Seven trends to watch in 2023
1. Protecting biodiversity
The world is waking up to the fact that protecting biodiversity is just as important for our survival on Earth as halting global warming. At the UN COP 15 summit in Montreal in December 2022, governments signed a ground-breaking deal to halt biodiversity loss by 2030. To achieve this, we will need to harness new and existing technologies to embed more sustainable practices across industries such as agriculture, forestry, IT, fishery, materials, real estate, consumer discretionary and staples, utilities and pharmaceuticals. Following COP 15, the financial sector is expected to increasingly contribute to this transition. The OECD estimates that investments aimed at protecting biodiversity stand at less than USD100 billion a year – a paltry sum, particularly when compared with what climate change attracts (USD632 billion). Expect that gap to slowly start closing in 2023.
2. High-tech cars
New technology brings disruption and opportunities to almost every industry. The auto sector is no exception. Electric vehicles are becoming ever more popular – not least thanks to the recent surge in petrol prices. 2023 will see new launches from many manufacturers, including Tesla’s iconic-looking pick-up truck. Five years from now, one in four new cars sold is expected to be fully electric.1 That, in turn, will fuel demand for batteries and semi-conductors. Automation is the other key tech shift in the car industry. While fully autonomous vehicles are still largely the stuff of science fiction, the latest models are offering ever more advanced automation features, backed by ever more complex software. China’s Baidu is even planning to launch a car with a detachable steering wheel. According to Goldman Sachs, the average length of software code per vehicle has doubled to 200 million lines in 2020, and is forecast to reach as high as 650 million lines by 2025, presenting a big growth opportunity for the tech sector.2
3. Computing at the edge
The rise of 5G and advances in AI have opened up a new era of data storage. Edge computing uses augmented reality and machine learning to analyse data at or near the place where it is gathered, or “on the edge”. It then takes advantage of super-fast transfers made possible by 5G to send that data to the cloud. When 6G comes, the process will be even faster. One of the key benefits of such an approach is low latency, which in turn opens the door to the development of new devices and applications which rely on minimal delays. Farms, for example, are starting to embrace edge-enabled ground and air sensors to monitor water and chemicals for optimal crop yields. Edge technology can benefit the environment, as it has lower carbon footprint compared to processing data on the cloud. It also creates new cybersecurity challenges and demand for solutions to address them.
4. Power of the circle
From metals and fossil fuels, to animals and crops, we are consuming a year’s worth of the Earth’s resources in just eight months, which is clearly not sustainable in the long run. The answer is to make the most of what we’ve got and make it last for as long as possible. The circular economy concept ideally envisages a world without waste – a loop whereby resources are used and reused for as long as possible. The emphasis is on creating products that are long-lasting and easy to take apart, repair, refurbish and re-assemble to make other products. The approach also involves making greater use of organic materials (such as wood in construction) that are part of a natural loop. Circular design can be applied both to consumer goods and to industry, and it’s a huge opportunity – the circular economy could unlock up to USD4.5 trillion of additional economic output, according to Accenture.3 Governments are increasingly on board. Circular economy is a key part of Europe’s Green Deal initiative, with targets for 2023 including legislation for substantiating green claims made by companies and measures to reduce the impact of microplastic pollution on the environment.4
5. Drug engineering
Drug development is notoriously slow and costly, with low chances of success. But that may be all about to change thanks to advanced computing. In one of the most exciting recent developments in the healthcare industry, DeepMind, Alphabet’s AI unit, succeeded in developing technology that can be used to predict the shape of any protein in the human body. The breakthrough potentially paves the way for much faster, cheaper and more efficient drug discovery – something Alphabet and others are now working on. Over the next decade, the market could be worth some USD50 billion, according to Morgan Stanley. 5
6. Battle against obesity
The prevalence of obesity in the world has tripled since 1975,6 and it is now responsible for some 3 million deaths a year. Covid increased awareness of how excess weight can make people susceptible to other diseases. There is growing momentum – from governments and individuals – to tackle the problem, which coincides with the development of new treatments. One potentially promising new weight loss drug has recently been approved for use in the US; another one is expected to get the green light in 2023. The global obesity treatment market could top USD54 billion by 2030 from just USD2.4 billion in 2022, according to Morgan Stanley. Insurers are slowly becoming more willing to cover obesity treatment, and there is also a growing appetite from the public to pay out of pocket where such coverage is not available.
7. Learning for life
Demographic and technological change have deeply impacted society. As a result, learning is no longer the mainstay of school. A growing number of countries are embracing lifelong learning as a means to cope with the challenges associated with longer-living populations. The pandemic prompted many people to reconsider their lives and their jobs. Labour shortages in some industries have created opportunities for new workers to step in. At the same time, improved work/life balances – with working from home saving commuting hours – have opened the door for people to take up new hobbies. Growing acceptance of online learning has made studying more accessible. It shouldn’t be a surprise that 2023 has been pronounced the “European Year of Skills”, with extra investment in training and a drive to get more women into science and technology.