Franklin Templeton: Innovation Insights Quarterly: Q2

CONTRIBUTORS | Matthew Moberg, Portfolio Manager, Franklin Equity Group United States

In this quarter’s Innovation Insights, Franklin Equity Group takes note of four innovations to improve life as we know it, ranging from the way we hear to the way we heal.

The expansion of the fourth industrial revolution is being defined by innovation at the level of the byte, the atom and the gene. This quarter, we take note of four innovations that manipulate these basic building blocks to improve life as we know it, ranging from the way we hear to the way we heal. The human capacity for technological ingenuity continues to impress us.  

Personalized cell robot repairs a scratch in a layer of neurons

Researchers from Tufts University have developed an “anthrobot” made of cells that is able to repair damaged human tissue. The anthrobot was grown out of human tracheal (windpipe) skin cells that were placed in gel for two weeks and then transferred to a less viscous solution. The result was a collection of mobile cells with the ability to “row” through the environment using their exterior cilia—hairlike structures that encompass their surfaces. Most remarkably, several anthrobots fused to form a “superbot” that then healed a sheet of scratched neurons within three days without any genetic modification.¹

Why it matters: The anthrobot may inaugurate a new era in healing, referred to by insiders as “tissue engineering 2.0.” Anthrobots will likely be made from a person’s own tissue and then used to clear arteries, break up mucus or deliver drugs. In the future, scientists may be able to develop biobots with applications in fields as diverse as sustainable construction and outer-space exploration.

Exhibit 1: Anthrobots

Anthrobots, which today have the potential to heal at the cellular level, will likely be made from a person's own tissue

For illustrative purposes only.

New AI-powered jet responds to the autonomous drone threat

A cheap and autonomous vertical takeoff and landing jet has been successfully designed. It was built as a countermeasure to modern military drones that can be produced at high volume and low cost. When faced with a threat, the jet uses artificial intelligence (AI) to image the threat and decide whether to engage. Perhaps most importantly, the jet is reusable, a feature that dramatically reduces the lifetime cost of using the weapon.²

Why it matters: Geopolitical tensions are on the rise, evidenced by recent conflicts in Ukraine and the Middle East and increasing tensions over the South China Sea. The rise of AI allows countries around the world to deploy sophisticated autonomous drones at low cost, a development that leaves the defenses of many modern militaries structurally ill-prepared. This jet is an important new option to address this emerging threat. 

Scientists edit the genes of the cow microbiome to fight climate change

Using clustered regularly interspaced short palindromic repeats (commonly known as CRISPR), scientists have found a way to edit the genes of methane-producing bacteria found in the stomachs of cows. Cows will swallow the treatment, potentially using lipid nanoparticles as a method of delivery. Once inside the cow, the gene edit “gifts” a member of the microbiome community with a genetic advantage, allowing it to proliferate until the entire community has the edit.³ 

Why it matters: Methane accounts for 16% of global emissions and is 28x more potent than carbon dioxide at trapping heat in the atmosphere.⁴ Cows are responsible for 30% of all global methane emissions.⁵ “Turning off” the methane-producing mechanism in these bacteria could contribute sizably to overall emissions reductions.

Hearing aids filter background noise with AI

A new type of hearing aid is on the market which pairs ear buds with an AI-powered app. The app samples voices and creates speaker profiles, then allowing the user then to choose which voice they want to listen to and which to tune out.⁶

Why it matters: People with hearing loss now have a tool to address what’s called the “cocktail party problem,” where noisy environments make speech unintelligible. Indeed, hearing loss is a more prevalent issue than many might imagine: about 15% of Americans are affected by it.⁷ This use case for artificial intelligence can create an augmented and better reality for those Americans who currently have trouble operating in noisy spaces.

Endnotes:

1. Source: Hutson, M. “Tiny robots made from human cells heal damaged tissue.” Nature. November 30, 2023.
2. Source: Alamalhodaei, A. “Anduril unveils Roadrunner, ‘a fighter jet weapon that lands like a Falcon 9.’” TechCrunch. November 30, 2023.
3. Source: Campbell, M. “Precision Microbiome Editing to Tackle Methane Emissions.” Genomics Research. August 27, 2023.
4. Source: “Importance of Methane.” Environmental Protection Agency. November 1, 2023.
5. Source: “Methane emissions are driving climate change. Here’s how to reduce them.” UN Environment Programme. August 20, 2021.
6. Source: Matchar, E. “The Eight Coolest Inventions From the 2024 Consumer Electronics Show.” Smithsonian Magazine. January 12, 2024.
7. Source: Hernandez, N. “Hearing Loss Statistics 2024: More Common Than You Might Think.” NCOA Adviser. February 22, 2024. 

Investment potential and risks

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Equity securities are subject to price fluctuation and possible loss of principal.

Investments in fast-growing industries like the technology and health care sectors (which have historically been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments.

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