The pace of technological change is rapid and it is difficult for companies to decide which concepts and methods to rely on. What are the current macro trends that can provide a competitive advantage? And what can the first steps towards implementation look like?
1. Hostile Tech – from criminal to accidental
“Hostile” technology is usually associated with criminal activities, such as ransomware and data theft. However, users can also view legal and often generally accepted activities such as advertising and targeting customers as a threat. In addition, there are unintended biases in algorithms or machine learning systems. Hostile Tech continues to come into focus, with increasing potential for conflict. Consumer concerns about the negative effects of using artificial intelligence, advertising and marketing technologies are increasing, as is criticism of how social media channels shape and influence societal debates. The increasing regulation around data collection, storage and use, such as in the European General Data Protection Regulation (GDPR), reflects the critical attitude of consumers and the desire for data protection.
These developments offer a clear positioning advantage for companies that, on the one hand, invest in protection against deliberate hacker attacks and, on the other hand, take care to respect customer wishes by avoiding dubious targeting. This contributes to customer trust and promotes a positive image. Protection against cyber attacks can be optimized through the secure delivery of software throughout its entire life cycle. AI-based solutions offer advanced protection against cyberattacks, but should not be seen as a panacea. At the same time, companies should develop a solid framework for their data ethics and collect only necessary customer data.
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2. The Man-Machine Experience: The Metaverse is Coming
The way we interact with the digital world is changing. Devices are enhanced by gesture and voice interaction. The Metaverse, a new digital reality based on AR and VR technology, is currently on everyone’s lips. The global market for the Metaverse will grow to over $800 billion by 2028, and more and more players are entering the market. New platforms will bring new types of monetization for companies – even beyond pure advertising. While the metaverse is still a little further away, technologies such as NLP (natural language processing) are already widely used, for example in customer service. Concepts for augmented reality that connect the real with the virtual world are on the rise, for example when buying clothes or furniture.
Companies that want to rely on such new technologies must build up the required special competence in software development in good time. In doing so, they should always keep in mind that technologies such as AR and VR are fundamentally changing the user experience and the design process. In addition to the applications for consumers, there will also be many new possible uses in the B2B area. Training and conferences are the classic examples, but think of scenarios such as intelligent drones in agriculture.
3. Sustainable IT becomes imperative
Consumers, governments and investors are demanding that companies take greater responsibility for the environment. Sustainability has become a business imperative. The pressure is growing: When the new Corporate Sustainability Reporting Directive (CSRD) comes into force in 2023, smaller companies with 250 or more employees will also be obliged to report on their sustainability activities.
Technology is a major contributor to climate change, and many technology companies are trying to address this issue — whether that’s by building energy-efficient data centers, using energy from renewable sources, or by analyzing their vendors and supply chains. Technology can also help make our daily lives more sustainable, for example by supporting smart cities. Here, technology can be used to optimize traffic to reduce pollution.
Businesses should continuously monitor and measure the environmental costs of their products and activities. This enables them to quickly initiate effective measures that reduce resource consumption and thus costs. Green cloud optimization for data centers, for example, is an important step towards greater sustainability. Ideally, a data center is powered by local renewable energy and uses infrastructure software that minimizes energy consumption. Technology companies should also make sure that principles of sustainability are adhered to throughout the supply chain. All measures for more sustainability should be communicated transparently to the customers in order to make the high priority clear.
4. Partnership with AI
Machine learning (ML) and artificial intelligence (AI) are on the rise across all industries. Use cases range from automating day-to-day business processes to supporting strategic decision-making. Companies have many opportunities to develop productive partnerships between their employees and AI.
The market for AI is booming. IDC forecasts global sales of over $500 billion for AI solutions and services by 2024. But Germany is lagging behind. According to a current Bitkom survey, three quarters of German companies still see themselves as laggards when it comes to AI.
For their AI initiatives, companies should carefully define the KPIs and regularly measure progress. This is the only way to reliably assess whether AI brings real business value. AI applications require data access and optimal data quality, so companies should invest in a powerful data management system in advance.
When using AI, it is important for companies to understand when automation should be the goal and when reinforcement with AI makes sense. AI can fully automate repetitive processes, increasing productivity. While this can eliminate jobs, it also creates new roles that require more judgment and creativity. In other cases, AI augmentation is the right choice, with humans and machines taking on combined or complementary tasks. This usually involves strategic decisions that require experience and foresight. An example is AI-supported product development or dynamic simulations for planning complex scenarios such as climate change.
Companies should take the responsibility they bear when using AI solutions very seriously and consider the ethical implications. AI is entering complex and sensitive areas like finance and medical diagnostics, and AI-enabled decisions can have unintended negative consequences.