At the beginning of each new year, we conduct research and reflect on how digital technology will continue to evolve over the course of the year ahead. This past year, we observed clear trends in a number of technical areas including machine learning, hyperautomation, Web3, metaverse, and blockchain.
Broadly speaking, artificial intelligence (AI) continues its growth in influence, adoption, and in spending. As compared to five years ago, business adoption of AI globally in 2022 has increased by 250%. At enterprises, AI capabilities such as computer vision, natural language understanding, and virtual agents are being embedded across a number of departments and functional areas for a variety of use cases.
As the world looks past the global pandemic with an eager eye on the horizon, enterprises and governments are adjusting to the new reality with the help of innovation and advanced technologies. 2023 will be a crucial year for organizations interested in gaining and maintaining their competitive edge.
Here are key digital trends at the forefront in 2023 and beyond.
The artificial intelligence market has been on a rapid growth trajectory for several years, with forecasted market size of a whopping $1.8 trillion by 2030. Ever since the launch of AI as a field at the seminal Dartmouth Conference in 1956, the story of AI evolution has been centered around helping data scientists and the enterprise better understand existing data to improve operations at scale. This type of machine intelligence falls under the category of analytical AI which can outpace our human ability to analyze data. However, analytical AI falls short where humans shine—creativity. Thanks to new advances in the field, machines are becoming increasingly capable of creative tasks as well. This has led to a fast-emerging category referred to as generative AI.
Leveraging a number of advanced deep learning models including General Adversarial Networks (GANs) and transformers, generative AI helps produce a multitude of digital content. From writing to creating new music, images, software code, and more, generative AI is poised to play a strong role across any number of industries.
In the past, there has been fear over the prospect of AI potentially overtaking human capital and ultimately putting people out of work. That said, similar to other disruptive technologies in the past, analytical AI and generative AI can both complement human-produced output, all in the interest of saving time, effectively bettering lives for us all.
Hyperautomation, as predicted last year, continues to be one of the most promising technologies as it affords enterprises several advantages to ultimately improve operations and save valuable time and resources.
Think of hyperautomation as intelligent automation and orchestration of multiple processes and tools. It’s key in replacing many rote, low-level human tasks with process and workflow automation, creating a more fluid and nimble organization. This enables teams and organizations to adapt quickly to change and operate more efficiently. The end result is increasing the pace of innovation for the enterprise.
With hyperautomation, workflows and processes become more efficient, effectively reducing speed to market with products and services. It also reduces workforce costs while increasing employee satisfaction. Hyperautomation can help organizations establish a baseline standard for operations. When standards are defined, organized, and adhered to, it allows for continual audit readiness and overall risk reduction with those audits. This becomes a centralized source of truth for the business.
Globally, the hyperautomation market is expected to continue expanding with diverse business applications, growing from $31.4 billion in 2021 with a CAGR of 16.5% until 2030.
Not to be confused with cryptocurrencies like Bitcoin or Ethereum (which are built using blockchain technology), blockchain continues to gain adoption as both an implemented technology and a topic of strategic discussion for organizations large and small.
When implemented effectively, blockchain technology has many uses and can provide a number of valuable benefits ranging from increased transparency to accurate transaction tracking, auditability, and overall cost savings for the organization. Blockchain technology appears even more promising when considering its implications as a solution to improve trust between parties such as customers, vendors, producers, wholesalers, regulators, and more. Therefore, enterprise investments in blockchain technology to improve business processes “may offer significantly higher returns for each investment dollar spent than most traditional internal investments.”
It is estimated that blockchain’s potential economic impact on global GDP could exceed $1.75 trillion and enhance 40 million jobs by the end of this decade. Much of this impact is likely to stem from the improved trust which blockchain technology can enable between businesses relating to trade, transaction management, and more. Further, perhaps due in large part to its open and decentralized nature, this economic impact is unlikely to be focused solely on specific regions or dominated by specific nations, with the U.S., Asia (led by China), and Europe all poised to contribute.
Financial services is well positioned to continue as the blockchain leader among industries, as it has in recent years. However, as blockchain technology becomes more prolific, the enterprise landscape is likely to witness major adoption in other areas including healthcare, logistics, legal, media, supply chain, automotive, voting systems, gaming, agriculture, and more. In fact, in 2021 alone, funding for blockchain startups rose by 713% YoY.
With regulatory challenges surrounding digital assets, along with abundant news focused on high profile collapses of cryptocurrency exchanges such as FTX, enterprises are still approaching blockchain adoption cautiously. However, like any technology, blockchain is fast redefining itself as more than just the tech behind Bitcoin. It is emerging as a dominant focus area for digitally-minded organizations.
