If – as I do – you spend a lot of time talking to the founders of early-stage companies, it’s perhaps a little too easy to form the impression that the technology revolution we’re all experiencing is driven by plucky startups armed with nothing more than great ideas, drive, determination and significant amounts of venture capital cash.
But that’s a view from a certain kind of bubble. In reality, the trends that are shaping what we’re now obliged to call the “fourth industrial revolution” are driven in large part by the activities of the world’s tech giants – the Googles, Amazons, Apples and Samsungs of the world.
At least that was my first impression on reading a new report from GP Bullhound. In its latest set of predictions for the year ahead, the London-headquartered but globally-distributed advisory and investment firm sets out what it believes will be the key developments in the digital technology marketplace in 2020. And at first glance, we are looking at a world in which the big players dominate the arena.
Witness prediction number one. As the firm sees it, 2020 will be the year in which video streaming becomes the dominant means to deliver television shows and films, supplanting broadcast television. Netflix will continue to be anchor platform but will face growing competition, not only from Amazon but also Apple and Disney. It’s worth pointing out that local players are also in this market. Here in the UK, they include Now TV and the newly-launched Britbox, but this is not really a market where the ambitious entrepreneur can hope to make a difference, except perhaps as a content provider.
Other predictions include a 5G land grab (and here we’re talking about the battle to build national infrastructure); a step-change in mobile communications, driven by the launch of Apple’s 13 chip; greater uptake of edge computing; and an increasing emphasis on corporate social responsibility on the part of major companies. Again these are changes that will be driven either by tech giants or larger businesses and public bodies engaging in digital transformation programs.
So what does all this mean this mean for early-stage tech ventures? Well, clearly there are opportunities to provide at least some of the solutions required by corporate buyers.
A.I. Goes Vertical
The evolving field of artificial intelligence and machine learning . is a case in point. According the report, 2020 will see an upturn in companies using A.I. and M.L. for very specific purposes.
“What we’re seeing is a more sophisticated approach to A.I.,” says GP Bullhound Vice President, Brandon Overmyer. “There is a focus on A.I. in verticals. For instance, in HR it’s increasingly being used in recruitment and retention of talent.”
The opportunity here is for early-stage businesses that specialise in providing solutions that use A.I. to address particular problems within organisations.. Overmyer cites the example of DarkTrace, a cybersecurity business that has grown rapidly, with A.I. as a part of its armoury.
On The Edge
And according to the report, rising interest in edge computing is also ripe with opportunity. Essentially, the term edge computing refers to a way of doing things that sees data being processed close to the source of that information. As such, it provides an alternative – or at least a complement – to a world where everything is stored and processed in the cloud – a market currently dominated by the likes of IBM, Amazon and Microsoft. GP Bullhound says there is scope here for new players to offer infrastructure and software solutions in the expanding edge computing space.
The Generation Game
In contrast, entrepreneurial companies might want to adopt a cautious approach to any plans to offer products or services based around 5G mobile communications. The report says 2020 will be the year when hardware companies fight for contracts. And of course, this may be controversial. China’s Huawei is a 5G technology leader but it may ultimately be excluded from some markets – including the U.K. because of hotly-disputed claims that there is an espionage risk. “Next year will be about the land grab – it will be about the technology,” says Overmyer.
And even if and when the hardware supply issues are resolved there may be planning obstacles. For example, according to GP Bullhound, London’s local government bodies have not, for the most part, formulated plans to enable infrastructure to be set down.
Europe Leads In CSR
But if it’s not quite full speed ahead for 5G, next year could be a good year for businesses working in the field of sustainability – particularly in Europe.
As GP Bullhound sees it, Corporate Social Responsibility issues loom larger on the radar screens of major European businesses than is the case elsewhere in the world. “Europe is leading the way, says Alec Dafferner, who heads up the firm’s San Francisco office. “That is due in part to the sophisticated regulatory landscape.” One of the key opportunities lies in the area of supply chain management.
So there are many gaps for tech startups to fill. But the challenge facing founders is to identify the problems that need to be solved and to get the timing right.