This insight is part of EY’s annual report on the top 10 opportunities for technology companies for the year. Of which, the firm says that the outlook for the technology industry looks “brighter than 12 months” ago, with the integration of generative artificial intelligence (AI) as a top opportunity for 2024.
Emerging from 2023 where valuations in the technology sector were under pressure from macroeconomic weaknesses, firms have turned to cost savings and rightsizing to help shore up margins, says EY.
As a result, companies saw AI as the most promising of these technologies, offering growth prospects across the entire sector, including hardware, software and services.
However, the report cautions that the majority of organisations are still at a nascent stage of AI maturity. EY urges companies to establish an “AI control tower” to support safe and ethical AI deployments, with humans at the centre.
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The other few top opportunities in technology for the year identified by EY include calls to experiment with generative AI in front and back office use cases, establishing well rounded responses to new tax burdens, better energy efficiency in data centres, and tackling cyber risks through advanced technology.
EY’s Asean technology, media & entertainment and telecommunications sector leader Joongshik Wang highlights that already, technology firms are experimenting with generative AI in areas such as customer care, IT development, marketing and sales.
Meanwhile, he notes that more advanced players are attempting more ambitious technological breakthroughs, such as enterprise order fulfilment, digital twins, supply chain, optimization of energy efficiency and self-healing networks.
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But the lack of skilled talent is a major challenge, Wang adds. “Getting a trained workforce is but a part of the equation. The key to successful adoption is to ensure that the board and management fully embrace the GenAI strategy.”
Wang has observed that there has been a growth of “talent” ecosystems across Southeast Asia to deal with this talent crunch.
Another central theme for technology companies to look out for this year is to establish an additional supply chain in emerging markets. The risk of supply chain decoupling continues to loom, particularly for hardware-oriented businesses, and a race is underway in sub sectors such as semiconductors to realign supply chains in a way that mitigates geopolitical disruption, notes EY’s report.
The firm highlights an emerging trend toward creating operations in emerging markets, including India and Southeast Asia, helping expand operations away from regions exposed to trade conflicts.
Finally, with the growth of AI capabilities, so will the demand for data centres to process such computing power. As such, energy usage is imminently set to accelerate rapidly, triggered by the huge computing power required to train LLMs or run intelligent systems.
EY suggests that businesses respond by collaborating with energy equipment providers to develop innovative ways to power data centres – helping reduce costs in both the short- and long-term