Web3 (or Web 3.0) represents the next generation of web technologies. It’s decentralized and permissionless, allowing everyone to access, create, and own digital assets globally, without any intermediary. Effectively, this levels the global playing field and brings us back to the original promise of the World Wide Web.
Web 1.0 was the original Web, dominated by static pages and content. In the early days, there were relatively few content creators and publishers. The Web was fairly limited and disorganized back then, but quickly evolved to Web 2.0 which ushered in a new era of digital interactivity and social engagement with innumerable applications. With this new Web, people were free to publish articles, share comments, and engage with others, creating the user-generated content explosion we experience today. But despite enormous success, Web 2.0 has created serious challenges. For example, user data is largely centralized, controlled, and monetized by only a few big tech monopolies.
Web3, along with the underlying blockchain technology that enables it, aims to address these challenges by decentralizing information systems, giving control of data and standards back to the community. This shift from Web 2.0 to Web 3.0 also opens doors to new business models such as those governed by decentralized autonomous organizations (DAOs) that eliminate intermediaries through secure (smart contract) automation.
Web3 has attracted large pools of capital and engineering talent, exploring new business models as the industry is estimated to increase significantly to $33.5 billion, growing at a CAGR of 44.9% from 2022 to 2030. As with any burgeoning technology disruption, early adopters will almost certainly face challenges, including unclear and evolving regulation and immature and emerging technology platforms.
In 2023 and the years ahead, policy changes are expected, impacting Web3 creators in several ways. New legislation is likely to focus on asset classification, legality and enforceability of blockchain-based contracts, capital provisioning, accountability systems, and anti-money laundering standards.
From cryptocurrencies to NFTs, digital assets continue to dominate news cycles—between the public collapse of FTX (a leading cryptocurrency exchange) and dramatic and sustained drops in market value for even the largest cryptocurrencies such as Bitcoin. This market activity and awareness helps solidify digital assets as an important topic to watch in 2023.
While much of the discussion surrounding digital assets is focused on the underlying technology, blockchain, it’s the financial and regulatory considerations that are most likely to see dramatic change in the coming year. These considerations will help re-establish trust in an otherwise battered market inundated with scams, fraud, theft, hacks, and more. According to a complaint bulletin published by the Consumer Financial Protection Bureau (CFPB), a U.S. government agency, of all consumer complaints submitted in the last 2 years related to crypto-assets, “the most common issue selected was fraud and scams (40%), followed by transaction issues (with 25% about the issue of ‘Other transaction problem,’ 16% about ‘Money was not available when promised,’ and 12% about ‘Other service problem’).”
Some regulators contend that the very definition of “digital assets” may need to evolve as major regulatory bodies struggle to provide clear and consistent guidance for the sector. Leading the way in digital asset regulation is the European Union. Shortly after the collapse of FTX, Mark Branson, president of BaFin (Germany’s financial market regulator), suggested that “a ‘crypto spring’ may follow what has been a ‘crypto winter’ but that the industry that emerges is likely to have more links with traditional finance, further increasing the need for regulation.” Thoughtful regulation can help establish trust in digital assets, beginning with risk management. An important method of rebuilding this trust is providing third-party validation of assets, liabilities, controls, and solvency. This is expected to be an important area of growth in 2023.
Organizations and governments are also looking to traditional (non-blockchain) financial services, standards, and providers to design security, controls, governance, and transparency with regard to digital assets. The early rise of central bank digital currencies (CBDCs), which are non-crypto assets, in countries such as Venezuela, Russia, China, and Iran, has pushed these countries to “adopt restrictive stances or outright bans on other cryptos.” Conversely, adoption of CBDCs by G7 countries has been “deliberately cautious […] particularly with regards to retail CBDCs used by the public.” Going forward, policymakers will continue to wrestle with these types of important regulatory considerations. They will assess how existing rules can be applied more effectively and design new rules to reinforce trust in the market without hamstringing innovation in the space.
Aside from regulatory changes, digital assets are likely to continue growing through demand driven by merchants and social media. For example, as some social media companies gradually release their own payment platforms for end users, the potential for new types of digital assets is only expanding—from processing cryptocurrency transactions to offering unique value through identity tokens, NFTs, and more. Additionally, with anticipated growth of metaverse and Web3, digital assets are poised to play an outsized role in developing consumer trust, generating tangible value, and promoting engagement in these new technical arenas.
