During 2020-21, there’s been a surge of investment in tech. Venture capital investment in the UK tech sector reached over £30bn in the past 2 years, three times higher than the same period during 2018-19. A similar story in Europe, with more venture capital investment in tech in the first six months of 2021 than the whole of 2020.
Much of this investment has been driven by the pandemic, and the move to digitalise almost every aspect of the way that we work and interact. Globally, there has been a realisation that the initial move to remote and hybrid working is steadily becoming the new norm. We have also seen a continued focus on innovation, and a move towards the use of tech to drive sustainability.
As the year draws to a close, I take stock of the year that has been and look towards 2022: a year likely to be punctuated by innovation, sustainable tech and the continued rise of the ‘demand for digital’.
I am seeing convergence driven by digital transformation. There is already a push for 5G, with 6G development on the horizon. Investment in 5G, and the digital infrastructure required to support it, will propel emerging technologies that rely on fast and effective connectivity such as AI, IoT, virtual and augmented reality.
5G is already here, backed by the UK government’s commitment to providing the majority of the population with 5G coverage by 2027. With digital transformation now a key strategic focus for business, many organisations will be looking to hyper-automation – the process of identifying, assessing and automating as many business and IT processes as possible with the benefit of multiple technologies.
War on talent
Talent shortages are a rising and significant challenge for successful adoption of emerging technologies. IT executives consider the current tech talent shortage as the most significant adoption barrier to 64% of emerging technologies. The war on talent will likely continue well into next year, particularly in sourcing skills that enable cloud and edge, automation and continuous delivery.
The rapid evolution of technology is increasing competition across many markets globally. Highly-connected consumers demand instant mobile access to products and services. User experience is key, and organisations are feeling the pressure to digitally transform. This leaves the issue of what to do with slow, complex and outdated IT systems.
In the past, organisations often elected to go down the costly, time consuming and disruptive path of ‘rip and replace’, the process of replacing outdated legacy systems with one that is modern, fully functional, flexible and responsive to changing business needs. However as noted above, the chronic shortage of IT talent is driving a marked shift away from rip and replace in favour of simpler no-code and low-code solutions.
Organisations are increasingly choosing to leverage their existing IT assets, for example by using APIs and web services to integrate existing systems, providing the user with a seamless experience at a fraction of the cost. I expect to see this trend continue throughout 2022, as organisations embrace these simple, cost effective tools to rapidly deliver agile solutions.
Data’s status as a key strategic asset will be set, as data becomes increasingly democratised with the exponential growth of data, organisations are increasingly recognising data to be one of their most valuable strategic assets. Cost effective data storage, transfer and processing capabilities, together with the increased adoption of predictive analytics and emerging technologies such as AI and IoT, are driving greater efficiencies in the way that data is being harnessed and monetised by organisations.
Data is now routinely being used by organisations to identify business process efficiencies, better understand their customers and operations, improve marketing and create targeted products. Exploiting connected data for competitive advantage will become a key battleground for business.
Add to this the growing trend of the democratisation of data. Releasing data to make it available to more users, a trend which has largely been driven by widescale adoption of cloud storage solutions. We now have the tools available to not only store and share data more widely, but to better manipulate and understand data through the use of data virtualisation tools.
Take for example Open Banking, where data holders have for some time been required to make available the data that they hold through regulation for the greater benefit of consumers. We are just beginning to see the impact of this trend, which will no doubt be transformative in the longer term.
AI has already become a key tool in the global response to the pandemic, and we are likely to see significant increased adoption throughout 2022. One of the key challenges of implementing AI or machine learning is the need for large amounts of training data. Gathering datasets can pose security, privacy and data protection risks, particularly in use cases involving personal or sensitive data (for example in the healthcare sector). Federated learning, which trains a machine learning model on user data without the need to transfer that data to cloud servers, is increasingly being used to mitigate these risks.
As more organisations recognise the value being delivered by their AI investments, further investment is likely across multiple sectors, particularly in the areas of product development, marketing, sales and service operations. The dramatic shift towards online working and e-commerce will also continue to drive AI adoption as businesses explore automation, behavioural analytics and personalisation.
