With 2024 already well underway, changes in the tech sector continue to move apace. To navigate this evolving landscape, the Media and Telecommunications team at BDO South Africa Technology presents their predictions for the tech industry in the upcoming year, along with a crucial X-factor that could reshape the entire trajectory of technology going forward.
An End to Remote Work With Return to Office (RTO) Policies
The era of remote work, once hailed as a permanent shift, is poised for a recalibration. We’re beginning to see more companies returning to in-office work, and the tech industry is no exception. In response to a perceived lack of collaboration opportunities with fully remote work, we expect to see tech businesses pivot towards hybrid models, mandating office presence for enhanced teamwork while preserving flexibility. This will see employees required to be in the office three to four days a week by the end of 2024. Full-time remote work will not disappear completely, but will be acceptable only when necessary, such as when the local talent market can’t meet a company’s needs or when a position requires a unique skill set.
Meet your New Administrative Assistant: the ‘Autonomous Agent’
Autonomous agents, heralded as the new administrative assistants, are set to take a big leap in 2024. We’re already seeing autonomous agent start-ups secure major funding as all eyes in tech turn to this promising new technology. We predict tech companies will increasingly invest in these autonomous agents, moving from proof-of-concept to enterprise-wide implementation. However, the tech industry won’t stop there. And by the end of 2024, we expect to see tech companies experiment with assigning autonomous agents more sophisticated tasks, such as project planning and software development.
Generative AI Will Make Video Games (Almost) Limitless
The advancement of AI will usher in a new era of video games: one where the games evolve from player inputs, offering a more immersive experience.
Some video games already use generative AI elements to enhance their NPCs. But in 2024, we expect to see the first video game that creates new gameplay and narratives through generative AI inputs. This innovation promises to revolutionise the gaming landscape and by 2025, we expect the generative AI-enabled video game market to explode.
Passwords are Dead, Long Live the Passkey
Passwords have well-known security problems, such as being easily guessable, susceptible to brute-force attacks, and vulnerable to phishing scams. Passkeys have an advantage over passwords in that they require both the sender and the receiver to agree that a transaction is valid through tools like PINs, biometric data, secured devices, and Bluetooth. In the next year, we expect most vendors will start to support passkeys — not just the big tech companies.
In its Drive for Profitable Growth, Tech Will Continue With Layoffs
Despite hopes for stability following a tumultuous few years, tech layoffs are far from over. With a number of high-profile tech layoffs announced in late 2023, this year is set to be much of the same.
In 2024, we expect more tech companies will be taken private by private equity (PE) firms as they seek to raise capital, secure more attractive valuations, and fix organisational issues away from public scrutiny. This is a continuation of a trend that we’ve seen throughout the industry over the past year. These deals will, unfortunately, lead to layoffs as PE firms look for ways to cut costs and reprioritise spending.
Western Cape Emerges as Tech Hub
The Western Cape has started to emerge as a global tech hub, attracting major corporations and data centres drawn by its conducive environment for operations and cost-effective resources. The region’s appeal extends beyond local talent, enticing international firms to establish a presence there, such as the recent example of Amazon.
Generative AI Making Headlines for a New Reason: Cyberattacks
Generative AI, while promising innovation, presents a double-edged sword with increased susceptibility to cyberattacks. The convergence of AI-driven threats and inadequate security measures poses significant risks, with healthcare institutions particularly vulnerable to breaches.
Cyberattacks are already a top concern for tech companies, but the threat level will reach a new high this year, in part because of generative AI.
Generative AI can help cybercriminals launch more sophisticated attacks on a broader scale. Companies may also be opening themselves up to security vulnerabilities by adopting generative AI without fully preparing for its associated security risks. The UK’s National Cyber Security Centre (NCSC) believes that new capabilities like AI will have a “profound impact on the threat landscape” in the next five years.
Tech M&A Will Continue Slowly in 2024 — but Explode in 2025
Hopes were high for a robust return to dealmaking in 2024. Unfortunately, it doesn’t look like that’s on the agenda for tech.
As interest rates remain high and the economic outlook remains uncertain, we predict tech companies will struggle to make deals. Investors will be scrutinising deal proposals carefully and will be slow to make a move. An optimistic view holds that we could see the global economy stabilise and M&A activity pick up in mid-2024, but we predict the tech M&A market rebound will happen in early 2025.
Tech’s X Factor: Quantum Computing
Amidst these predictions lies the transformative potential of quantum computing. Though currently confined to the realm of research labs, quantum computing holds the key to unparalleled computational power. Once scalable and accessible, quantum computing will revolutionise industries, from healthcare to finance, unleashing unprecedented innovation and reshaping the very fabric of technology.
As we navigate the tech industry and landscape of 2024, embracing innovation while addressing inherent challenges will be paramount. The convergence of emerging technologies and the impending quantum revolution underscores the need for vigilance, adaptability, and strategic foresight in harnessing the full potential of the digital age.
