At the outset, 2022 has been diametrically opposite to the rising market value of cryptocurrency assets as well as Bitcoin and Ethereum in 2021. Initially there was the collapse of TerraUSD and Luna, resulting in the crash of 3 Arrows Capital and Voyager Digital. This happened on account of sudden withdrawals on 1 hand and the interest rate hike of banks to offset inflation, weakening investor confidence in these now high-risk (comparatively) not so high returns. Just as the industry was trying to revive, the bankruptcy of FTX on account of the additional factors of mismanagement, and failure of corporate governance besides the crypto winter and collapse contagion. Despite the tumultuous year, the industry is still optimistic on cryptocurrency albeit with regulations.
In 2022, the corporate blockchain and decentralised application use cases have mushroomed across Banking and Financial Institutions, Oil and Gas, Energy and Utilities, Transportation, Legal, Healthcare and others in areas such as Smart Contract Management, Medical Data Sharing, Energy Trading, Product and Export certifications, Cross Border Payments and Payment Reconciliation, Anti Money Laundering, Voting Mechanism, Royalty Tracking, Gaming, Cybersecurity and Real Estate processing platforms.
As mentioned in the Cyber Resilience section, Blockchain is also being considered by CIOs and CISOs to secure their endpoints, IOT devices and biometrics through blockchain powered password management. Securing and verifying personal and corporate identities vide blockchain is also being explored and this will be a fundamental building block of Web 3.0. The section on Cloud and Data also mentions the use case of Blockchain in securing data on the edge
Consumer-Packaged Goods, Pharmaceutical, Oil and Gas are using Blockchain technology in the supply chain to secure and check authenticity of production and quality certificates and stamping out counterfeits and dubious products, raw materials and processes. Transportation and Logistics companies are securing shipment and transactional information through blockchain.
Real Estate, Legal and Healthcare are seeing an increasing adoption of blockchain use cases in Smart Contract Management. Media and Entertainment Technology leaders are looking at Blockchain powered Non-Fungible Tokens (NFTs) based asset ownership deeds which give the bearer basis their private key signature, the exclusive usage, selling and transferring rights of the asset.
Banks, Financial Institutions and Insurance companies are commencing enhancing Cross Border Payments and Payment Reconciliation, Anti Money Laundering, Trade Finance, Claims Processing, Asset Tokenisation through Decentralised Finance (DeFi), and this will also value-add to their ESG initiatives. A Big 4 Consulting organisation has also built an Ethereum-based system to help large enterprises meet their ESG goals by having visibility, control and management of their carbon footprints. Blockchain is also enabling seamless ease of transactions and considerably optimising cost of cybersecurity, compliance and transactions.
Although the adoption and use of blockchain in corporate use cases is currently far less than that of personal and cryptocurrency, this Gartner Research estimates that blockchain innovations and use cases in the enterprise shall mature within 2-10 years, with smart contracts, DeFi and blockchain wallets leading the way and other such as NFTs, Blockchain platforms and Decentralised Autonomous Organisations (DAO) taking somewhat longer.
2022, has also seen a significant rise in countries looking to launch their Central Banking Digital Currencies. This article by the International Monetary Fund highlights than more than 50% of the global central banks are developing, planning pilots or exploring digital currencies and how they can value-add to the ease, cost and transparency of transactions
By Mid-2022, 5G Services were live in 70 countries and were in the rollout stage in another, an almost 2 X rise since 2020.
A 2021 survey conducted by Deloitte mentioned the role and importance of 5G and Wi-Fi-6 in the adoption of Industry 4.0, transportation and drones, extended reality and immersive experience, IoMT, Autonomous Vehicles, the Metaverse and Smart Cities & Utilities. 5G private wireless networks and 5G telecom service provider powered hybrid cloud and distributed edge platform are huge opportunities to be tapped. This Gartner paper highlights the importance of combining 5G networks with Edge Computing Capabilities in the 5G cellular base stations to meet the computing and processing power, connectivity and storage requirements of these above-mentioned use cases.
2022 saw 5G deployments enabling automakers to implement Industry 4.0 as well as to install Off the Air (OTA) updates across the connected cars. 5G has also been implemented at the FIFA World Cup in Qatar along with IoT sensors, analytics, AI, CCTV and Security solutions to provide technology and AI powered Offside and Penalty Area assistance with alerts, match and spectator analytics and patterns/ algorithms for predicting events related to stadium security & disaster management.
5G and its ecosystems are hence expected to enhance immense value for Telecom Service Providers and their ecosystem as well, besides additional industry verticals such as agriculture, aerospace, defence and retail as well throughout 2023 and beyond.
