Industry Trends & Challenges

High-tech companies face a number of opportunities and threats to their businesses. The companies best placed to deal with a challenge will consider it as an opportunity, whilst those poorly prepared will face the challenge as a threat.

Before the COVID-19 crisis, there were several trends that high-tech companies were responding to. Some of those have accelerated because of COVID-19 and are likely to continue over the coming years. Those include:

• Internet of Things – the ‘Internet of Things’ (IoT) refers to products, devices or components, which have the capability to connect to the internet and sense or interact with the world around them
• 5G Communication – the roll-out of 5G wireless communication requires new communications equipment both at the network and device level
• as-a-service – the transition of business models from delivery of a product into an “as-a-service” model, paid for by subscription or based on usage
• next-generation automotive – automotive manufacturers are making substantial investments in a transition to electric vehicles and also advanced driver assistance systems
• cyber security – in today’s digital world, instances of espionage, hacktivism, ransomware, theft of digital intellectual property, and other forms of cyber intrusion have escalated to the point where public and private organizations are having to repel thousands – and sometimes even more – hacking attempts each and every day.

Rapid technological progress means that products often have a relatively short life – around one to three years from market introduction to the peak in sales revenues. Consequently, high-tech companies must be adaptable and responsive to both changes and advancements in technology and also changes in consumer demands and requirements.

To stay relevant and competitive, high-tech firms must:

• adopt a constant stream of technological advances
• reduce manufacturing and distribution costs
• speed up the time it takes to make and deliver their products.

What is the current position of the high-tech industry?

In 2022 cloud computing and artificial intelligence will continue to dominate the high-tech industry, but edge computing will likely grow in importance. Many companies are motivated to move to cloud computing because it can reduce costs, optimise processes, and enhance flexibility.

Edge computing and 5G connectivity create a reusable and versatile platform that supports the full potential of connectivity and computing capabilities for advanced technologies such as AI. This has the capability to deliver value for cases that demand low latency and effective use of limited bandwidth, including:

• autonomous vehicles
• offshore oil rigs
• security and assembly line cameras

The industry is seeing a period of high investment in infrastructure in 2022 following the semiconductor shortages induced by the pandemic. However, high-tech plants are extraordinarily expensive and require many years to build and reach peak manufacturing capacity.

Solving this supply issue will be a key goal for 2022, given the growing influence of software in not just high-tech, but a whole host of other global industries such as:

• Automotive
• Consumer goods
• Healthcare
• Machinery

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