast, the S&P Kensho New Economy Indices not only identify the leading companies in each industry, they also capture the entire ecosystems supporting them, which is essential for fully understanding where the economic impact and benefits lie.

The family includes sector and subsector indices that can be used individually or as building blocks.

The Case for Indexing Thematics with the S&P Kensho New Economies

It's not easy for active funds to outperform their passive counterparts on a long-term basis—and it turns out thematic funds are no exception.

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Index Construction

The S&P Kensho New Economy indices are constructed using an entirely systematic, rules-based methodology. Leveraging Kensho’s proprietary natural language processing (NLP) platform, millions of pages of regulatory filings and other public information are analyzed to identify the companies involved in each of the new economies. Proprietary algorithms determine the extent to which each company is involved; those companies for which a new economy is a principal component of its business strategy will be overweighted in the index.
  • Scan

    Scan the universe of public companies.

  • Filter

    Filter for companies matching the new economy definition.

  • Organize

    Organize companies by impact.

Measuring Megatrends with Indices

How do the S&P Kensho New Economies track long-term transformational trends? S&P DJI’s Anu Ganti and State Street Global Advisors’ Dan Braz take a closer look at how machine learning and a unique methodology may be construed as a fusion of active/passive in a rules-based framework.

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Explore the Indices

  • New Economies Composite

    Designed to measure the performance of companies involved in the new economy sectors, including a dynamically adjusted list of companies drawn from all of the subsector indices.

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  • New Economies Select

    Companies involved in the new economy sectors, via a subset of the five best-performing subsector indices.

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  • 3D Printing

    Companies focused on 3D printing.

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  • Advanced Transport Systems

    Companies focused on optimizing the efficiency of managing large fleets of vehicles, cargo transportation, and mass transit.

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  • Alternative Finance

    Companies focused on providing alternative financing and wealth management capabilities.

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  • Autonomous Vehicles

    Companies focused on autonomous and connected vehicles.

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  • Clean Energy

    Companies involved in the clean energy sector, including those focused on renewable energy operations (solar, wind, hydro, geothermal) activities as a principal component of their business strategy.

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  • Clean Power

    Companies involved in advances in clean technology and clean energy.

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  • Cleantech

    Companies focused on building technologies or products that enable generation of energy in a clean manner.

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  • Cyber Security

    Companies focused on protecting enterprises and devices from unauthorized access through electronic means.

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  • Democratized Banking

    Companies focused on innovations within financial services, including direct lending, crowdfunding, automated wealth management, usage / on-demand insurance services, and digital currencies and related capabilities.

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  • Digital Communities

    Companies involved in digital social networking services, such as platforms connecting a user's profile with another individual or group, allowing users to communicate and view user generated content, as well as online gaming applications with a focus on community.

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  • Distributed Ledger

    Companies involved in the advancement of distributed ledger technology and those enabling services, such as miners.

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  • Drones

    Companies focused on the remotely operated or unmanned aerial, underwater, and surface-level drones market.

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  • Electric Vehicles

    Companies involved in the electric vehicle sector and the ecosystems supporting it.

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  • Enterprise Collaboration

    Companies involved in providing the next generation of products and services related to enterprise collaboration.

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  • Final Frontiers

    Companies focused on technologies at the forefront of deep-space and deep-sea exploration and development.

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  • Future Communication

    Companies focused on advances in how people meet, collaborate, and communicate.

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  • Future Payments

    Companies involved in providing products or services related to general-purpose platforms that allow consumers to transact using a digital balance.

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  • Future Security

    Companies involved in cyber security and smart borders, including relevant companies from robotics, drones, space, wearables, and virtual reality.

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  • Genetic Engineering

    Companies involved in the genetic engineering industry, including those that provide tools to allow other companies to more efficiently execute their own research.

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  • Human Evolution

    Companies involved in genetic engineering; those producing human-capability enhancement products like wearables and virtual reality companies; nanotechnology and robotics companies that focus on the medical, surgical, nano-, and microbots; and 3D printing technologies for medical purposes.

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  • Intelligent Infrastructure

    Companies focused on building the next generation of infrastructure systems.

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  • Nanotechnology

    Companies involved in the nanotechnology industry. This includes companies that produce nanoscale materials, as well as those that use nanotechnology in their production lines or that build machines capable of measuring information at the nanoscale.

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  • Robotics

    Companies focused on the robotics industry and significant subsystems.

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  • Smart Borders

    Companies focused on securing borders and critical infrastructure.

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  • Smart Buildings

    Companies involved in the smart buildings/connected home industry, which enables buildings to become more connected, intelligent, and adaptive.

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  • Smart Grids

    Companies involved in the smart power, intelligent water, and intelligent transportation systems industries.

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  • Smart Transportation

    Companies focused on autonomous and electric vehicle technology, commercial drones, and advanced transportation systems.

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  • Space

    Companies involved in the Space sector, including those focused on space-related activities as a principal component of their business strategy.

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  • Virtual Reality

    Companies involved in the virtual reality sector, including those focused on virtual or augmented reality related activities as a principal component of their business strategy.

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  • Wearables

    Companies focused on wearable and implantable technologies for consumer, military, and medical uses.

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Additional Resources

For more information about the S&P Kensho New Economy Indices, including data, factsheets and methodologies, visit the index family page.