As technology consumes an increasing portion of our lives, it becomes more challenging to spot future tech trends. The world is enveloped in a digital layer that pervades every part of business, government and society. How do we sift through tech’s endless twists and turns to back the future winners? The answer, as always, lies in understanding the emerging consumer trends and marrying up the technology innovations that are best suited to support them.
Following the shock of the pandemic there are a few irreversible changes that will drive the recovery. First up is ecommerce. Many of us have spent the last year getting used to buying all manner of things online. This will continue.
In the UK online shopping has gone from 20% of retail sales to just under 40%. In the US it is likely that it accounts for just over a third of overall sales. For many countries ecommerce has doubled as a proportion of sales in the last 12 to 18 months. This is leading to a surge in businesses upgrading their ecommerce websites while the opportunities for new niche shopping sites abound. As we exit the pandemic we can expect a consumer expenditure surge - and much of that will be online.
Linked to the above we have seen the development of the cashless society. Cards, mobile wallets and electronic payments abound. On the back of this lies the rise of the cryptocurrency. The first cryptocurrency was launched in 2009 and the use of these digital currencies has grown exponentially since then. The cryptocurrency market was valued at $1.03 billion in 2019 and is projected to reach $1.40 billion in 2024, growing at a CAGR of 6.18% during the period.
A number of different alternative currencies have blossomed. Non Fungible Tokens (NFT’s) and micro-payments in general are making digital assets more tradable. Digital photographs, videos, art and design can be collected and acquired digitally. The implications for artists, writers and filmmakers could be considerable.
The next Coronavirus induced trend is home working. Many companies will continue to support their employees working from home after lockdowns are over. We expect, over the next 5 - 10 years, that up to 50% of companies will offer some kind of hybrid work from home and office scheme. This will release expenditure from businesses and employees as they continue to upgrade home working facilities and equipment.
Zoom will not be the sole beneficiary. The battle to become the de facto hybrid office productivity system will heat up - with Microsoft and Google the obvious winners. Many other cloud-based business apps could see increases in sales - but the race to deliver open Web apps that fully utilise HTML5 will change the look and feel of tomorrow's software and a possible trend away from in-app experiences and back to open, Web pages.
More home working means more home entertainment. Expect to see a growing number of branded TV streaming services, smarter voice activated hardware and better home entertainment devices. 5G will of course increasing network capability meaning ever slicker video and gaming. The fight between Amazon, Netflix and Apple for our streaming attention has just begun. Expect the TV networks and cable companies to join the fray.
Equally, we can look forward to an increase in independent, subscription based media that is enabled by a new generation of platforms designed so that writers and journalists can sell directly to their public. On top of this, a new shift towards Media-as-a-Service will see content-rich, digital shop windows delivering a range of linked services.
The future of social networking will be increasingly private and immersive, connecting people through audio and video and increasingly 3D. Social media will get more regulated and policed. The free wheeling Internet is behind us. As we celebrate 30 years since the first web page was published we can look forward to an ever more mobile experience. The Web will drive work and play embedded in 5G phones, next generation TV’s, cars and wearable devices.
With nearly 5 billion people using the Internet, companies and public sector organisations will race to adopt massive data analytics and supporting technologies, such as sensors, to drive the next wave of automation and business adaption. This will have wide ranging implications for privacy. Expect to see major tech companies such as Apple and IBM pushing to become the privacy and security brand to trust. Business consultants will push related solutions such as the Internet of Behaviour (IoB), ‘total experience’, privacy-enhancing computation, the distributed cloud, intelligent composable business and hyperautomation!
AI and robotics is starting to appear in a growing number of business and consumer experiences. The military and various leading, hi-tech industrial organisations will make robotics happen as they continue to fly planes while driving vehicles and ships remotely. The pilotless tank combined with R&D work on driverless vehicles will provide a more realistic spur for driverless cars and trucks to hit the road in numbers by 2030.
As the future of warfare will create robot soldiers, we can assume that this will lead to the launch of consumer facing robots. Initially as a fad for rich folk to get a little more help around the house and garden. Some believe in the future of robot pets.
Looking after our health will remain top of our minds as we start to exit the worse effects of the pandemic. So we can expect to see a wave of new innovations and investment capital going into a series of new generation healthcare initiatives including online diagnostics and health service delivery.
Equally we are seeing the rise of biopharma. A good example of this is in vaccine development. Unlike previous vaccines, many of which used an inactivated or attenuated form of a virus to create resistance to it, the vaccines created by Moderna and the BioNTech–Pfizer partnership use mRNA. This platform has been under development for years, but these are the first vaccines that have secured regulatory approval. The “m” is for “messenger” because the molecules carry genetic instructions to the cells to create a protein that prompts an immune response. The body breaks down mRNA and its lipid carrier within a matter of hours. (WHO lists 60 candidate COVID-19 vaccines that have advanced to clinical trials; many don’t use mRNA.)
