What are the tech trends for 2023? Where will most of the money go in the (broad) technology sector in the near future? McKinsey's consultants researched it and published one earlier this year bulky report of 184 pages on the subject. I find the report particularly interesting because it gives entrepreneurs and administrators a good insight where the action is.
Two big trends in tech
McKinsey distinguishes two major tech trends. One of them, by them engineering tomorrow named, is extremely interesting with themes such as space technology, bio-engineering and sustainable consumption. But I will ignore it in this blog because the focus of No Monkey Business is more on IT: software, IT systems, e-commerce, artificial intelligence and so on. A further acceleration here McKinsey sees as the second big trend for the next few years. The so-called McKinsey Technology Council is talking about the arrival of Silicon Age.
Within that concept, McKinsey distinguishes nine top themes – where, according to the consultants, most investments (across the business sector) will be made and most innovation will take place: applied artificial intelligence, advanced network connectivity, web3, machine learning at scale, cloud and edge computing, virtual and augmented reality (VR and AR), cybersecurity, quantum technology and next-generation software development (such as low code and no code).
Newer tech trends
For the newer tech trends, especially quantum technology, VR and AR, and machine learning at scale, McKinsey foresees a journey of trial and error, as is often the case with young technologies. Think of a large mix of mainly smaller companies and also some larger concerns that hope for early success.
In the case of VR and AR, this is notably Meta (Facebook's parent company), which invests billions in immersive technologies. So far with little success, with grumbling shareholders as a result.
In the words of the researchers: 'Since the emergence of thirty years ago, technology has been developing ever faster. In the future, things will go even faster – and more intensively. What particularly surprised us is what a massive impact technology will have in all sectors in the coming decades.'
Nine top themes in tech
Where will the most money go in the near future? McKinsey examined how much money was going on per sector in 2021 (worldwide), and then gave the themes a score from 0 to 5 on impact. A 0 would mean that the theme is barely picked up but is interesting, a 5 means that a theme is already heading towards 100 percent mainstream, with developments accelerating even further.
- applied artificial intelligence
Investments in 2021: 165 billion euros
- advanced network connectivity
Investments in 2021: 166 billion euros
Investments in 2021: 110 billion euros
- machine learning at scale
Investments in 2021: 5 billion euros
- cloud and edge computing
Investments in 2021: 134 billion euros
- virtual and augmented reality (VR and AR)
Investments in 2021: 30 billion euros
- trust architecture and digital identity
Investments in 2021: 34 billion euros
- quantum technology
Investments in 2021: 3 billion euros
- next generation software development
Investments in 2021: 2 billion euros
As I said before: this overview does offer some guidance for entrepreneurs and administrators. Web3 (you know, bitcoin and blockchain remain a special case. There is a lot of money involved, but the technology remains very closely intertwined with a limited number of sectors, finance first.
Major investments in tech companies
Almost the opposite applies to cloud computing and trust architecture & digital identity, as part of cyberyecurity. In just a few years, these have become the domain of large concerns and huge investments – in combination with niche players. Surprisingly, artificial intelligence is already a bigger issue than cloud computing.
Quantum computing is for the real daredevils. And finally, those who want to lead the way can look for next-generation software development or the industrialization of machine learning. That is, the researchers expect, where small companies will grow in the coming years!