If there’s a common thread across recent conversations about 2018, it’s that the year did not unfold as initially expected, especially in the financial markets. The US economy has been on solid footing with the lowest unemployment in decades, leading to sustained wage gains but also significant talent shortages, especially for highly skilled labor. We’ve also seen the unraveling of the once mighty GE, which has seen it’s share price decline nearly 90% from its highs, while new management seeks to streamline the business through multiple divestitures. As we look forward to 2019, it’s helpful to bear in mind that despite the turbulence that may arise in competitive industries and markets, technology costs curves continue to deliver greater power at lower prices (whether in compute, storage, solar PV or communications), creating more opportunities for innovators to create value through new projects and applications.So what’s been happening while you were sleeping?
Opportunities to harness the data dividend continue to arise from new devices, sensors and people connected to the Internet. There are over 8 billion cellular subscriptions globally (more than one per person on the planet) and the total number of connected IoT devices is headed toward 20 billion by 2020. Every second, 127 devices are connected to the Internet according to futurist Dave Evans.
Investments in IoT continue unabated as well, though at a far more measured pace than the parabolic crowdfunding that pumped up the blockchain bubble in 2017 – and which painfully deflated in 2018. Business Insider forecasts that there will be nearly $15 trillion in aggregate IoT investment between 2017 and 2025.
A Year of Pushback Against Big Tech
During 2018, there’s been growing criticism of the power of large tech firms including Facebook, Google and Amazon. The disclosures that Cambridge Analytica had been harvesting Facebook customer data created a crisis of public trusts in the social media giant. Google and Twitter also faced tough grilling in Congressional hearings, as public mood has soured against the Silicon Valley behemoths. Amazon’s size, scale and scope continue to fuel pushback about potentially monopolistic practices, as the company continues to weather complaints about treatment of warehouse workers. Most of the criticisms against Big Tech involve the use and misuse of customer data, while the rollout of GDPR (General Data Privacy Regulations) in the European Union have forced awareness of data privacy into the forefront for any business with an internet presence.
AI – Foe or Friend?
Artificial Intelligence has emerged in the forefront of public consciousness, with concerns over widespread technological unemployment top of mind. The common perception of AI has been colored by dystopian science fiction scenarios, while ethical concerns raised by the likes of Elon Musk and others create a negative public perception. The reality of AI is that the technology is being integrated across multiple industries, powering new efficiencies, increasing the productivity of works and improving safety. The jury is still out, but there are a number of forecasts that see AI as a net positive for the global economy: Gartner forecasts that AI could create over $5 trillion of additional value worldwide by 2025; Accenture foresees $7.4 trillion of additional AI-induced growth in the US alone by 2035 while McKinsey Global estimates that AI could increase economic output by 16% or $13 trillion by 2030.
Be an optimist about our Clean Future of Energy and Transportation
Perhaps the most significant developments in technology relate not to IT, but to energy and transportation. The declining cost of solar panels continues, with projects in Mexico, the United Arab Emirates and other countries promising the lowest cost per KwH of any new generation source – even natural gas. With developments in battery technology both for cars and at utility scale, the ability to expand the global footprint of clean energy generation and electric vehicles moves closer to reality. The advances in autonomous vehicles promise the first public rollout of autonomous taxi services in 2019 from Waymo and Cruise Automation in the US, delivering potentially 10X cost improvement to consumers on a per mile basis compared to private owned cars. We’ve been following these trends closely since Tony Seba’s 2014 book Clean Disruption of Energy and Transportation, and the downstream, implications of cheaper, cleaner energy and self-driving taxis promises to reshape our world profoundly – and positively. That’s a lot to look forward to.
Please join the Momenta Partners team for a special webinar that will examine top themes for 2019. This special presentation will highlight the most relevant topics related to Connected Industry and Digital Transformation with a state of the market and outlook for 2019.
You will not want to miss this event. Presenters include Ed Maguire, Jim Fletcher, Ken Forster and others from the Momenta team!
Momenta Partners encompasses leading Strategic Advisory, Talent, and Investment practices. We’re the guiding hand behind leading industrials’ IoT strategies, over 100 IoT leadership placements, and 17+ young IoT disruptors. Schedule a free consultation to learn more about our Connected Industry practice.