Following Alibaba’s Ali Metaverse and Facebook’s rebranding to Meta, 2022 did start off with a bang starting off with the mega Microsoft Activision acquisition followed by significant ongoing investments by technology companies such as Meta and Alphabet, venture capital players and brands. This McKinsey research estimated the total investment in the metaverse to be around USD 120 billion in 2022, more than double of the 2021 investments. The year has also seen several leading fashion and apparel brands appear on popular Metaverses such as Decentraland, Roblox, Sandbox and others bought virtual properties and online stores, made investments in NFTs and other digital assets. A leading automaker, a Fortune mobility company, an art and jewellery broker, a food chain and a Fortune consumer goods major also participated in online auctions, organized events, avatar fashion shows and concerts and launched innovative games in the Metaverse. Some brands have also commenced extending their patents, IPRs, copyright and design rights to also cover the metaverse as mentioned in this research by Deloitte.
Beyond these few events, adoption of the Metaverse well beyond gaming and entertainment has not met the hype of 2020 and 2021. Factors such as the cryptocurrency volatility & “winter”, still exorbitant pricing of Metaverse wearables, regulatory threats, rising digital fatigue and resumption of in person interaction and recessionary market conditions have contributed to this. As a result, despite valuations in billions of dollars, there are questions on the daily users, transactions and downloads of many decentralised worlds. Several technology majors have scaled back their Metaverse investments and have rationalized their workforce as well.
Although, Gartner here estimates here that one fourth of the global workforce shall spend at least 1 hour per working day in the metaverse by 2026, use cases in the corporate Metaverse are still to take off. It is envisaged that in 2023 and beyond especially considering ongoing hybrid working and virtual collaboration, HR functions such as remote hiring, interviews, onboarding, Learning and Development, and collaboration initiatives such as health and wellness, trainings, games, volunteering, fun and trivia are amongst the top employee lifecycle functions that the Metaverse can richly value add to. Besides HR, Metaverse interactions can also potentially value-add to functions such as Research and Development, Field Service and Maintenance, Prototyping, Design Thinking, Testing, Simulations, Virtual Procurement Auctions, Product Demonstrations, and Negotiations.
There have been developments in 2022 in the evolution of Web 3.0 which is decentralised, distributed, permissionless, trust less and incorporates native payments, based on NFTs, Decentralised Autonomous Organisations (DAOs), single identity and cryptocurrencies. Thus, leveraging Blockchain, smart contracts and digital assets/ tokens and giving power back to the users in a read-write-own ethos.
Besides proliferation in NFTs and DAO, 2022 has seen the emergence of Blockchain-as-a-Service (BaaS) and Move-to-Earn (M2E)- Incentivising users to move and stay active using Cryptocurrency. To reduce congestions on the core Web 3.0 platform and build interoperability and other value-addition, there have been developments on the Layer 2 solutions for computations and deployment of applications.
In 2022, blue-chip companies have taken significant strides in the world of Web 3.0: right from the addition of Bitcoin/ Ethereum to KPMG’s balance sheet, JP Morgan’s research on Quantum Key Distribution Network, launch of Rakuten’s NFT Trading Platform and DeBeers NFT Project to PayPal’s enablement of cryptocurrency to payment wallets and Amex’s new product enabling users to earn cryptocurrency rewards and many others.
2022 has seen continuation of investments in the Web 3.0 ecosystems: According to this research by McKinsey, in the 1st half of 2022, VC investments in Web 3.0 exceeded USD $18 billion in the first half of 2022 and are expecting to beat the 2021 investments of USD 32.4 Billion. Having said that, the adverse events and challenges in the cryptocurrency and Metaverse ecosystem in 2022 have also affected Web 3.0.
Whilst there are potential applications of Web 3.0 in Banking and Financial Services, Healthcare, Insurance, Automotive and others, there are no current significant use cases of Web 3.0 other than Cryptocurrency initiatives as this Gartner Blog mentions. Innovations such as Layer 2 developments, Decentralised Finance, BaaS and others shall take a minimum of 2 years for stabilization and adoption.
Despite the turmoil and challenges in the cryptocurrency world, Web 3.0 has bright potential itself and in conjunction with the Metaverse, AI and Data. Players in the Web 3.0 ecosystem are working on enhancing user experiences, cyber security, airdrops, sustainability and evolving the regulatory system for more widespread adoption in industry.
The pandemic brought about renewed interest and accelerated developments in quantum computing. Initially focusing on the prevention of COVID-19 and vaccine development, it is envisaged that quantum computing shall tackle high computing use cases in autonomous vehicles, traffic management, risks and portfolio management in finance, R&D, Supply chain and production processes in chemicals, healthcare, and pharma and planetary scale problems such as climate change. In this article, KPMG highlighted quantum computing amongst the top 10 technology trends for 2022 and its Quantum Technology Hub in Denmark focusses on research in quantum sensors induced ultra-precise measurements, speeding up of computations and quantum cryptography led cybersecurity enhancements.