The metaverse is often seen as the next natural evolution of the Internet. Despite challenges facing the metaverse—from technology to user experience—the space is benefiting from continued venture investments and growing attention from notable brands and celebrities. “Brands from Nike and Gucci to Snoop Dogg and TIME Magazine poured money into metaverse initiatives as a way of revolutionizing experiential brand engagement, while Meta doubled down on its Horizon Worlds experiment.”
Further, with a potential to generate up to $5 trillion in economic impact across multiple industries by 2030, the metaverse is too important to ignore. To ensure truly immersive experiences in the metaverse, a significant boost in demand is expected for a number of technical and creative services. In support of the metaverse, specialty services provided by digital designers, architects, software and machine learning engineers, to name a few, are predicted to remain in high demand in 2023 and beyond.
Use of specialized hardware such as AR (augmented reality), VR (virtual reality), MR (mixed reality) glasses and headsets is not strictly required to experience the metaverse. However, advancements in AR, VR, MR, and haptic technologies can dramatically improve the experience, which is likely to drive further engagement and adoption of the metaverse.
Part of the projected growth in the metaverse is born out of necessity. During the early days of the global pandemic, the majority of companies suddenly had to become comfortable with virtual collaboration and meetings via web conferencing. Virtual workspaces in the metaverse are a natural next step, driven by brands and corporations. By 2026, one out of four of us is expected to spend at least an hour each day in a metaverse. Further, nearly one third of organizations in the world are projected to have some sort of product or service ready for the metaverse.
In the metaverse, virtual spaces can be used for onboarding, brainstorming on-the-fly, and ongoing education and training. With high quality and immersive 3D experiences, the metaverse can allow for design and engineering collaborations—for example, the ability to realize concept designs in a virtual world before any expense is spent on real-world production. For brands, the metaverse will also see spaces created (almost as digital lounges) where enthusiastic evangelists can hang out and be part of virtual experiences, develop their own brand-centric communities, and participate in brand contests.
The explosion of digital networks, devices, applications, software frameworks, libraries, and the rise of consumer demand for everything digital has brought the topic of cybersecurity to the fore. Cybersecurity attacks in recent years have risen at an alarming rate. There are too many examples of significant exploits to list in this article, however, the Center for Strategic & International Studies (CSIS) provides a summary list of notable cybersecurity incidents where losses by incident exceed $1 million. CSIS’s list illustrates the rise in significant cyberattacks, ranging from DDoS attacks to ransomware targeting healthcare databases, banking networks, military communications, and much more.
Cybersecurity is a major concern for the private sector with 88% of boards considering it a business risk. On a broader scale, cybersecurity is considered a matter of national and international security. In 2018, the U.S. Department of Homeland Security established Cybersecurity & Infrastructure Security Agency (CISA) to lead “the Nation’s strategic and unified work to strengthen the security, resilience, and workforce of the cyber ecosystem to protect critical services and American way of life.” As more “sophisticated cyber actors and nation-states […] are developing capabilities to disrupt, destroy, or threaten the delivery of essential services,” the critical risks of cybercrime are felt not just by government agencies, but also by commercial organizations which provide those essential services.
The fast-evolving field of autonomous cyber is a direct response to this growing problem. As computer networks and physical infrastructure grow more vulnerable to cyber threats, the ability for traditional approaches to cybersecurity are proving insufficient. Today’s enterprises require smart, agile systems to monitor and act on the compounding volume of cyber activity across an ever-growing number of undefended areas (in codebases, systems, or processes). Further, as cybercriminals become more sophisticated with modern tools and resources, organizations are feeling the added pressure to fortify their digital and physical security operations quickly in order to ensure resiliency.
Autonomous cyber uses AI and machine intelligence to continuously monitor an enterprise’s digital activity. Advanced machine learning models can help identify abnormal activity which may present risk to an organization’s IT systems or any aspect of business operations. Coupled with the notion of CEOs creating corporate resilience to protect themselves from cybercrimes, among other threats, the atmosphere seems welcoming for embracing more complex security technologies such as AI-powered autonomous cyber. Autonomous cyber uses intelligent orchestration and complex automation to create alerts and take mitigation steps at speed and scale.
At Entefy we are passionate about breakthrough computing that can save people time so that they live and work better. The 24/7 demand for products, services, and personalized experiences is forcing businesses to optimize and, in many cases, reinvent the way they operate to ensure resiliency and growth.
AI and automation are at the core of many of the technologies covered in this article. To learn more, be sure to read our previous articles on key AI terms, beginning the enterprise AI journey, and the 18 skills needed to bring AI applications to life.
Entefy is an advanced AI software and process automation company, serving SME and large enterprise customers across diverse industries including financial services, health care, retail, and manufacturing.