2023 will see tech driven by key demand side factors
After the dramatic changes introduced by the pandemic and reactions to it, and the increased volatility in economies, sentiment, and markets, 2023 is likely to see technology trends influenced by several key demand side factors. While many technology suppliers will promote new capabilities and innovations, the general expectation of tighter economic circumstances will likely drive expenditures into shorter term, higher probability returns from the demand side. Among these factors are: Productivity; Resilience and Adaptability; Efficiency; Compliance and Sustainability, and Demographics.
Productivity has been challenged with the emergence from the pandemic. In the US, productivity rose strongly, then slowed markedly over the course of the pandemic as companies tended to retain their most productive employees, and as demand increased, hiring lagged.
Now, many companies are faced with higher turnover, difficulty hiring and resultant lower productivity gains.
Technologies that help educate, develop, train, and augment the workforce are demonstrating value in near term and are likely to expand in 2023. Virtual training expanded of necessity due to many pandemic restrictions.
Companies and suppliers have learned a lot about what is, and is not, effective. Process automation helps reduce the demand for personnel, but the expertise to handle exceptions is still valuable to essential.
Augmentation with expert systems, often including machine learning helps experts handle larger workloads, and helps increase automation over time, reducing the volume of those exceptions. Demographics in the developed world will longer term necessitate increased value creation per working person. Products that automate, augment, or educate will be in high demand.
Resilience and adaptability tend to be interrelated. Technology continues to increase its role, and value contribution, to processes and products. With this increase in value, the need to ensure resilience is approaching existential in many industries.
The impact of the recent technology failure at Southwest Airlines is a good example. The implications on software design, infrastructure, operations, and alternate processing paths are being examined as the boards of many organisations are asking about the risk.
Multi-Cloud infrastructure will continue to benefit as it can provide some level of resilience. The need to be able to adapt and gain more benefit from cloud usage will drive more native cloud transformation and industry cloud offerings will have increased reception among customers as the cost of converting will be compared to the value of transforming existing software to native.
Efficiency in technology delivery becomes more important when cost of capital increases and the value potential increases, as these have over the past year. Low-code, no-code and platform engineering will continue to accelerate in 2023.
Proven reusable assets and methods can enhance speed, scale, and security. Competitive position of organisations will drive a need for many organisations to become more efficient in many of their activities as inflation accelerates price competition. Improving speed and risk will drive demand for technology.
Projected recession does not automatically demand lowering of IT budgets, but it does raise the risk associated with failed or inefficient technology projects. Where cloud, automation, augmentation, training can contribute to increased margin, then the focus shift to minimising risk and increasing speed.
Compliance and Sustainability continue to increase the demands placed on organisations. The AI Act in the EU, the ongoing discussions and proposed legislation in the US, as well as the concerns on data access, usage and privacy as societal and national security issues is driving increased regulation where laws allow, and likely new laws.
ESG policy, regulation and law also impacts how technology is developed, deployed, and used in 2023. Demand for methods and tools for data management and data accuracy continues to be high. The value of data for analytics and artificial intelligence continues to increase.
The rules for use, and the penalties in law and through reputational risk have increased. Being able to identify the source of data, explain the use of data, modify, or anonymise data, and ensure that inaccurate data does not create a negative impact, are more important than ever. The expanded use of data to assist in support of environmental, sustainability and governance goals for many organisations is requiring review of data quality and improved management
Demographics, the aging of the developed world, the examples of Japan, much of Europe and now China on the dynamics of the societal shift is not only strongly inter-related with the other factors, but also driving demand for improved healthcare technologies, as well as agricultural technologies. These inter-related demands are having significant impact on the increased need for IoT, and data communications.
A simple use-case is the quality of care that is realised as the ration of medical personnel to demand continues to increase. Less-developed nations can gain immense benefit from access to healthcare. Developed nations have increasing demand due to aging. Technology that monitors, detects, and alerts and improves selection and deployment of interventions is likely to be of immense value. IoT and mobile communications have demonstrated new uses during the recent pandemic. Contact tracing and treatment monitoring have enabled new methods of care. Chronic disease monitoring and even intervention is being shown to improve specialist productivity and yield better patient outcomes. Similarly, care of farmland, crop production and food processing and transport have the potential to significantly reduce waste and improve sustenance.
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