Artificial Intelligence, Internet of Things top list of transformative technologies to watch this year.
As the technology revolution continues, Artificial Intelligence (AI) and the Internet of Things (IoT) top the list of technologies that are transforming the business and consumer landscape. The electronic components industry remains at the heart of that transformation, developing the products and solutions that are increasingly in demand in both sectors – and 2018 may be the year they come together with other game-changing technologies to create even greater opportunities for organizations up and down the supply chain.
“While AI, IoT, machine vision, robotics, and the cloud are not really new technologies, they are coming together in new and powerful ways and fundamentally changing businesses, fueling innovation, disrupting industries, and creating both threats and opportunities for all,” according to a new report by industry researcher IHS Markit announcing the 8 in 2018: The Top Transformative Technologies to Watch This Year. “An open, ecosystem-led approach to developing and implementing these technologies can help bridge the historical, structural silos between different vertical industries.”
AI and IoT have long been buzzwords in the electronics sector, but they continue to grow in stature as the technologies mature and gain wider acceptance across a range of industries, as IHS points out. Both technologies topped the 8 in 2018 list, and with good reason: AI and IoT are being used as competitive differentiators in many industries (think smartphones, cars, and medical devices, in particular), and the accelerating growth of the “connectivity” movement shows no signs of slowing down. Here’s a look at why IHS and others peg these two game-changers as ones to watch this year.
Advances in AI
Investment in AI and related technology is growing by leaps and bounds. Worldwide spending on cognitive and AI systems is forecast to reach $57.6 billion in 2021, according to a late 2017 update to the Worldwide Semiannual Cognitive Artificial Intelligence Spending Guide from technology research and consulting firm International Data Corporation (IDC). That translates to a more than 50% compound annual growth rate between 2016 and 2021, the firm said, adding that spending on cognitive and AI systems increased nearly 60% from 2016 to 2017 alone.
“Cognitive and artificial intelligence solutions continue to proliferate across all industries, resulting in significant growth opportunities,” Marianne Daquila, research manager for customer insights and analysis at IDC said in a statement announcing the updated statistics.
Daquila pointed to specific uses for diagnosis and treatment in healthcare, as well as more general applications such as automated customer service agents across various industries.
“The variety, application, and nature of cognitive/artificial intelligence use cases is resulting in ubiquitous spend over the forecast period,” she added.
That’s because the technology is maturing to the point where it can be used as a differentiator, especially in the smartphone, automobile, and medical markets. The way in which the technology is deployed is also evolving, allowing developers to optimize for on-device solutions as well as cloud-based ones, a point IHS Markit emphasizes in its research.
“Cloud AI has more computing power to analyze data as it utilizes deep learning algorithms, but there are potential issues around privacy, latency and stability,” the researcher said. “On-device AI, meanwhile, can help offset those dangers to some degree. For instance, smartphone users who deploy the built-in AI of their phones are able to store data locally and thus safeguard their privacy.”
Such changes are contributing to the technology’s potential and will fuel spending in five key industries over the next few years: retail, banking, discrete manufacturing, healthcare, and process manufacturing – all of which combined will represent 55% of AI spending by 2021, according to IDC.
Connecting with IoT
The rise of AI will combine with advances in cloud and “edge computing” – which deals with gathering and processing information near the source of the data (or the edge of a network) – to create even more technological transformation. This is where IoT and the connectivity movement continue to gain steam. IHS points to a four-stage IoT revolution that combines all of these elements in a “connect, collect, compute, create” model.
“Enhancements in IoT connectivity, such as low-power wireless access (LPWA), will drive growth,” the researcher said, adding that “... technologies adjacent to the IoT will become increasingly sophisticated. Machine video and ubiquitous video will empower new types of visual analytics. And AI, the cloud and virtualization will help develop critical insights sourced from data at the so-called “edge” of computing networks. Applying AI techniques to data will drive monetization in the form of cost savings, greater efficiencies and a transition from product- to service-centric business models.”
All of this means greater demand for IoT-related components, products and systems. IoT spending is expected to grow by about 15% this year – to $772.5 billion – and sustain a more than 14% compound annual growth rate between 2017 and 2021, according to IDC’s Worldwide Semiannual Internet of Things Spending Guide. IoT hardware will be the largest technology category this year, with $239 billion going toward modules, sensors, infrastructure, and security. Industries expected to spend the most on IoT solutions in 2018 include manufacturing, transportation, and utilities.
“IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management,” according to IDC. “In transportation, two thirds of IoT spending will go toward freight monitoring, followed by fleet management. IoT spending in the utilities industry will be dominated by smart grids for electricity, gas, and water. Cross-Industry IoT spending, which represents use cases common to all industries, such as connected vehicles and smart buildings, will be nearly $92 billion in 2018 and rank among the top areas of spending throughout the five-year forecast.”