• December 7, 2022

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If you are following the tech world, I am sure you’ve seen many doom and gloom stories. Tech companies that grew during the pandemic are now cutting back and laying off workers in various tech sectors. Tech companies’ earnings are down. PC demand is off by at least 20% this year. Earliest estimates for tech to start growing again is in early 2024.

The tech industry, among others, is still dealing with supply chain issues that will probably correct in late 2023. And the economy is hurting. Around the world, inflation, war, and threats of war have created an economic environment where many people are hesitant to spend on non-essentials.

This week, tech stocks took a beating for missed earnings. Given the economic climate and forecast of a recession, in most cases, tech companies will struggle until we see some upturn in the global economy.

Its tempting to see the demand for technology losing steam and that its future may be dimmed. But history shows that adopting a gloom and doom position on tech would be a mistake. We have had two major economic and tech downturns in the last 22 years. The first downturn was caused by the dot.com crash in 2000-2002, where many people wrote off the future of tech. However, when the economy turned, and the tech industry got back to innovating, we had a major tech boom as the iPhone was released, the internet got its proper footing, and tech and stocks took off again.

The second downturn came in the 2008-2009 time frame with the housing crisis, and tech stocks again took a significant hit. During that time, there was talk again that demand for tech was declining; even some said tech had lost steam forever. Yet, within two years of this downturn, tech stocks not only rebounded but were bolstered by new internet services. Uber, Lyft and social media took off, and all major companies were adapting various forms of web-based apps and services as they began to undergo a digital transformation for their businesses. Add the extreme growth in demand for tech during the Covid crisis and the period from 2010 to 2021 saw tech deliver three trillion dollar companies and massive growth in tech wealth.

We are again facing various challenges to tech growth due to the economy and the over-purchasing of PCs during the pandemic, among other factors. But it would be wrong to believe that demand for tech is over and, more importantly, that there are few areas for extreme growth in tech in the near future.

So, where will we see new growth in tech demand in the future? What innovation is in the works that will drive tech upward?

There are a lot of new tech projects in the works that are destined to drive further growth. The list is long, but I will highlight some of the most important ones that will have impact over the next five years.

Smart Cars

While we will continue to see advances in self-driving vehicles, genuinely automated driving is still ten years off. However, we will see great innovation and advancements in making cars more intelligent and safer. Products like Apple Car Play already add more intelligence to vehicles today. In the short term, the big carmakers are focusing on L2 and L3 autonomous driving, emphasizing making cars safer.

Also, the transition from gas to electric vehicles and its economic growth will bring significant revenue to those in tech involved with this major change within the world of autos.

Big Data

Big data is a massive area of growth in that everyday companies are collecting trillions of bits of information needed to run their companies and meet the needs of their customers. This collection requires massive servers, storage, higher processing power, and artificial intelligence to cull this information to manage and understand all of this data. Big data will power high demand for tech in the near and distant future and continue to be a growth market for decades.

Artificial Intelligence

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AI is poised to become one of the most important and disruptive technologies for our future. It is already deployed across just about every industry at the data level. Still, it will be used for things like accelerating drug discovery, use in all types of medical research and within telemedicine, as well as in industrial design, advanced education, and almost countless ways to power our digital future. But, unfortunately, it can also be used for nefarious reasons, and those behind AI need to help keep its use responsibly and ethically.

AR VR

We have barely scratched the surface of how AR and VR will impact our future. Although the concept of the metaverse is in question, those working in this area see how it can affect all of our lives in the future. Meta and their Quest headsets are the most used devices in VR. Apple should soon release its AR headset, and given Apple’s past, this company could be the one that defines and drives AR and mixed reality into the mainstream. AR, MR, and VR will be another area for growth and can be a driver for significant tech revenue in the next five years.

PCs and New Form Factors

While demand for personal computers has slowed at the moment, there will always be demand for PCs. Big companies use PCs daily, and eventually, they must be replaced. Consumers have also become heavy users of PCs, and they upgrade even faster than enterprise users. At the same time, laptops are becoming lighter and thinner, and there is a lot of innovation in new and radical designs in PCs.

Lenovo’s ThinkPad X1 Fold is an excellent example of these innovations, as well as rollable screens. In addition, the integration of 5G wireless connectivity in future laptops will continue to drive new demand and growth.

Smartphone Innovations

Today about 1.3 billion smartphones are sold annually worldwide. That number is stable, although there is an extensive refresh each year in which new smartphones are sold annually. Smartphones are a critical tool at the center of our digital lives, and most prominent smartphone makers continue to innovate on this handheld computing platform. As a result, we believe that even during a downturn, there will continue to be strong demand for smartphones, even if the amount per year is weak. However, smartphones will continue to be a robust market that will drive significant revenues within the tech world.

Privacy and Security

Privacy is where we will see more investments during the downturn, as it is a significant problem that companies must invest in regardless of the economic climate.

However, there will be innovations related to biometric security that will make it easier and more secure to access smart devices and other services like banking and shopping, which will drive additional revenue in this security area.

5G

5G is in less than 10% of smartphones today, and the demand for 5G smartphones will be vital as the carriers improve their coverage in the U.S. and worldwide. Over the next five years, 5G phones will be in at least 60% of smartphones worldwide. That will drive significant new growth in tech, especially within the carrier and communication worlds. In addition, 5G brings higher-speed connections to smartphones, tablets, and laptops, enabling a whole new world of connected smart cars, smart cities, and IoT.

During the next five years, we will also see satellite connections and services built into high-end smartphones that can be used anywhere on the planet. While it may be a targeted and small market, it too brings new revenues to satellite carriers who see this as a greenfield market.

Considering new technology being created and innovations in the works, we could see at least another $1 trillion of new revenue produced by the tech world over the next five years. And that estimate may be low.

Yes, we are headed into tough economic times where belts will be tightened in the short term. However, if history is our guide, there will be a time when the economy will turn around and move upward again. At that time, we will see new tech innovations, products, and services that will drive strong demand for tech over the next five years and drive substantial tech profits once again.

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