Economic disruption will be the prime economic driver this year as major corporate site location projects will follow a new era of technology companies growing beyond their corporate headquarters in a sear for IT talent based upon the analysis of the Montrose Group for what trends are apparent for corporate site location in 2020. Creation of new technology, adoption of new consumer behavior or the entrance of a major new market competitor create the disruption economy. The disruption economy allows companies and communities to redefine how and why they work to create a better way to serve employees who choose to work there because they believe in the company’s purpose.
Consumer products and the infrastructure upon which they operate increasingly have the ability to sense their surroundings, communicate with other devices and people, and to draw on the computing and storage power of the cloud with connection to the Internet. IoT is a network which connects multiple smart devices enabled with software and network connectivity which exchanges information between each other and with the server. IoT is a billion-dollar market and is growing, continuously driven by technology’s integration into manufacturing, Smart Community development, and connectivity of consumer products to the digital age. A study shows that by the end of year 2020, there will be more than 30 B connected devices on the information grid and the market size will be double the size of pc, smartphone and connected cars, and wearable’s market with the global IoT market is expected to grow in the US to $2488 B by the end of 2022.
The transportation sector of the American economy is undergoing a revolution based upon technology innovations. Global Autonomous Vehicle market revenue, based on the sensors, hardware, software, services, and autonomous vehicles types, is expected to grow 39.6% during 2017-2027, reaching $126.8 B by 2027. Illustrating the strength of this market are B dollar investments made by Ford, General Motors and Honda to, in some cases, jointly develop the technology needed to spur the widespread adoption of fully self-driving vehicles.
The global fintech market was valued at about $127.66 B in 2018 and is expected to grow to $309.98 B at an annual growth rate of 24.8% through 2022 according to a recent study by The Business Research Company. Growth in the digital payments sector is driving the market for FinTech based upon technology’s ability to make payments for goods and services faster, easier, more convenient, and cost-efficient for customers. Customers can now pay for various goods and services via cryptocurrency and loyalty points, and other digital cash alternatives are driving dramatic growth in this digital banking arena and upsetting the traditional banking marketplace.
A MarketsandMarkets report indicated that the healthcare IT market is projected to reach USD 390.7 B by 2024 from USD 187.6 B in 2019, at a CAGR of 15.8% during the forecast period. The demand for healthcare IT solutions and services is driven by government mandates & support for healthcare IT solutions, rising use of big data in healthcare, high returns on investment for healthcare IT solutions, and the need to curtail escalating healthcare costs.
Technology and consumers use of the smart phone for all transactions are changing T dollar traditional industries like insurance, banking, transportation and health care. A couple examples include:
- Fintech continues to grow as Root Insurance illustrates– Root provides car insurance using a drivers’ phone to provide a rate based upon driving performance. The company raised over $500M in venture capital and will continue to grow and gain market share in 2020;
- Artificial Intelligence (AI) startups saw $1 B in venture capital investments in the 3rd Q of 2019 alone and will continue to see future growth in 2020;
- Funding for VC-backed Healthcare companies in US raised $4.9B in 162 deals in the 3rd Q of 2019 illustrating that the disruption of the health care industry by technology will be just as big as the dominance of the growth of the health care sector in the American economy; and
- Communities driven by private sector technology developments continue to create Smart Communities to address transportation, public service, safety and utility challenges such as Chicago’s use of gunshot detection data from ShotSpotter to reduce homicides, New York City using Automated Meter Reading units to measure actual water consumption saving $73M by addressing water leaks more quickly, or Pittsburgh’s smart traffic light network that uses AI to build a timing plan to address traffic congestion.
Technology driven disruption of traditional markets will continue to provide substantial corporate site location activity as these startup companies grow and expand their footprint across the United States in search of information technology talent. Even IT superstars like the Raleigh-Durham region that have three times the national average of computer software engineers have a skills gap in recruiting this talent to the region. Silicon Valley, while clearly the global technology startup capital of the world and home to all the major global tech companies, struggles to keep its IT and tech talent. 2020 will see regions that focus on developing skilled IT and tech workers succeed in gaining this new generation of economic disrupters.
