The CompTIA research team closed out 2022 the way we usually close out a year—with the release of our IT Industry Outlook 2023, which looks at the current dynamics in the IT industry and makes some predictions about tech trends for the coming year. Those trends may touch on macroeconomic issues or specific technologies, but we typically zero in on a particular angle. There’s a broader picture developing, though, as technology enters a new phase in business and in society.
We’ve hinted at this over the past few years, when we’ve talked about techlash or the increasing regulatory activity in the tech space. All industries have a lifecycle, with growth (or contraction) driven by both internal and external forces. The technology industry is no different. We often talk about cloud and mobile starting a new era for enterprise technology, but the changes to the consumer side of the equation around the same time had as much, if not more, impact on the overall shape of the technology ecosystem.
Fifteen years later, that shape is changing again. To kick off the new year on the CompTIA Volley podcast, we’re planning a two-part series that will take a look at the driving factors that have brought technology to this particular moment and set the stage for the next phase of industry evolution.
The tech industry is all grown up. Like I mentioned before, the tech industry pre-2007 was still primarily focused on the business world. While Amazon Web Services introduced a new chapter of cloud computing for enterprise applications, the iPhone introduced a new wave of tech integration for consumers. Over the next 15 years, the two new models combined forces to produce a stunning array of capability that became deeply ingrained in the fabric of society.
Heading into the future, the technology industry is no longer a mid-tier player in the global economy. Four of the five most valuable companies in the world are technology firms, and digital products and services provide the underpinning for every other industry vertical. The regulatory activity we’ve seen up to this point is just the tip of the iceberg in terms of new hurdles and scrutiny tech will face in the years to come.
The economic winds have changed. In a weird bit of timing, the financial crash of 2007-2008 lined up almost exactly with the introduction of these new technology models. To help everyone get back on their feet, the U.S. Federal Reserve dropped their federal funds rate in a historic way, keeping it at or near zero for over five years in order to spur economic activity. With new tech models to play with, most entrepreneurs and venture capitalists ended up with digital stars in their eyes.
Many of the businesses launched during this time made bets on growing to massive scale and then (somehow) monetizing their users. Over the past 12-18 months, two things have happened to shift this narrative. Those business models have proven to be shaky, and the days of zero interest rate policy (ZIRP) have come to an end. With money flowing less freely and a recent history of missed revenue targets, new tech ventures will need to focus more on product fit and unit economics.
Stumbles for Web3…and Web2.0. In many ways, we’re still coming to terms with this thing called the internet. The pandemic emphasized the importance of having a robust online presence, which is clearly still an aspiration for many small and medium businesses. At the same time, the core concepts around internet services are being put to the test.
Web3 was supposed to usher in a new wave of decentralized apps that redefined ownership and removed gatekeepers. While underlying technologies like blockchain may eventually prove to be important building blocks, we’re still waiting for the killer apps, especially after cryptocurrencies had a rough end to the year (to say the least). Meanwhile, even the user-driven models of Web2.0 are facing some challenges, partly because of the business model issues mentioned above and partly because of difficulty in areas such as content moderation. The internet will continue to evolve, but it’s not at all clear that a revolution is coming.
No more worlds left to conquer? Part of the magic in the history of technology has been the creation of entirely new phenomena, whether that’s products that find their way into our lives or services that we never knew we needed. Innovation has led to greater speed, more flexibility and different behaviors, both at work and in day-to-day life.
I’m not predicting that we’ve seen the end of surprising developments. But technology for the sake of technology may be growing rarer. More and more, we’re seeing bottlenecks where technology is integrated with other disciplines, and there’s a growing need to deeply understand these multi-disciplinary systems. There are still plenty of problems ripe for profitable solutions, but perhaps not as many billion-dollar ideas that no one sees coming.
What does all this mean for people working in the tech industry or tech job roles? Without a doubt, there will continue to be demand for skills in working with technology and recognizing how things are evolving. In addition to critical hard-core technology skills like networking or cybersecurity, organizations will need people who can consider long-term effects of technology integration and build strategies for future success. The shape of technology may be changing, but that only opens up new worlds of opportunity.
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