Technology Investment Trends to Watch
Technological developments are playing a critical role in the national and global economy. Because they create more value for investors and consumers alike, technology companies are increasing their investments in the sector as they endeavor to remain competitive and boost their bottom line. For investors, it pays to keep abreast of the developing investment trends that are shaping the technology industry.
As innovation continues, technology companies and those that rely heavily on technology are owning more hardware and software, and getting bigger. Some of the industries that are setting the pace and are likely to see the most disruption include healthcare, banking, and the financial services sector. For example, according to the GlobalData predictions report, artificial intelligence (AI) is expected to have a more practical and increased role over the coming years.
In 2025, the AI market is projected to be worth $190 billion, up from the $67 billion recorded in 2021. Those businesses that are not already investing in AI should consider venturing into sectors like smart robots, machine learning, context-aware computing, data science, computer vision AI chips, and conversational platforms.
In the largely uncharted realm of the metaverse, investments are expanding quickly as the concept has captured the imagination of companies and investors both in and outside of the technology industry. According to data from Bloomberg Intelligence, by 2024, global investment in the metaverse might hit $800 billion. The metaverse is a fast-expanding virtual world where online users interact and share experiences in real time within digitally simulated scenarios.
Metaverse cannot operate without blockchain technology. This is a system that records digital transactions in a decentralized, publicly accessible ledger or database secured by encryption. Blockchain technology facilitates the purchase of cryptocurrency and other digital assets such as music or artwork, also known as non-fungible tokens (NFTs). With the technology enabling metaverse monetization, companies are venturing into the sector hoping to leverage the growing digital industry.
Major technology companies are also expanding their online platforms to accommodate users who want to work, socialize, or play games online. In addition, leading consumer enterprises are creating non-fungible tokens to sell. Brands with platforms that are already selling digital real estate are also designing online versions of their outlets. Generally, creating metaverse versions of goods or shops is cheaper than creating physical products or spaces, something that brands and content creators can leverage.
Venture departments of big tech enterprises are also active investors in the tech domain. Even as the global economy, including the healthcare sector, felt the impact from COVID-19, venture funding for healthcare innovators almost doubled in 2020 compared to what was achieved in 2019. In 2020, for example, health tech innovators’ venture funding hit a record $14 billion.
In 2017, for instance, UnitedHealthcare Group launched Optum Ventures, its venture capital arm. Although compared to its peers Optum Ventures is a relatively late entrant, it has proliferated. Beginning with four investments and a $250 million fund, Optum Ventures has so far invested over $600 million in 31 innovators. Optum Ventures was among the most active capital venture participants in 2020, investing in 18 innovators.
The COVID-19 pandemic accelerated venture funding for healthcare innovators with alternative approaches to service delivery such as virtual health and remote monitoring. According to Deloitte, in 2020, innovators focused on care delivery models generated a record $6.4 billion. Even as in-person hospital visits resume, virtual health is likely to continue to be strong post-pandemic. Major focus areas beyond the COVID-19 era will likely include on-demand health, fitness, and mental health care services outside of traditional care settings.
