Digital innovation

Strategic markets that are slow to pay off

by Vincent BONNEAU

Emerging digital technologies drive a paradigm shift in control over data and critical infrastructure, rather than creating new markets. Which is why the digital sovereignty issues they create are being so closely scrutinised by governments.

Digital innovation continues to thrive

The current wave of innovation lies not in a dominant technology, in the way that the web, the cloud and mobile have been over the past fifteen years, but rather in a multitude of technological innovations (artificial intelligence, IoT…) and often in their combination. This effervescence creates a complex situation for businesses which, unable to invest in every area, are having to make difficult choices. This explains why some technologies, even though they are strategic, are generating only meagre revenue and/or developing slowly. We are also seeing a host of innovations being rolled out around existing, pervasive technologies and solutions, so which do not generate revenue directly. Lastly are those technologies that some companies are using in-house, as a way to maintain their edge, but not making them available for sale – such as Amazon and robotics.

Artificial intelligence is the most hotly anticipated technology

20 most influential technologies in 2025

Source : IDATE DigiWorld in "Innovation 2025"

Internet leaders keeping the US

American companies are ubiquitous in the development of emerging technologies. They are relying on a string of acquisitions to stay on top, leveraging their market caps and massive spending on R&D. America’s top five OTT  companies are now all in the global top 15, all sectors combined, with Amazon enjoying a solid lead over Alphabet. They are especially strong on artificial intelligence and on cloud and edge computing, but also have a solid foothold in virtual reality (Oculus) and LEO satellites LEO, and in virtually every emerging segment.

The US has the field almost to itself when it comes to R&D on digital technologies, well outpacing the Chinese (with the sole exception of Huawei). Europe, meanwhile, has only three players in the race: Nokia, Ericsson, SAP – i.e. as many as South Korea (headed by Samsung), Japan (Hitachi, NTT) and China.

US enjoys solid dominance of technology R&D thanks to OTT players

Tech ccompany spending on R&D in 2017

Source : PWC

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