Technology

Shaping the New Normal

Drivers of Change

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The importance of the technology sector has increased enormously in recent years. During the pandemic, innovation lowered the barriers to digital disruption, paving the way for more rapid, technology driven change. Cloud technology continues to change the corporate IT landscape, with basic cloud services becoming more affordable. At the same time, the cost of storage has decreased and compute power has risen.

These developments have created the conditions needed for artificial intelligence (AI) to have a greater impact. The technology has begun entering real life applications – and while the focus is currently on solving relatively basic tasks, future applications will include a wide range of industries.

Internet companies have been embracing AI proactively, with machine learning techniques now widely deployed across the sector. As the development of AI-powered voice recognition enables more effective use of voice commands for internet apps, virtual reality (VR) and augmented reality (AR) will also become more mainstream.


Opportunities

The opportunities are considerable. Today, AI is focused on solving relatively basic tasks, such as making online purchasing recommendations or assisting doctors with diagnoses. Even this first stage of AI – known as Narrow AI – is still in its infancy.

Already, AI is beginning to be deployed more broadly across the internet sector, playing a role in everything from marketing and operations to finance and HR. This will bring opportunities for companies to personalize their offerings to a far greater extent than they do today. Meanwhile, the deployment of advanced robotics could become central for vertically integrated ecommerce companies, leading to greater operational efficiency.

Other areas of opportunity include the rise of autonomous vehicles, faster transaction speeds, the rise of mobile broadband driven by 5G and the use of blockchain to create standardized digital credentials.


Threats

The technology sector faces many threats and challenges as progress continues. Naturally, companies will need to embrace innovation and avoid falling on the wrong side of relevance. But there are other areas of concern. For one the growing reliance on connected devices and systems has opened up new security vulnerabilities. Given the frequency of cyberattacks against companies, political organizations and government officials, the importance of cybersecurity in this climate should come as no surprise.

Another issue is the erosion of consumer trust, with people becoming more concerned about the use of their data following recent data breaches. The monetization of social media has historically relied on accessing consumer data, but in the future this data may increasingly be controlled by consumers themselves – thereby driving up the costs of gaining access to this data. The EU General Data Protection Regulation (GDPR) has given consumers greater control over their personal data – and these standards may become global practice in years to come, replacing looser standards in other markets including the U.S.


Strategic Imperatives for Success

To succeed in this environment – and meet customers’ evolving needs – companies will need to invest in growth and fully understand the potential applications of emerging technologies. A rapid pace of innovation is essential in this evolving environment. Companies with access to sufficient capital will naturally be at an advantage when it comes to achieving the necessary scale – but smaller, nimbler players will also have a role to play.

Companies that are willing to embrace opportunity are positioning themselves successfully for the years ahead. Others, however, may face challenges such as losing market share or experiencing customer churn – and companies which fall behind may find it difficult to catch up with more innovative competitors in the future.


Technology: Up Close

Leading IT companies are proactively embracing new technologies, with developments such as AI, cloud and big data expected to bring fundamental changes in the coming years.

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