The past few years have been characterized by widespread instability, including the COVID pandemic, economic turbulence, and geopolitical conflict. However, this uncertain landscape has also presented a unique opportunity to re-evaluate and modernize the way we conduct business. Making predictions about the future, especially when it comes to technology, is a challenging endeavor. But one thing is for sure in 2023: organizations will face an increasing demand for innovative and powerful technologies. As we journey into the future, it would be wise to keep a lookout for the continuation of innovations and developments in technologies such as Artificial Intelligence, the Internet of Things, 5G networks, Edge Computing, Extended Reality, Metaverse, Blockchain, Quantum Computing, and Green Tech. Our 2023 Tech Forecast highlights the top trends that are set to transform business and society, providing you with valuable insights and opportunities to plan and adapt.
ARTIFICIAL INTELLIGENCE (AI)
Artificial Intelligence is a technology that uses rule-based techniques and machine learning techniques to develop computer systems that can perform tasks typically requiring human intelligence. AI has already made a noticeable presence in our daily routines, from e-commerce to the algorithms used in social media. Its exceptional image and speech recognition capabilities, navigation software, and smartphone personal assistants have solidified its reputation.
One of the most prominent advancements of the technology in 2022 was the introduction of ChatGPT, an NLP-transforming neural network. NLP is a type of AI that focuses on enabling computers to understand, interpret, and generate human language. ChatGPT can generate coherent responses in dialogue with a person and its creator OpenAI states that the algorithm can answer follow-up questions, learn from feedback, and correct incorrect assumptions.
The technology will obviously continue to evolve in 2023, becoming more sophisticated and capable of handling more complex tasks. And we expect to see more AI-powered products and services of different types, including NLP, machine-learning, and deep-learning types, being introduced in 2023 in various industries, especially in sectors such as healthcare, marketing, IT, transportation, finance, and manufacturing. According to the Grand View Research report, the global artificial intelligence market size was valued at USD 136.55 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030.
INTERNET OF THINGS (IoT)
The Internet of Things (IoT) refers to billions of connected physical devices collecting and sharing data through the Internet. In fact, any physical object can become part of the IoT by adding internet connectivity and sensors, giving the device digital intelligence to communicate real-time data without human interaction. It is worth noting that the term is mainly used for devices not typically expected to have internet connections and capable of communicating independently. Thus, for instance, PCs and smartphones are not considered IoT devices.
The growth of the IoT is mainly due to the availability of low-cost computer chips and sensors and the widespread implementation of high-bandwidth wireless and cellular networks. These advancements, combined with sophisticated machine learning algorithms and the rise of cloud computing, have made it possible to render quick data analysis and store, transfer, and analyze vast amounts of data easily. The benefits of IoT are already evident in our daily lives. For instance, we can switch on our robotic vacuum cleaner and regulate the heating in our apartment with our phones.
The IoT has applications varying from smartwatches to smart homes or smart city infrastructures. Based on the end user industry, they are usually segmented into building and home automation, smart energy and utilities, manufacturing, retail, healthcare, transportation, logistics, government, and insurance. The most significant IoT segments by revenue in 2022 were reported to be consumer media and internet devices, connected vehicles, payment terminals, asset tracking and monitoring, and inventory management and monitoring.
Number of Internet of Things (IoT) connected devices worldwide from 2019 to 2021, with forecasts from 2022 to 2030
IoT technology will continue to grow and expand in 2023, connecting more devices and systems to the Internet. Despite the current chip shortage caused by the COVID pandemic and general supply chain disruptions, Statista forecasts that the number of IoT devices worldwide will grow from 13.4 billion in 2022 to more than 29 billion in 2030, while the global IoT market size is projected to reach USD 650.5 Billion by 2026. IoT technologies will likely be used with other technological trends like AI and 5G to deliver countless smart solutions relating to predictive maintenance, improved medical care, customer service, and enhanced home automation that we have never imagined before. On top of that, the vast amount of data generated from IoT devices is a crucial step towards an entirely data-driven society. It will result in datafication of different industries, leading to the growth of various analytics such as workforce, product behavior, transportation, health analytics, etc.
