2023 Technology Trends: The more things change…
Written by Kristin Ryan, Christina Nemr, and Eliza Thompson
The “Year of the Rabbit” is already ushering in a host of transformative technologies that will profoundly impact the relationship between the public and private sectors. Here are some of the technology trends and topics we’re watching in 2023 that will impact public-private collaboration.
AI launches a revolution: ChatGPT and DALL·E 2 have demonstrated the power of generative AI to the world; the market is expected to grow at a compound annual growth rate (CAGR) of about 35% from 2022 to 2030. This will increase capital flow to the industry and unleash powerful new use cases. For example, ChatGPT can take an input and deliver near human-style credit counseling at 10 percent of the cost. “Text to code”, “text to video”, and “text to Excel'' are taking off as well. Yes - we still need lawyers. But, for how long? Generative AI has the potential to deliver significant cost savings to many industries and is likely to have dramatic implications for labor markets. The winners will be those who can use AI effectively. Others may not fare as well. Adversaries will embrace it as they attempt to penetrate state and business networks. And the misinformation and disinformation use cases write themselves (literally). Although the potential for misuse and abuse is rife, organizations can use AI-driven narrative and community intelligence platforms to their benefit as they counter malicious actors and activities. As for educators concerned with plagiarism, incorporating AI and having students interrogate it is but one creative way to embrace a new threat in the classroom. The pace of change will be extrordinary. The potential list of doomsday use cases grows, but governments, businesses, and individuals should keep an open mind and consider the ways they can harness AI power to their benefit.
Fintech breaks the banks: In 2023, financial technology companies (fintech) will improve administrative efficiencies and begin controlling their own capital. Investment will shift from innovative fintech applications to “boring” technologies that automate administrative functions. Digitally native lenders will increasingly seek bank charters as SoFi and LendingClub have already announced. This will allow fintech companies to access a stable stream of capital and lower their cost of funding. Given the relative pace of innovation in the private sector versus the government’s ability to keep up, private tech companies will undoubtedly play a key role in facilitating the technological solution to the regulatory response.
Compliance software devours admin costs: Increasing regulatory compliance requirements necessitate meaningful improvements in software. This is especially important for industries including energy, healthcare, and finance, as well as any others that rely heavily on process compliance. The Dodd-Frank Act in the US alone requires compliance with 50,000 regulations. The Federal Information Security Modernization Act requires compliance with security standards for governmental entities. And antitrust enforcement requires computational compliance, especially for injunctions involving Big Tech. Actions taken on the other side of the pond have implications domestically as well. Businesses are struggling to comply with the General Data Protection Regulation (GDPR), which is, according to the EU, “the toughest privacy and security law in the world.” It imposes costs that amount to about 8% of business profits according to one estimate. The software to automate these processes will provide needed relief to businesses and governments in 2023.
Energy innovation makes its mark: Technological progress, threats to energy security, and climate concerns have flipped the cost-benefit analysis on nuclear energy, and Washington is onboard. Leading the transition will be Small Modular Reactors (SMRs); they combine innovative technology with a modular design to lower costs and increase versatility. Further out will be nuclear fusion, which generates electricity by first converting hydrogen to helium. In December of 2022, the Lawrence Livermore National Laboratory achieved a breakthrough in nuclear fusion technology, which could have significant implications for clean energy on earth and in space. Also encouraging for clean energy are the plummeting costs of wind energy, solar energy, and battery production. Others are making progress too. Observers will want to keep a watchful eye on the work occurring at the China National Nuclear Corporation—they’re manufacturing two fast-neutron breeder adapters which will have the potential to produce weapons-grade plutonium. As the energy sector rapidly evolves, tightly-knit public-private collaboration leveraging expertise and capital will accelerate the pace of innovation.
Other rapidly developing areas we’re keeping an eye on include: progress in Web3, investment in sustainable tech, changes to the creator economy, decentralized data to rebuild trust, and the legislative impact on Big Tech. We’ll address these topics in the near future—we’re excited to see how they also influence and shape new ways of collaboration between the public and private sector. We’ll especially be paying close attention to the operational challenges governments face—we can offer practical assistance in leveraging these innovations to address both new and long-standing challenges. Things are moving fast, but you can keep ahead of the curve if you’re working with the right people!
Photo by Osman Rana on Unsplash