Large technology companies such as Honeywell, Microsoft, AWS, Google, Splunk and many others are now involved in making innovations in the field of Quantum Computing. Besides the core quantum computing nuances, there is also significant work and research underway to look at the working conditions and environmental aspects of quantum computing such as energy, temperature, materials, accessories, controllers and so on and so forth.
This McKinsey research indicates that private sector investment in Quantum Computing was in excess of USD 1.7 billion dollars in 2021. From a nation perspective, as per another McKinsey research, the commitment of public funds in quantum computing investments of China, EU and the US have been USD $15.3 billion, USD $7.2 billion and USD $1.9 billion respectively. There is a potential of capturing around USD 700 billion by 2030 from Quantum Computing from the Finance, Pharma, Automotive and Chemicals Industries.
2022 has seen several significant pilots in Quantum computing underway as mentioned in this LinkedIn article. Hyperscale Cloud Providers are also working on amalgamating the Cloud and Quantum Computing to bring about the huge computational power of Quantum Computing to people without the Quantum machine. With potentially huge benefits of Quantum Computing to chemicals, pharma, healthcare, automotive, and financial services, large technology companies are working on development of Cloud Quantum Computers, hence throwing up exciting possibilities for the future.
The Quantum Computing ecosystem is also working on bridging talent pool gaps, cybersecurity challenges especially due to the threat to public key cryptography and regulatory frameworks. This is necessitating cybersecurity companies and other stakeholders to work on algorithms that are opaque to Quantum Computers. National Institution of Standards and Technology (NIST) is already working on encryption and other resources and tools to ensure security and cyber resilience in the Quantum Computing era, as this article indicates. The World Economic Forum has recently published the principles of quantum computing governance to harness maximum possibilities and minimise and mitigate risk.
In the near future, quantum computing will co-exist with classical computing to solve the unique problems involving huge datasets and hyper computational power for better outcomes for enterprises and the planet as a whole.
TRENDS FOR 2023- A SNEAK PEAK
It is expected that Cloud Computing adoption especially in the areas of Industry, Hybrid and Multi Cloud Native and FinOps will continue throughout 2023. There will also be leveraging of LCNC, AI and AIOps in the Cloud, as well as growth of decentralised & distributed cloud and combining cloud with edge computing. Using cloud for data storage, as well as research in blockchain and quantum computing will grow as well.
There shall be further convergence and alignment of IT and OT in the Internet of Things ecosystem, and human experiences, sustainability and resilience shall feature strongly in the journey towards Industry 5.0. Application of AI and Analytics to these Datasets will continue to enhance customer, employee and supply chain experiences, centricity and also bring about operational excellence, responsiveness and cost competitiveness
Intelligent RPA, RPAaaS and LCNC shall continue to drive automation initiatives. Adaptive and Responsive AI will further improve self-learning, faster and better outcomes, empowerment, and enhancing trust quotient and human centric outcomes
While Composable Architecture continues its prevalence, there is an emerging trend of Platform Engineering that many consider as an alternate to DevOps, Agile and Site Reliability Engineering (SRE). Platform Engineering leverages composable and self-service developer platforms for improving launch and time to market, scalability and reducing dependencies and costs as well.
Observability shall be an important tenet in Data Architecture and Decision Intelligence. Whilst the end-to-end Data Architecture custodian is still the CDO/ CIO, Data Literacy initiatives shall continue to permeate the wider organisation across multiple business functions
The 5G Ecosystem with Software Driven Networks, Edge Computing and Private Wireless Networks will further bolster digital transformation, autonomous vehicles, Industry 5.0 and 4.0, Smart Cities, Healthcare and Agriculture.
Cyber Resilience shall continue to be a focus area for Technology leaders, with Zero Trust Architectures, policies, governance frameworks and tools incorporated across the extended enterprise and these IoT, Edge & 5G and Data ecosystems as well. Along with the ongoing menaces of critical infrastructure attacks, insider leaks, ransomware and social engineering, tackling deep faking and 5G cybersecurity will also assume high importance Observability and leveraging other technologies such as AI, RPA and Blockchain along with Risk Management and Proactive Cyber Insurance Resilience continue to be focus areas for CISOs and CIOs.
With continuing turbulence and uncertainty in the cryptocurrency and Metaverse world, players in the blockchain, Web 3.0 and Metaverse ecosystem would need to balance investments with solid business/ enterprise use cases while addressing legal, privacy, ethical, security and governance issues on a critical basis for wide adoption.
With Quantum Computing pilots progressing and others starting, 2023 is expected to see some more insights from the efforts in research, commercial feasibility, use cases, sustainability, cybersecurity and governance.
2022 has seen market slowdowns, workforce rationalisation, continuing geopolitical conflicts and uncertainties, along with return-to-work challenges and phenomenon such as the great resignation, moonlighting and quiet quitting. There still remain discernible skill gaps and talent shortages in these technology trends for 2022 and 2023 which would be addressed by a combination of skilling and training, partnerships and outsourcing of these next-gen technologies and workforce.