Five areas of tech which will dominate 2024: From climate to blockchain
“There will come a point where no job is needed – you can have a job if you want to for personal satisfaction, but the AI will be able to do everything,” Elon Musk said earlier this year.
Whether this dramatic statement is entirely true or not, AI is certainly poised to change the way we work and the way that tech companies operate.
An EY European Financial Services AI Survey in October found that nearly 80 per cent of European financial services leaders expect Generative AI to significantly affect productivity and change roles.
In the annual EY ranking of the top 10 opportunities for technology companies in 2024, Generative AI came first.
AI dwarfs the impact of the internet and the smartphone, manager of the Polar Capital Global Technology Fund, Xuesong Zhao told City PM earlier this month. It will disrupt industries and bring “significant productivity gains,” he added.
Investors will also be closely watching government regulation against the misuse of AI.
Climate tech
Climate tech is on a “decade-long upward trajectory”, according to the PwC State of Climate Tech 2023 report. Recent data from HSBC Innovation Banking and Dealroom found that climate tech alone made up almost 20 per cent of total venture capital investments in the UK.
“In the International Energy Agency’s (IEA’s) net-zero scenario, just over one-third of the emissions reductions occurring in 2050 depend on technologies that are currently only in development,” the PwC report said.
“Innovation capital, in much larger amounts than today’s sums, will therefore be vital for decades to come.”
Start-ups in the energy sector raised £2.38bn in the first nine months of the year, the most venture capital cash by sector, according to data from Dealroom and HSBC Innovation Banking. The sector is on track to raise roughly the same amount by year-end as they did in 2022, impressive in a year marked by reduced investment and confidence.
However, funding is still too low: just $1 of funding for climate tech is available for every $3.24 demanded, according to PitchBook, making it a key growth area to watch in 2024.
Quantum computing
Start-ups such as Quantum circuits and Peptone are transforming the sector, as companies look to achieve quantum advantage (where quantum computers can solve problems traditional computers cannot) in the coming years.
The UK national government strategy for quantum includes plans for 25 per cent to 33 per cent of all UK businesses to have taken substantial steps to prepare for the arrival of quantum computing by 2023, plus financial and strategic support for quantum start-ups. Th strategy commits £2.5bn to developing quantum technology.
“2024 will be the year when people realise the potential of combining AI and quantum technologies. Classical AI has been a big theme in 2023 but it’s based on hard deterministic rules,” Markus Pflitsch, founder of Terra Quantum, told City PM last week.
Web3 and Blockchain
Web3 is used to describe the next form of the internet build on blockchain technology, where users communally control the space.
While blockchain currencies and NFTs have both floundered this year, Mckinsey&Co suggests that we shouldn’t “throw the Web3 baby out with the cryptocurrency bathwater”, as “other areas of Web3 experience continue to push forward”.
“2024 is poised to be a year of consolidation for blockchain and Web3. After a period of rapid innovation and experimentation, we will see more real-world use cases emerge, as well as a shift from blockchain-based products to Web3-embedded processes,” Sara Simeone CEO & Co-Founder at Niftyz.io told TechRound.
Gaming studio GameFi has also predicted that tens of millions of people will enter Web3 through gaming in 2024.
Semiconductor chips
Chips have become an essential part of the UK tech supply chain and increasingly well-known outside of the tech sector.
The UK sector, which boasts high-growth companies like Pragmatic Semiconductors, Graphcore and Vaire Computing, is predicted to grow further in 2024 as the world become increasingly reliant on semiconductor chips for its electronic devices.
Semiconductor chip producer Arm has also been a UK tech success story – albeit one that chose to list in the US.
Despite a slowdown in 2022 and 2023, WSTS predicts a 13.1 per cent increase in the valuation of the semiconductor sector, reaching $588bn in 2024.
The UK currently has 88 startups working on semiconductor chips, the highest number in Europe, according to Dealroom.