This year will be marked by innovation, regulation, data security, but also by the search for profitability and sustainability for companies in a difficult economic context.
As we enter the new year, governments will be forced to look for ways to regulate the misuse of artificial intelligence without affecting its use in businesses or the innovation of software companies. 2024 will be marked by the search for profitability but also sustainability; These will be the main trends that the technology industry will witness during the year.
AI for everyone
Artificial intelligence has reached the peak of its development and should continue to be a strong trend over the coming months. Furthermore, its popularity will reach such a level that it will become a product as common as search engines and electronic mail. In short, applications that do not integrate the advantages of this fundamental asset are destined to disappear, while their use will become increasingly transparent for the average user. For their part, software companies will realize that promoting AI is hardly profitable, with all its value tied to its integrations.
Prices and profitability
The macroeconomic context points to a potential global recession in 2024, initially in the United States, before spreading to Europe and Latin America. The slowdown in trade could lead to a contraction in global GDP.
The technology sector will not be spared and companies that are not profitable will not survive. This is a particular problem for publicly listed companies, which will be forced to increase their prices or restrict their activity to preserve the performance expected by shareholders. Furthermore, given the uncertain economic environment, companies tend to be cautious about spending. If they cannot win new customers, software publishers will have to lower their prices; otherwise, your customers will reduce their spending and opt for cheaper products.
Policies and regulations
Faced with advances in AI and related technologies, public authorities are realizing the need to design policies that regulate their use without stifling the innovation of creators. In 2024, this trend will gain momentum and continue to evolve in the coming years.
Countries such as France, Ireland, Italy, Spain, United Kingdom, Australia, China and Japan, as well as the European Union, are carrying out extensive studies on this technology. Some have already developed bills or are interested in understanding and regulating AI with the aim of protecting the privacy of their citizens.
Thus, the European Union recently reached a “provisional agreement on the proposal for harmonized rules on artificial intelligence”. Of course, an additional vote will be needed before this “artificial intelligence legislation” becomes an integral part of the EU’s legislative arsenal, but the objective is clear.
The European Union stated that “the regulation aims to ensure that fundamental rights, democracy, the rule of law and environmental sustainability are protected against AI-related risks, while encouraging innovation and making Europe a leading in this domain. The rules establish obligations regarding the level of risk and impact that AI can generate. » An increasing number of countries are likely to develop rules tailored to their privacy and security needs, accelerating the use and development of new technologies.
Private cloud environments and the return of on-premises computing
Concerned with enhancing the security and confidentiality of their data, some large accounts or companies active in regulated sectors will consider using their infrastructure to store and manage information. The result is a potential increase in the use of private cloud environments and “on-prem” software, that is, installed on your own devices. Two reasons for this change: on the one hand, the prohibitive cost of deploying in public cloud environments; on the other hand, improving data confidentiality.
People are increasingly aware of the importance of their data, but also of why it needs to be protected and to whom it is entrusted. That is why they expect companies and public authorities to exercise greater control and security.
Elon Musk coined the term “idiocy index” to refer to the disparity between the cost of a final product and the total cost of the materials that make it up. For example, if the manufacture of a product costs 100 euros while the cost of its various parts amounts to 10, there is a significant loss of resources in the supply chain. That’s why Tesla is the only American electric car manufacturer that makes its own motors, windows and audio systems – among other components – in an effort to eliminate unnecessary middlemen and increase profits.
In 2024, many companies may try to imitate this model, eliminating certain “layers” of their processes to reduce production costs. With this in mind, they will look for turnkey software that allows them to manage and centralize new processes without the need to incur the high costs inherent to complex implementations.
Sustainability and compliance
In recent years, environmental, social and governance (ESG) criteria have become increasingly important in companies, and this trend will only increase in the next year and beyond. This evolution is partly due to consumer pressure, the state of the world and the transformation of the values of companies that are committed to ensuring that their results benefit as many people as possible.
We can expect new ESG regulations to be implemented to ensure companies limit potential harm and deliver greater value to the communities where they operate, as well as the planet at large. Companies will need to evaluate their practices to verify compliance.
However, companies that go beyond simple compliance, applying even more rigorous ESG standards, will have a greater chance of attracting the interest and loyalty of their customers. Likewise, they are likely to incorporate into their culture aspects such as creating broader socio-economic benefits, beyond conformity, a potentially significant difference to the outside observer.