"There has been more material progress in the United States in the 20th century than there was in the entire world in all the previous centuries combined."
-- Stephen Moore and Julian Simon, Cato Institute, December 1999
Given the success of the 20th century, those of us living in the 21st century have come to expect constant improvements in technology. We expect our 2-year-old computers to be rendered obsolete by Windows Vista. We expect to upgrade to a new and improved cell phone after our contract expires. And we expect that we'll be able to download any movie we want within the next year. You can already do this on Apple's iTunes, and Netflix (Nasdaq: NFLX ) and Amazon.com (Nasdaq: AMZN ) are committed to their own ventures.
But this culture of constant expectations is a relatively new phenomenon in human history. In terms of technology, your great-great-grandfather's life in the 19th century wasn't that much different than his great-great-grandfather's before him. In fact, the two could have switched times and places and still functioned with relative ease. But try putting one of them here in the 21st century. Talk about a fish out of water! Things we accept as commonplace today -- commercial airplanes, television, and microwaves -- would be downright perplexing to them.
And to think, all of these world-changing advances took place in just the 20th century. Heck, in just 66 years we went from the Wright brothers' first flight to Neil Armstrong setting foot on the moon. That's absolutely incredible when you think about it in the context of human history.
So, what's next?
If the first seven years of this century are any indication, 21st-century innovation will prove to be even more prolific than the 20th's. Consider the impact that in-car navigation systems, produced by companies like Garmin (Nasdaq: GRMN ) , have had on the way we travel. With one of these systems, you greatly reduce your travel time by having the system pick the shortest routes and limit your chances of getting lost.
Rapid technological advances are also being made in the health-care and renewable-energy industries. MedImmune's FluMist, an intranasal flu vaccine introduced in 2003, makes the seasonal flu vaccination less painful and gives doctors another tool to fight a very common ailment. (MedImmune was acquired by AstraZeneca (NYSE: AZN ) just last week.)
A recurring topic that will be addressed and re-addressed in the 21st century is the need for renewable energy sources. Integrated oil companies, for example, are getting into the renewable energy game. BP, for instance, has stakes in solar, geothermal, wind, and hydrogen power technology. Then there are the fuel cell producers like Ballard Power Systems (Nasdaq: BLDP ) , Plug Power (Nasdaq: PLUG ) , and FuelCell Energy (Nasdaq: FCEL ) that are ramping up production to capitalize on the growing demand for alternative energy products.
Clearly, whether the eventual solution is wind energy, ethanol, nuclear energy, a more efficient use of current fossil fuels, or solar energy, a lot of money will be spent and made to solve our world's growing energy needs. At our Motley Fool Rule Breakers growth investing service, one company we've recommended is Suntech Power, a Chinese company that designs, manufactures, and sells photovoltaic cells, which are used to generate power in solar panels. Solar power accounts for only a small fraction of current energy use, so there's huge growth potential here. Moreover, because Suntech is aiming to be the world's low-cost producer of solar technology, our team thinks the company is in a good position to meet both consumer and environmental demands.
How to profit from change
More world-changing technology will come about in the 21st century than in any previous period. The Cato Institute's report noted that "the progress of the 20th century is not a mere historical blip but rather the start of a long-term trend of improved life on earth." Indeed, science and engineering have already reshaped the world we knew just 10 years ago.
This is great news for investors. Such innovation presents unparalleled opportunities to capitalize on the pioneering companies that will change our world, but which of these companies are worthy of your investing dollars?
Fool co-founder David Gardner and his Rule Breakers team are always keeping their eyes out for ground-breaking companies that also happen to have great business models. For example, in April 2005, the team noticed Intuitive Surgical's tremendous sales growth, and its near-monopoly in robotic technology that enables minimally invasive surgery. The pick has since returned 213% for subscribers.
This article was originally published on Oct. 16, 2006. It has been updated.