There is nothing like the start of a new year to hone a company’s business priorities, and as technology underlies almost every business management process and continues to be the number one enabler of growth, investment in this field will be top of mind for corporate decision makers. Here, Investment Monitor takes a look at the technologies to watch in 2022.
Much has been made in the media of ways in which artificial intelligence (AI) could disrupt our world. GlobalData’s 2022 TMT Predictions report sees a more practical role for AI in the coming year, with less hype and companies focusing more on practical applications that help their core businesses. The AI market will be worth $190bn in 2025, up from $67bn in 2021, according to GlobalData. Businesses should already be investing in one or all aspects of AI, including machine learning, data science, conversational platforms, computer vision AI chips, smart robots and context-aware computing. Banking, healthcare and technology sectors lead implementation, but most businesses will face some disruption from some or all of these technologies, according to GlobalData. Big Tech is at the forefront of AI use cases, with the significant advantage of having vast quantities of data and computing power at its disposal, a prerequisite for AI development.
The metaverse is a virtual world where users share experiences and interact in real time within simulated scenarios. Investment in a global metaverse could reach $800bn by 2024, according to Bloomberg Intelligence, and Big Tech is already investing significantly even though realisation of the full global metaverse is some way off. Meta (formerly Facebook) plans to invest $10bn by the end of 2021 in its Reality Labs division, demonstrating how much of a priority this area has become. Early prototypes and use cases will emerge in 2022, according to GlobalData, with gaming an ideal starting point and enterprises becoming the prime market for metaverse developers in 2022.
The next year will be an important one for quantum computing, a sector on the cusp of commercialisation. Important advances in this nascent technology are being made while increasing competition for a finite global talent pool of software engineers will continue to be a challenge throughout the next year and beyond. Quantum computing will enter a period of consolidation in 2022. With increasing skills shortages as the sector continues to grow, software start-ups will be targets for acquihires, especially those already partnered with larger tech companies, predicts GlobalData. Some – PsiQuantum for example – may even go public in 2022.
The global cloud computing market will be worth $616bn by the end of 2022, according to GlobalData forecasting, up 13% from 2021. Cloud services will be an essential utility for businesses in 2022 as they increasingly outsource management of data and applications to third-party providers. Data centre security will become evermore important, as will their need to be redesigned to become cloud-centric. As a consequence, GlobalData expects cybersecurity investments to rise, especially the security-as-a-service approach of deterring cyberattacks. The Covid-19 crisis has been a steep learning curve and prompted greater investment in disaster recovery services, particularly for critical national infrastructures such as healthcare and energy services. Successful companies will secure their data and applications for ease of use for remote workers using cloud-native applications and keep their operations running even with higher risks of downtime, according to GlobalData.
A surge of investment in start-ups has expanded the number of fintech unicorns to 116, with a combined value of $529bn, according to GlobalData, whose analysis expects at least ten start-ups to join the unicorn ranks over the next two years, including Atom Bank, Corvus Insurance and Navi Technologies. The growing stable of highly valued fintech start-ups demonstrates the level of potential disruption to the financial services sector. A sense of ‘if you can’t beat them join them’ will pervade with old line institutions including Goldman Sachs and Visa forming alliances with fintech unicorns.
The cryptocurrency market is worth $3trn and will continue to grow in 2022, predicts GlobalData, despite its volatility. The sector is garnering mainstream acceptance with businesses including Visa and PayPal incorporating crypto into their payment infrastructures. A proliferation of cryptocurrencies beyond the original Bitcoin means there are now more than 14,000 types in existence. With global regulators grappling with how to regulate the sector, cryptocurrencies have the potential for major disruption to global financial systems.
Electric vehicles and batteries
Annual electric vehicle (EV) production will exceed ten million units by 2025, according to GlobalData. EVs as a proportion of new light vehicle production will rise from 5% in 2021 to 11% in 2025, predicts the analytics company. The shift towards EVs has been primarily driven by legislative changes to meet environmental, social and corporate governance targets, but momentum is also becoming demand-led. Although Europe’s EV fleet grew faster than China’s in 2020, China will continue to dominate the sector. In 2020, 48% of all EVs on the road were in China, more than the combined total for the US and Europe.
However, in 2022, the growing gap between supply and demand for lithium, as well as other core battery raw materials, will become increasingly challenging. GlobalData predicts a mounting possibility of a global battery shortage by 2025. In response, miners of core battery raw materials will see an influx of deals and investment and many automakers such as Tesla will continue to lobby the US government to waive tariffs on Chinese-dominated battery materials such as graphite.
The cloud gaming market will reach revenues of $3bn in 2022, up 59% from 2021, according to GlobalData forecasts. Cloud gaming allows video games to be streamed directly from the cloud and played using any device with a display and an internet connection. Cloud gaming has the potential to disrupt the much larger $221bn video games industry when companies settle on the right growth strategies. Meanwhile, in 2022, services with exclusive games and reasonable pricing will see faster adoption than others.
5G adoption will increase steadily in 2022, driven by the Asia-Pacific market. North America will have the highest 5G penetration by population in 2022, increasing faster than any other region, to 115% by 2025. However, the Asia-Pacific region will lead in 5G subscriptions in 2022. 5G fixed wireless access will be gradually deployed in 2022, especially for consumers in harder-to-reach areas in developing countries, but increasingly for urban and suburban consumers who are working from home more often.
The robotics industry will be worth $568bn by 2030, up from $45bn in 2020, according to GlobalData. The robotics industry comprises two main areas: industrial robots and service robots. Industrial robots are used in factories to automate parts of the manufacturing process and include caged industrial robots and cobots. Service robots assist humans at work in non-industrial settings or in the home and include logistics, medical, consumer and field robots. Although the service robot market was larger than the industrial robots sector in 2020, the industrial robot market is set to grow faster over the next decade.