Just as businesses have sped up their operations in response to the COVID-19 crisis, the pandemic could be the launching point for a massive acceleration in the pace of medical innovation, with biology meeting technology in new ways. Not only was the COVID-19 genome sequenced in a matter of weeks, rather than months, but the vaccine rolled out in less than a year—an astonishing accomplishment given that normal vaccine development has often taken a decade. Urgency has created momentum, but the larger story is how a wide and diverse range of capabilities—among them, bioengineering, genetic sequencing, computing, data analytics, automation, machine learning, and AI—have come together.
Regulators have also reacted with speed and creativity, establishing clear guidelines and encouraging thoughtful collaboration. Without relaxing safety and efficacy requirements, they have shown just how quickly they can collect and evaluate data. If those lessons are applied to other diseases, they could play a significant role in setting the foundation for the faster development of treatments.
The development of COVID-19 vaccines is just the most compelling example of the potential of what MGI calls the “Bio Revolution”—biomolecules, biosystems, biomachines, and biocomputing. In a report, MGI estimated that “45 percent of the global disease burden could be addressed with capabilities that are scientifically conceivable today.” For example, gene-editing technologies could curb malaria, which kills more than 250,000 people a year. Cellular therapies could repair or even replace damaged cells and tissues. New kinds of vaccines could be applied to noncommunicable diseases, including cancer and heart disease.
The potential of the Bio Revolution goes well beyond health; as much as 60 percent of the physical inputs to the global economy, according to MGI, could theoretically be produced biologically. Examples include agriculture (genetic modification to create heat- or drought-resistant crops or to address conditions such as vitamin-A deficiency), energy (genetically engineered microbes to create biofuels), and materials (artificial spider silk and self-repairing fabrics). Those and other applications feasible through current technology could create trillions of dollars in economic impact over the next decade.
The pandemic has also brought on unprecedented government debt and a drop in economic performance that can be compared to post war conditions. Governments that can afford it will focus their attention increasingly on post Covid reconstruction which should help accelerate infrastructure spending, healthcare networks, affordable homebuilding, broadband and 5G rollout - plus a green agenda. Less wealthy nations will be at the mercy of the Western world and China for their health, wealth and happiness.
We believe that the post Covid euphoria will unleash a wave of consumer spending, private investing and entrepreneurship. This will include a consumer travel boom with business travel lagging. Fashion, furniture and the experience economy will do particularly well. The trend towards buying homes with larger green spaces and office space will accelerate.
Private investment has collected a huge war chest that it will look to deploy from this year. Globally, Private Equity firms are sitting on almost $1.5 trillion of “dry powder”—unallocated capital that’s ready to be invested, according to McKinsey. The COVID-19 crisis has hurt in some ways, with global deal value down 12 percent compared with the first three quarters of 2019 and deal counts down 30 percent.
On the other hand, global fundraising has stayed strong—$348.5 billion through September 2020, on par with the previous five years—and deal making in Asia has more than doubled. The PE industry has a reputation of zigging when others are zagging, making deals in difficult times. And it has history on its side: returns on PE investments made during global downturns tend to be higher than in the good times. Put it all together, and we don’t think the PE industry is going to keep its powder dry for much longer; there are simply going to be too many new investment opportunities.
Investors and entrepreneurs will chase tech, digitalisation, healthcare, financial restructuring and the green economy. The latter may prove to be the biggest takeaway from the pandemic.
The green revolution has mainly been driven by renewable energy companies taking on the fossil fuel producers. But new green sectors are building in waves and quite rapidly - including green tech, green homes, sustainable fashion, vegan and artificial food, artificial fabrics and furniture, electric vehicles and transport, nature restoration, regenerative farming and biodiversity solutions.
The imperative for businesses is clear along two fronts. First, businesses need to respond to the sustainability concerns of investors. It’s possible that the COVID-19 crisis foreshadows what a climate crisis could look like: systemic, fast moving, wide ranging, and global. There is a case, then, for businesses to take action to limit their climate risks—for example, by making their capital investments more climate resilient or by diversifying their supply chains. Some businesses will go further than this and launch a range of green business initiatives.
More significantly, the growth opportunities that a green economy portends could be substantial. BlackRock, a global investment company with around $7 trillion in assets under management, noted in its 2021 Global Outlook that, “contrary to past consensus,” it expects that the shift to sustainability will “help enhance returns” and that “the tectonic shift towards sustainable investing is accelerating.” Green growth opportunities abound across massive sectors such as energy, mobility, and agriculture. Just as digital-economy companies have powered stock-market returns in the past couple of decades, so green-technology companies could play that role in the coming decades.
The last year has been devastating for so many, not least the 2.7 million people that have lost their lives, and the countless others that have faced poverty, abuse and homelessness. Unemployment has soared and the poor have got poorer while the rich have got richer. Tomorrow's companies should address the big issues of our time - inequality, racism, opportunity, flexible working, digital and green. If they do, the post pandemic opportunities could be considerable.
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