The advancement of IoT technology is set to be complemented by the introduction of 5G networks, a fifth-generation technology standard for broadband cellular networks, taking the benefits of the Internet to a whole new level. While 4G technology has already transformed how we use the Internet, 5G promises to revolutionize our lives by enabling new use cases such as autonomous vehicles, AR, VR, and cloud-based gaming. The main difference between 4G and 5G is latency. While 4G latency ranges from 60 ms to 98 ms, 5G promises low latency, under 5 ms, and better bandwidth.
Number of cities in which 5G is available 2022 by country
The first nation to adopt a 5G network on a large scale was South Korea in April 2019. Now the US and China are significantly ahead of other nations in deploying the 5G network, but its roll-out in other countries is likely to accelerate in 2023. A Swedish multinational networking and telecommunications company Ericsson predicts 5G mobile subscriptions to reach 5 billion in 2028.
This emerging technology trend has the potential to impact various industries, including healthcare, automotive, manufacturing, entertainment, retail, energy, and public safety. With 5G, users can expect lightning-fast video streaming and minimal lag times, providing an uninterrupted experience on social networks and online services. 5G allows for the support of up to one million devices per square kilometer, enabling the widespread implementation of IoT solutions. 5G will enable remote patient monitoring, telemedicine, and telehealth services in healthcare, connected cars and autonomous vehicles in the automotive industry, virtual and augmented reality experiences in entertainment, smart retail, improved efficiency and control in smart grid systems, and secure communication network for emergency services in public safety. The possibilities for innovation and growth with 5G will continue to expand as the technology evolves.
Cloud computing adoption continues to gain momentum, with more and more organizations transitioning to this solution. However, the exponential growth of generated data, for instance, by the constantly rising number of IoT devices, brings to the table the necessity to somehow deal with this amount of data. Development of IoT and 5G technologies are followed by Edge computing evolvement. Edge computing involves processing data at the edge of a network, near the source, instead of in a centralized data center, eliminating latency and providing real-time responsiveness. Low latency enables instantaneous communications, allowing millions of connected devices to communicate at speeds that are 400 times quicker than a human eye blink.
Edge computing is already a part of our daily lives through devices such as smart speakers, watches, and phones, which collect and process data locally. It is also used in industries such as smart utility grid analysis, oil rig safety monitoring, and drone-enabled crop management. The combination of containers and Kubernetes provides a strong foundation for edge computing by offering essential services, persistent storage, high uptime, and seamless migration between the cloud and edge environments.
In 2023, edge computing will continue to drive innovation with its speed, low latency, cost-effectiveness, security benefits, and data management capabilities that the centralized servers and the cloud will not be able to compete with. So, more businesses are expected to turn to edge computing to ensure seamless operation and high performance in all locations. Edge computing, coupled with the deployment of strong internet infrastructure like 5G, opens up new possibilities for smart cities, self-driving cars, remote telesurgery, next-generation CDNs, network function, 5G virtualization, game streaming, and more, delivering faster and more innovative digital experiences. The Precedence Research reports that the global edge computing market size was estimated at USD 45.53 billion in 2022 and it is projected to surpass around USD 116.5 billion by 2030 at a compound annual growth rate (CAGR) of 12.46% during the projected timeline. While new methods and structures for managing edge technology may still be in their early stages, they are worth paying attention to.
EXTENDED REALITY (XR)
XR serves as an umbrella term for the different forms of digital and virtual experiences, covering Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR). VR refers to a wholly computer-generated environment that is designed to simulate a real-world experience with a completely artificial environment. AR, on the other hand, adds digital elements to the real world, while MR combines both the real and virtual worlds in a way that they can interact with each other. XR allows users to experience digital content in a more immersive and interactive way by blurring the lines between the physical and digital worlds.
