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Print article2023 Predictions: Technology sector outlook
January, 2023 - Shoosmiths LLP
Smart energy
Against the backdrop of the war in Ukraine and the ongoing energy crisis, alongside an enhanced focus on ESG (and its attraction to tech consumers and investors) as well as more visible (and frequent) protesting from groups such as Just Stop Oil, smart energy is at the forefront of the tech conversation. A recent report cited $1.5 billion investment into the UK energy tech sector over the previous year. This will increase over 2023, with alternative energy production, the integration of energy storage into structures such as buildings and transport infrastructure (think vehicle to grid charging), energy decentralisation (think microgrids), and smart consumption at the fore. All factors considered, the energy and infrastructure sector will rely heavily on technology and data to boost productivity and drive efficiencies. Please find a link here [enter link] to my colleague, James Wood-Robertson’s predictions for the Energy and Infrastructure sector.
Simulation
I predict that the accessibility of specific simulation technology (analysing outcomes) will become more of a focus in the tech sector in 2023. Previously hardware, personnel and financial constraints have meant simulation has predominantly featured in rarefied industries such as banking, automotive and the military. However, simulation can and will have further application across many sectors, helping us to make better decisions in relation to the way we undertake everything from city design to heart surgery (e.g. how the metaverse might be used by junior surgeons to simulate an operating theatre). Also consider companies like SimSpace and Weaver who are making simulation cheaper and more accessible, which when coupled with spatial computing technology, might enable a town planner to model and simulate the effects of certain design choices made today on urban development in the future. We’ve already seen examples of similar technology simulating human intelligence on the AI side of things, for example the introduction of smart pick up and walk out supermarkets where the consumer isn’t even required to pull out their wallet. We’re likely to see more technology like this in our lives and workplaces throughout 2023.
Supply chain revolution
Due to the long-lasting effect of the pandemic, disruption to supply chain operations are expected to continue in 2023 and, undoubtedly, for years to come. Therefore the supply chain management market will remain an integral part of the growing economy and is expected to double in size over the next decade. As a result, KPMG report that six in 10 businesses plan to invest in digital technology to bolster their supply chain processes, data synthesis and analysis capabilities. Increased simulation, smart contracting (e.g. smart bills of lading being used in the shipping industry), driverless fleets, autonomous warehouse management, and the integration of drones into cargo distribution are just a few examples of how businesses have already begun to use technology as a strategy to avoid growing concerns around inflation and economic uncertainty. This trend follows on from last year’s predictions around the business need to automate as many processes as possible and will likely remain a focus in the coming year.
Metaverse
Recent cultural shifts, coupled with the increased accessibility to augmented and virtual reality technology, have led to the metaverse grabbing tech headlines throughout 2022. Forbes predicts that the metaverse will add $5 trillion to the global economy by 2030, with 2023 the ‘defining’ year for its direction. We’re seeing the virtual shift already as the entire digital gaming industry is expected to surpass $220 billion in revenue in the next year, more than streaming video, digital music, and e-books combined. We’ve even seen virtual goods, in the case of Gucci, selling for more on Roblox than in real life. As companies like Nike, Amazon and Meta (to name just a few!) continue to invest in the space, it will be interesting to see how others respond and follow suit.
Summary
These predictions only scratch the surface of what the 2023 crystal ball is able to show. Notably, and well beyond 2023, tech investments are also likely to help with future proofing. The technology topics currently receiving the most attention from industry experts not only align with changing consumer preferences – they also exist to enhance efficiency, decrease labour demands, reduce operational costs, and enhance scalability.
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