i3 | February 06, 2023

Policy: The New Digital Utilities Cybersecurity, cloud computing, AI and robotics.

The push to a permanently hybrid workforce by enterprises, and the increasingly online posture of consumers in the wake of the COVID-19 pandemic, has fundamentally transformed the state of the modern economy.

The global economy faces several interconnected and long-term challenges: a more vulnerable cyberspace as greater online activity raises the potential for increasingly costly attacks; the need to offer flexible working environments for staff while also ensuring business productivity; and a growing workforce gap as heightened demand strains labor resources.

Consequently, three factors have become, and will remain, vital components of the modern economy: security, scalability and simulation. Innovation in cybersecurity, cloud computing, and artificial intelligence (AI) and robotics will be essential to ensure the operation of these three components, and the economy as a whole.

These three technologies have transformed from optional upgrades to digital utilities — technological necessities to successfully conduct secure, scalable and efficient business.

Security

With greater digital footprints for enterprises and consumers alike, cyberspace vulnerability has increased significantly in recent years alongside threats whose scope, type and velocity continuously evolve.

A recent study from Cyber Edge found that 85% of organizations were impacted by a successful cyberattack in the last year. What was once a threat landscape defined by malware and phishing scams has shifted into a more complex and challenging ecosystem with risks from new threats such as cryptojacking, encrypted attacks and, notably, ransomware.

The same study also found that 71% of organizations were impacted by a successful ransomware attack in the last year, an increase of 55% from four years prior. In fact, Cybersecurity Ventures estimates that a ransomware attack occurs every 11 seconds, with impacted companies paying out ransom rates as much as 300% higher than the previous year.

In response to the shifting security landscape, innovation in cybersecurity has led to significant growth and diversity in the products and services that together form a tapestry of protection. Solutions range from identity access management tools to asset visibility management systems and customized cybersecurity consulting services.

Enterprises must invest robustly in cybersecurity resources to shore up their own information as well as consumer data. Gartner estimates that enterprises were likely to spend $172 billion on cybersecurity in 2022 alone, with 81% of organizations increasing their cybersecurity budgets in the year ahead. Given increasing government regulatory and consumer concerns around privacy, cybersecurity technology has become, and will remain, an indispensable part of enterprise operations.

Scalability

Throughout the COVID-19 pandemic, cloud computing demonstrated its agility and reliability, powering greater remote and hybrid working models in what may have been the ultimate stress test for the technology. Cloud computing will continue serving as both the backbone of the next wave of innovation as well as the nexus allowing these technologies to work in harmony to power digital enterprises and lifestyles of the future.

Fully 80% of companies intend to maintain or increase spend in Infrastructure-as-a-Service (IaaS) technology, according to IDC, deploying about $495 billion in worldwide public cloud spending in 2022, according to Gartner. The increased allocation of budget to cloud will not only improve flexibility for continued hybrid work models, but also business productivity, thanks to a greater ability to onboard optimal software solutions that increase individual worker efficiency.

At the small business and creator economy level, cloud innovations allow leaner teams to leverage Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) software like CRM databases, inventory management solutions and e-commerce automation platforms to meet increasing customer demand despite smaller human capital capacity. As such, cloud IaaS, PaaS and SaaS innovations will allow companies to effectively meet business productivity needs and compete, regardless of their size.

40% Increase in orders for workplace robots in Q1 2022 over Q1 2021

Simulation

AI and robotics operate as horizontal technologies, increasing the performance and efficiency of a variety of other technologies and fields, including cybersecurity and cloud computing.

As the digital economy now produces about 2.5 quintillion bytes of data every day, the need for AI and robotics to process greater volumes, velocity and variety of big data also grows.

From automation of processes like baseline accounting processes to chatbots for customer interactions and operation of autonomous machinery and vehicles, AI and robotics have become the technological underpinnings to consumer and enterprise economies. Worldwide spending on the technologies was poised to reach $406.1 billion in 2022, according to IDC, driven in large part by the 83% of enterprise survey respondents who indicated that they will increase their AI/ML budgets, according to Algorithmia.

At the same time, robots increasingly make their presence known in the workforce: 228 industrial robots were installed for every 10,000 employees in the U.S. by the end of 2021, according to Pitchbook. The technology looks to make up for workforce shortages that have only been exacerbated in the last few years: The Manufacturing Institute estimates that 2.1 million manufacturing jobs will remain unfilled by the end of the decade due to an absence of qualified, skilled labor.

Unsurprisingly, Q1 2022 saw a 40% increase in orders for workplace robots over Q1 2021, according to the Association for Advancing Automation. Further, enterprises were set to spend $17.5 billion worldwide on warehouse automation technology in 2022.

Consequently, companies must be able to use AI and robotics to effectively and accurately simulate human productivity to navigate sustained and heightened consumer demand, continued supply chain disruptions and tight labor markets. Moving forward, enterprises will allocate budget to drive or incorporate deeper innovation into AI and robotics to ensure wider applications of these technologies to address these challenges.

Conclusion

Cybersecurity, cloud computing, artificial intelligence and robotics must — and likely will — work closely with one another to address the macroeconomic challenges of the digital economy. CTA monitors how these trends will evolve as a part of our work on the Nasdaq CTA Cybersecurity Index™ (NQCYBR™), ISE CTA Cloud Computing Index™ (CPQ™) and Nasdaq CTA Artificial Intelligence & Robotics Index™ (NQROBO™).

CES 2023 will offer attendees the opportunity to hear firsthand from industry leaders discussing how these technologies will continue their evolution as digital utilities, and they will see these innovations unfold right on the showfloor.

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