XR technology is already being utilized in various aspects of our daily lives. For instance, many smartphone users have experienced Augmented Reality (AR) through apps such as Pokemon Go, which superimposes virtual creatures in the real world through the camera. Additionally, AR apps like IKEA Place and Snapchat offer AR filters and lenses, allowing users to preview furniture and add interactive elements to their photos. Retailers are also utilizing XR technology to create more engaging shopping experiences, such as allowing customers to virtually try on clothes or makeup using AR. In the healthcare field, XR technology is being used to provide immersive and interactive training experiences for medical professionals and physical therapy for patients. Education is also utilizing XR technology to create more interactive and engaging learning experiences, such as using VR headsets for virtual field trips and AR to bring digital content into the classroom. These are just a few examples of how XR technology is already a part of our daily lives.
According to the Precedence Research report, the global XR market size reached USD 35.14 billion in 2022 and is projected to hit around USD 345.9 billion by 2030, growing at a CAGR of 33.09% during the forecast period. By Type, the augmented reality (AR) market segment captured more than 55% in 2021. As we move into 2023, it is becoming increasingly evident that XR technology will play a more significant role in our daily lives, and we can expect to see even more innovative applications of this technology as it continues to develop and revolutionize fields such as training, entertainment, education, marketing, etc. The possibilities are endless, and the potential is enormous.
The advancement of XR entails the evolution of the Metaverse, a virtual collective 3D shared space created by the merging of physical and digital reality. This new frontier in technology is essentially a network of 3D virtual environments that promote social interaction, allowing people to work, play, shop, and socialize similarly as they would in real life or, more precisely, on the Internet. XR plays a key role in its development by providing the means for users to access and interact with virtual environments in real time.
While the Metaverse is still in its infancy, some early examples can be seen in video games such as Fortnite. In April 2022, Epic Games, the creator of Fortnite, announced it had raised $2 billion to invest in the Metaverse and build the future of digital entertainment.
Strategic market research reports that the global metaverse market size was valued at USD 47.48 billion in 2022, with a projected growth rate of 39.44% CAGR to reach USD 678.80 billion by 2030, showcasing its significant economic potential. The Metaverse presents businesses with a unique opportunity to create fully-realized 3D digital experiences that blend simulated and real-world elements, making it possible for users to participate in activities such as virtual shopping, socializing through avatars, visiting museums, or attending virtual classrooms, all from the comfort of their own homes.
Gartner predicts that the complete Metaverse will be independent of devices and not controlled by any single vendor. It will have its own virtual economy powered by digital currencies and non-fungible tokens (NFTs). It also forecasts that by 2027 over 40% of large organizations worldwide will use a combination of Web3, AR cloud, and digital twins in Metaverse-based projects aimed at increasing revenue. There is a growing belief among experts that the Metaverse will become the successor to the Internet, allowing for real-time communication and engagement between users, attendance at virtual events, and conducting business within a shared three-dimensional space. As the Metaverse continues to grow and develop, it is clear that it will significantly impact how we interact with the digital world in the near future.
Blockchain technology made its debut with the introduction of Bitcoin cryptocurrency in 2009. At its core, blockchain is a type of data that can only be appended to, not altered or deleted. The term "blockchain" refers to the fact that the data is organized in a chain-like structure, with each block of data building upon the previous one. The immutability and consensus-based nature of blockchain make it highly secure, eliminating the need for a trusted third party to validate transactions.
