Abi Research: six technology drivers of a world in turmoil

How the economic, political and industrial challenges, as well as the multiple headwinds we are experiencing, will affect key global markets for technological innovation. And how technology itself will be the only means of finding our way back on course, with focused strategic paths.

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abi research

by Maria Cecilia Chiappani

Digitization and IoT applications, automotive and electric mobility, cybersecurity and new sustainability goals. What will become of these technological developments in the coming years?
The title of the latest report by. ABI Research, "The future of technology in a tumultuous world," captures the major - and very uncertain - changes taking place. While believing that delving into the changing dynamics and needs of end markets will help companies re-plan their supply chains for efficiency and competitiveness. On the one hand, inflation, energy costs, protracted war, and the changing world of work triggered by the pandemic. On the other, the impact of all this on technological evolution, which brings challenges and concerns, but also opportunities to be seized. We summarize in the next six paragraphs what analysts mean by "finding a foothold and defining a path to success" relative to the most relevant landing markets.

1 | 5G Connectivity

Inflationary pressures are accelerating the digital transformation of businesses as they focus on energy efficiency and sustainability. Demand growth, however, far exceeds supply chain capacity, partly due to intermittent anti covid restrictions in Asian regions. The fact remains that 5G connectivity is strategic for several sectors. In manufacturing, for example, a smart factory using it to do predictive, preventive and remote maintenance, in combination with self-driving vehicles, can save up to 103 tons ofCO2 emissions by 2030. In addition, an AGV (Automated Guided Vehicles) operating on a 5G network turns out to be 45 percent more productive than other solutions. Energy efficiency, then, reduces dependence on traditional sources by limiting the impact of inflation on production costs. Similarly, proper integration of public and private cellular network infrastructure can mitigate problems in supply chain management. Combining these capabilities with large-scale adoption of Artificial Intelligence and Machine Learning will make it easier for companies to detect anomalies and disruptions.

2 | Automotive

The automotive industry continues to suffer shortages of key components. That's why most suppliers predict a "flat" 2022, with shipment volumes about the same as those in 2021, which were already declining. Manufacturers will continue to prioritize premium vehicles and equipment, reducing the number of hardware components when possible to simplify production. However, the supply crisis is likely to clash with the demand for new cars, driven by the economic crisis and the general rise in the cost of living. One possible way out, according to analysts at ABI Research, could be to seize the opportunity to streamline its model lineup in order to market as many vehicles as possible before demand begins to wane. Given increasing cost pressures, Oems should still revive the transition to centralized IT architectures and software-based user experiences.

3 | Shared Mobility

Bottlenecks in logistics centers, port congestion, and component shortages have led to the high lead time of vehicles dedicated to shared micromobility. This will less impact large operators, who have placed orders in advance in order to secure vehicle deployment in 2022. Smaller companies, on the other hand, will struggle to meet their fleet expansion goals. On the positive side, rising energy and gas prices will increase demand for shared micromobility. Operators must therefore act to reduce operating costs through digitization and preventive maintenance, outsourcing of field activities, interchangeable batteries, and automation of charging activities. Equally important, reduce dependence on single suppliers and di- spose of alternatives in different geographic areas, as well as actively monitor supply chain processes to anticipate possible shortages.

4 | Industrial & Manufacturing

Industrial and manufacturing companies are at the center of almost every headwind of the moment: inflation, geopolitical crisis, semiconductor shortage, energy costs, etc. Issues impacting major markets:

  • oil & gas and pharmaceuticals: there are political and regulatory concerns, but di companies have greater operational control because of their ability to influence and set prices;
  • electronics and high-tech: a market hard hit by raw material shortages, with pressure accelerated by short product introduction cycles;
  • automotive: struggling with component shortages due to both the war in Ukraine and Asian semiconductor problems;
  • fast-moving consumer goods: manufacturers of FMCGs struggle to cope because less than others can pass on cost increases to end customers;
  • steel, chemical, and mining: sustainability regulations are very challenging and call for improving the environmental footprint while maintaining high standards of safety and data transparency;
  • paper: the supply chain is the main concern, but the increased use of recycled paper will alleviate pressures.

Suggestions and recommendations? ABI Research starts, again, with technology. Problems on production lines, in fact, have always been the preserve of technicians and plant managers. Today, teams and top management are also paying attention to them. Translated, those who do not directly manage production will need access to data through tools that can be used on all fronts: IT, OT and corporate.

5 | Sustainability

Sustainability and climate change commitments may be the first "victims" of the economic crisis. Indeed, companies' attention has shifted to cost reduction, supply chain and pressing financial issues. But environmental regulations are advancing, demanding consistent and accurate ESG (environment, social and governance) reporting. Here it is also up to governments to make energy security a top priority, but also to invest more in climate-neutral infrastructure. Green hydrogen shows promise, in heavy industry and transportation. So do all kinds of green technologies: renewables, electrification, digital energy, storage batteries and "carbon capture and storage" systems. The real urgency here is policy change, reducing costs and red tape for companies.

6 | IoT Applications

War, shortage, inflation, recession? These are also key words for the IoT market. Their impact on the rest of 2022 and 2023 remains to be clarified, but we do know that this sector will remain predominantly in B2B and enterprise supply chain management. In general, ABI Research offers three pieces of advice: invest in responsive supply chains by technologically implementing just-in-time processes (applies to both IoT providers and customers); mitigate labor shortages by increasing automation where possible; and identify supply chain weaknesses and leverage the IoT to offer solutions to reduce its energy footprint and increase its sustainability.


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