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Emerging tech investments are shifting amid COVID-19, says KPMG

Aug 18
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Emerging tech investments are shifting amid COVID-19...

In the wake of COVID-19, business survival has become paramount and for many, this means investing in emerging technologies. Why then, does KPMG research show that Global 2000 companies have slashed funding in areas like automation, artificial intelligence (AI), blockchain, and 5G?

The Enterprise reboot report is optimistic that after this initial reaction to the crisis, spending on emerging tech will pick up again. In fact, many of the 900 executives KPMG surveyed alongside HFS Research said it was likely to increase in the next 12 months.

It aims to present a full picture of the current and future state of emerging technologies, as businesses make a dramatic shift in how they are approaching the sector. The report recognises that COVID-19 provides the circumstances to accelerate digital transformation and stimulate growth in the long-term, yet firms are currently reticent.

Cliff Justice, KPMG global lead for Intelligent Automation and US lead for Digital Capabilities, said: “This crisis isn’t affecting all industries equally, but for many of the industries facing crisis, managing the transition to a digital business model is imperative. However, doing so is made more complicated in a time where investments are critical, but cash must be preserved.”

For 59 per cent of those surveyed, COVID-19 has been the catalyst to accelerate their digital transformation initiatives. Conversely, around four in ten said that the virus would have the opposite effect and halt investment in emerging tech altogether.

Executives have therefore seen a need to prioritise their must-have technologies and for 56 per cent of respondents that means cloud migration. It’s now seen as an absolute necessity in the era of COVID-19.

It’s still thought that investments in various emerging technologies will increase over the next year, even though they’ve taken a hit now. Some 44 per cent of those surveyed said they expect to be spending more on the likes of 5G in the coming 12 months in comparison to 26 per cent anticipating a drop in investment in this area.

When it comes to process automation, 43 per cent are expecting to see an increase and 25 per cent a decrease. In AI it’s 39 per cent versus 31 per cent; hybrid cloud or multi-cloud 38 per cent versus 28 per cent; blockchain 34 per cent versus 30 per cent; edge computing 34 per cent versus 33 per cent. The only exception is in the area of smart analytics, where the 32 per cent expecting an increase are outweighed by 35 per cent who don’t.

Mr Justice added: “Emerging technologies and new ways of working can play a significant role in the transformation to a more digital economy. These technologies are helping companies maintain customer and stakeholder trust, keep remote workforces connected, ensure their business is resilient and prepared for disruptions, and build a strong foundation for future product and service innovation.”

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