The blockchain and cryptocurrency industry faced significant challenges in 2022, with declining token prices and NFT values, increased trading volatility, and the collapse of notable centralized crypto firms. TerraUSD and LUNA's collapse in the early months of the previous year resulted in a ripple effect on the crypto market, leading to the downfall of Celsius, 3AC, Core Scientific, and BlockFi. The market downturn continued with the failure of FTX, one of the largest global cryptocurrency exchanges, in November 2022, followed by collapse of Babel Finance, Zipmex, Hodlnaut, and Genesis. This period of market instability, known as "crypto winter," led to decreased trust in the blockchain. The future of cryptocurrencies in 2023 remains a topic of discussion among investors, traders, and analysts, with some predicting an uncertain future while others seeing signs of recovery, with new tokens like MEMAG, FGHT, CCHG, TARO, and RIA entering the market and representing a new generation of cryptocurrencies with tremendous investment potential.
But what is more important, blockchain technology is often associated only with cryptocurrencies, while its security features can be utilized in various industries, including finance, supply chain management, healthcare, and many others, fundamentally changing how we live and work in the future.
The Grand View Research estimated the global blockchain technology market size at USD 10.02 billion in 2022 and expects it to reach USD 17.46 billion in 2023. Gartner predicts that blockchain will significantly impact various industries, adding over $176 billion in commercial value by 2025 and $3.1 trillion by 2030. As we move forward into 2023, the use of blockchain technology is expected to continue growing. Its ability to prevent fraud and cyber attacks, streamline transactions, and secure sensitive data will find new use cases in data tracking, digital identity verification, billing systems, sales processes, health records management, medical data protection, and more.
Quantum Computing is an entirely new type of technology. It is a form of computing based on the principles of quantum theory and uses quantum bits, or qubits, to perform computational tasks. It operates by harnessing the properties of quantum mechanics, such as superposition and entanglement, to perform computations at much higher speeds than classical computers. Unlike classical computers that use bits with binary values of 0 or 1, qubits can exist simultaneously in multiple states, allowing quantum computers to perform various calculations in parallel, making quantum computing particularly well suited for solving complex problems.
Quantum computing has enormous potential in various fields, including simulating molecules and chemical reactions for drug discovery, accelerating machine learning algorithms, optimizing transportation and logistics systems, modeling financial data, analyzing the Earth's climate and weather patterns, and many more. It may also lead to developing new encryption techniques and potentially break current security system encryption. However, these applications are still mainly in the research stage and require further development before they can be implemented. A recent study by the University of Sussex, Universal Quantum, and Qu&Co published in January 2022 in AVS Quantum Science suggested that breaking Bitcoin's cryptography would require quantum computers to be a million times faster.
In the past few years, quantum computing has gained significant attention, driven by notable advancements in the field and increased investments. It achieved some significant milestones, including building industrial quantum computers and launching cloud-based quantum computing services. For instance, IBM, a world leader in quantum computing research and development, has become the first to offer cloud-based quantum computing access and is continuing to release new versions of its quantum computing technologies. It released a 433-qubit processor called Osprey in November 2022 and plans to release a 1,121-qubit processor called Condor to succeed it in 2023. In November 2022, it was reported that Finland's VTT Technical Research Centre of Finland successfully connected its 5-qubit quantum computer, HELMI, with the LUMI supercomputer hosted by CSC. This integration paves the way for future hybrid computing projects where traditional high-performance computers and quantum computers work together to solve complex problems that neither could solve alone. The successful connection between HELMI and LUMI enables the development of quantum algorithms and software, allowing for a better understanding of the technology's potential in solving real-world use cases. Other companies such as Rigetti & Co, Inc., QRA Corp, Cambridge Quantum Computing Ltd., QxBranch, Inc., Google, D-Wave Systems Inc., and QC Ware Corp are expected to play a significant role in driving the growth of the quantum computing market.
According to the Market Research Future report, the quantum computing market was valued at around $372.9 million in 2022 and is projected to reach $419 million in 2023. By the end of 2033, the market is expected to reach $1.505 billion. Although the technology is challenged by the complexity of quantum computing implementations and the high cost of quantum computing solutions, the breakthroughs mentioned above signal clear progress toward the future maturity of quantum computing.
