Companies across the world are continuing to brace themselves for an economic downturn. Large-cap tech stocks have fallen sharply in response to government moves to stem the tide of inflation, and businesses are slowing hiring and tightening budgets in an effort to prepare for a recession that appears all but inevitable. In spite of gloomy skies on the horizon, the third annual Bain & Company Technology Report 2022 maintains that technology will remain a critical investment and a source of productivity.
Disruption is the key theme of this year’s report, having caused substantial challenges as well as opportunities for businesses over the past several years. The report strikes an optimistic tone despite the uncertainties the world is facing, focusing on how technology will continue to play a central role in the global economy.
"Value is largely determined by innovation and revenue growth, and today the technology sector has been hit hard," said David Crawford, Leader of Bain’s Global Technology practice. "Still, CIOs and CTOs are increasing their technology spending. Increasingly, business leaders view technology as an investment in driving productivity, speed, and competitiveness even in difficult budget environments."
Major global disruptions were highlighted by the report, such as the continuing separation of the U.S. and Chinese economies, the impact of China’s zero-COVID policy on productivity, and the ongoing chip shortage impacting global supply chains. Bain predicted that while some companies can expect some recovery in chip supplies as early as this year, many others will have to wait until 2024 or later to see relief.
The multiverse was also marked as a disruptor, with the metaverse and web3 ecosystem having already grown to thousands of companies and gathered more than $80 billion of start-up funding. Bain identified virtual identity as one of the key opportunities for web3, as consumers continue to seek out ultra-personalized interactions and exciting new experiences.
The report also calls out disruption as more than a threat to businesses, but a key driver of explosive growth and innovation when utilized as part of a strategic plan by companies resolved to reject a legacy mindset, effectively monitor emerging business threats, invest carefully in research and acquisitions, and fearlessly disrupt themselves. According to Bain, businesses should remember that technology embraces disruptions, and regardless of the challenges involved, tech can unlock new opportunities and advances for companies wise enough to invest in it.