Throughout 2022, we expect that AI will increasingly be used by organisations to optimise business processes, reduce risks/costs and enhance efficiencies. A crucial tool for businesses to strengthen their position in an increasingly competitive global market.
Internet of Things
IoT continues to explode in popularity. Enabled by 5G, we are finally witnessing the unleashing of IoT’s full potential. Reliable and fast connectivity is key to a successful IoT project. The previous deficiencies in connectivity technology has often been an inhibitor to the deployment of large scale IoT networks.
Edge computing has also enabled faster and more comprehensive data analysis, creating rapid response times while supporting resilience to network disconnection. This is critical to the deployment of IoT in some safety critical industries. We will also see small data and TinyML play an increasingly key role in product development in many areas, such as autonomous vehicles.
We will continue to see a range of novel consumer IoT initiatives, particular in those sectors where a heavy reliance on physical human-to-human interactions currently limits user experience or efficiencies. Examples include continued adoption in the healthcare industry (for example, a patient using a smart wearable to report on health conditions), the use of IoT to facilitate digital twin technologies, and the increased use of IoT in everyday settings to reduce manual interactions such as purchases made via connected devices using voice commands.
2022 will also see an acceleration of the adoption of IoT in an industrial setting as a result of both Brexit and Covid-19. Manufacturers and other similar businesses have felt keenly the impact of staff shortages on their ability to monitor and safely maintain key infrastructure required for their businesses. As a result, the implementation of remote monitoring capabilities using IoT are likely to increase at a considerable rate.
While there is unlikely to be an immediate impact on business, it is hard to ignore Mark Zuckerberg’s “Metaverse” announcement. The development of an augmented and virtual reality world focused on connecting people, the merging of the physical and virtual worlds using a broad range of machine perception and AI capabilities that empower developers to build reality presence platforms, is an exciting proposition.
In the longer term this is likely to shape not only how we work, but also how we socialise and even how we do business. If the Metaverse becomes a reality it will likely transform society radically, with Morgan Stanley valuing the metaverse as an $8trn addressable market.
Boris Johnson has now outlined his ambition for the UK to become the pre-eminent force in the global quantum computing market by 2040. The race is now on to accelerate development of quantum computing hardware and software. Quantum computing is predicted to grow to a $1trn industry in the next three decades, and is expected to drive improvements in technologies that rely on heavy computational power, such as AI and advanced data processing tools.
Although still in its early stages of development, Amazon and Google are already using their platforms to accelerate the development of Quantum computing. Eagle, a 127 qubit quantum processor, has just been unveiled by IBM as the first processor of its type which can’t be simulated by a classical supercomputer. A team at Cambridge has also recently created a quantum computing desktop operating system – a major step forward in adopting quantum technologies for mainstream consumers.
Regulation and risk
Investing in, and implementing, emerging technologies can be complex. It is critical that organisations understand that they are often operating in an uncertain and rapidly changing regulatory environment. Understanding and managing the regulatory obligations relating to both the technology, and the data which underpins it, is key.
As the pace of technological change intensifies, so too will regulators’ and policy makers’ scrutiny on how complex technologies are governed. 2022 is likely to be the year that we will achieve clarity on the future regulation of AI.
Cybersecurity is also a risk that comes with the deployment of any emerging technology. Organisations will need to be aware of not only the very real operational and reputational risk associated with cybersecurity breaches, but the significant penalties which can arise from associated regulatory breaches.
It goes without saying that the pandemic has brought about a tremendous technological shift across almost every industry globally. We have seen an increased uptick in investment in tech, innovation and sustainability, with tech being harnessed to tackle our response to the pandemic and to develop sustainable solutions across all industries.
With the further deployment of 5G, investment is likely to continue at pace as organisations harness the value of their data, and exploit the benefits of emerging tech to meet the challenges of tomorrow.
Nazrul Hoque – 01 January 2022