RENEWABLE ENERGY AND SUSTAINABLE TECHNOLOGIES
There is a global consensus to prioritize environmental sustainability, and we already drive electric or battery-powered vehicles and use renewable energy sources like solar power in homes. However, the issue has become increasingly urgent due to the ongoing energy crisis triggered by Russia's invasion of Ukraine, causing chaos and inflation in Europe and the world in general. Higher fossil fuel prices and the benefits of domestically generated energy are leading many countries to strengthen policies supporting renewables. Renewable energy is energy that comes from naturally replenishing sources, such as solar energy, wind energy, geothermal energy, and hydroelectric power. Unlike finite fossil fuels, which can be depleted over time, renewable energy sources are considered sustainable because they can be replenished and will not run out.
As countries continue to grapple with unstable oil and gas markets in 2023, they will likely redouble efforts to create a cheaper, cleaner, and more secure energy system within their border. Green hydrogen is a promising solution that has become part of the global strategy to significantly reduce emissions in industries such as transportation and switch to renewable energy sources. In combination with electric cars, hydrogen engines are poised to become the primary alternative to diesel vehicles. "Green" hydrogen is produced using environmentally friendly methods that exclude nuclear energy and natural gas. The most harmless method is through electrolysis, where an electric current is passed through water, eliminating 830 million tons of harmful carbon dioxide emissions annually caused by non-environmentally friendly hydrogen production. Floating wind technology maximizes coastal winds and revitalizes local communities while bringing energy production closer to consumption centers. In combination with artificial intelligence, it is possible to optimize the benefits of wind and solar power through predictive maintenance. Early detection of issues and timely intervention can prevent failures and yield significant cost savings.
The International Energy Agency Renewables 2022 report predicts that renewable energy expansion might grow much faster over the next five years than previously anticipated, with an estimated growth of almost 2,400 GW in capacity by 2027. It also estimates that the share of energy produced globally by renewables will increase from 28% in 2021 to over 38% by 2027. Ember, an environmental non-profit think tank that advocates for the reduction of coal use, reports that despite the supposed increase in coal and gas usage during the energy crisis, the opposite occurred, at least in the electricity sector, renewables fulfilled all of the growth in global electricity demand in the first half of 2022, halting the rise in fossil fuels.
It is worth mentioning that geopolitical tensions are causing economic difficulties in all sectors. And the energy market is no exception. It is facing numerous uncertainties in the coming year and beyond, which may inhibit investments in the field. The World Energy Investment 2022 report indicates that there is a significant increase in global clean energy investment, which is expected to exceed $1.4 trillion in 2023. This investment is anticipated to account for almost three-quarters of the overall growth in global energy investment. But it is still far short of the levels that – according to the IEA's landmark Net Zero by 2050 Roadmap – would be sufficient to meet the rising demand for energy services in a sustainable way. Thus, governments are forced to offer a more effective and sustainable response to the current crisis that requires not only implementing emergency policies and regulatory reforms to combat the energy crisis itself, but also prioritizing and expediting investment in clean energy transitions. The most notable responses in this direction so far include the US Inflation Reduction Act, the EU's Fit for 55 package and REPowerEU, Japan's Green Transformation (GX) program, Korea's aim to increase the share of nuclear and renewables in its energy mix, and ambitious clean energy targets in China and India.
To sum up, in 2023, the potential for technological advancements is vast, and businesses must adapt to the evolving landscape to stay competitive. Although the future remains uncertain, taking an innovative and proactive approach can help organizations stay ahead and succeed in a rapidly changing technological environment. At the same time, it's important to remember that while exploring the latest technological trends, we should not overlook the existing technologies that are already at our disposal. These technologies provide us with abundant opportunities to address the changing needs of society and the environment. Striking a balance between embracing new technologies and leveraging the power of existing ones can lead to a sustainable and equitable future for all.
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