Everyone wants to know what will happen this year, but predictions are only as good as their implications on our lives. I spent last week reviewing some of the top analytical reports to find commonalities between analysts and checked their predictions against real economic data as well as applicability of their predictions in today's business environment. I eliminated the obvious things, such as "robots will walk the streets of New York in late 2019" as well as some that predict a global apocalypse due to the heated U.S. political climate. All of these were eliminated because they are not based on any real data.
As a result, here are eight that I found most credible, backed by solid data and with significant impact on entrepreneurs.
Stock market, managed by algorithms, will keep swinging
90 percent of all stock trading is done by algorithms, whereas standard stock picking based on fundamentals is in such a minority that it is almost irrelevant in the large scheme of things.
Robot advisors are 100 percent cheaper and lack any human emotion when it comes to individual companies. According to Marko Kolanovic of J.P. Morgan Chase, "big data strategies are increasingly challenging traditional fundamental investing and will be a catalyst for changes in the years to come." Many analysts predict that political instability, international trade wars, and tightening credit markets (outside of China) will make algorithms change strategy quite often, causing massive market swings in 2019 similar to those we have seen in late 2018. Entrepreneurs need to know that these swings are not necessarily representative of the economic reality and should not panic next time the Dow Jones goes down 5 percent in a day.
Self-driven cars will actually hit the road in 2019, and there is a law that will be passed to allow for it
Self-driven autonomous vehicles are going to hit the road commercially in 2019, mainly thanks to GM's Cruise Automation unit and Alphabet's Waymo subsidiary. The autonomous business is also supposed to grow to about $280 billion by 2030 and is going to revolutionize the way we drive. U.S. Senators have been negotiating for over a year to pass a bill called AV START, which would pave the way for a regulatory framework that would govern autonomous cars. The bill would also relax many of the federal regulations pertaining to self-driving vehicles. Autonomous vehicle manufacturers like Google's Waymo, Tesla and General Motors will be able to develop and market these vehicles without specific regulatory action. Additionally, the bill will allow for the collection of crash information federally for Level 2 self-driving systems like Tesla's Autopilot and GM's Super Cruise. Entrepreneurs building logistics businesses, e-commerce, and those whose car leases are up should watch-out for completely new steering wheel-free vehicles coming out end of 2019.
5G will get rolled out in the U.S. in Q4 2019 and will significantly affect speed of everything
According to Deloitte, the highly anticipated 5G launch will actually take place in the U.S. this year with over 1 million 5G enabled devices sold by end of the year. "It won't happen overnight, but 5G will profoundly change our interactions and experiences, which is good news for consumers as they demand better performance and more access to content," said Kevin Westcott, U.S. telecommunications, media, and entertainment sector leader at Deloitte, in a statement for VentureBeat. "Higher speeds and lower latency will enable new and innovative consumer experiences in areas from augmented reality to entertainment to medicine and smart cities." 5G will change how entrepreneurs think and how fast they work, hence watch-out for globalization of start-ups and an ability to work and share large chunks of data from anywhere in the world in seconds.
AI will keep improving customer experiences
According to the PWC's Global Artificial Intelligence Study: Exploiting the AI Revolution, Artificial Intelligence will contribute $15.7 trillion to the global economy by 2030, which will boost some local economies' GDPs by 26 percent. The greatest economic gains from AI will be in China (26 percent boost in GDP) and in North America (14.5 percent boost).
In 2019 AI will contribute to better personalization of consumer experiences - better quality airline chat bots, more personalized search recommendations and more precise healthcare diagnostics. Entrepreneurs should pay special attention to automation in machine learning disrupting various traditionally labor-intensive industries, such as healthcare, financial services advisory and advertising, all of which will be greatly affected by AI in 2019 and beyond.
Trade tensions will intensify between nations disrupting commerce and travel
Trade disbalance has become a political topic since the 2016 U.S. elections and caused havoc for many international companies. The narrative of rebalancing trade has been a populist tool for many politicians and will continue into 2019 when either parliamentary or presidential elections will be taking place in such countries as Canada, Argentina, India and Ukraine. Moreover, Brexit negotiations are not over and will continue deep into 2019 and there is still a lot of uncertainty between the U.S. and China. Trade disbalance of the U.S. to China which equaled to almost $400 bln last year will be a point of contention between the two countries and further disrupt global trade. For what it's worth, China started arresting individuals from Canada, the U.S. and other western countries as a response to the arrest of the Huiwei's CFO in Canada and its sales director in Poland. Russia has done the same with the arrest of Paul Whelan on charges of espionage, which he and his family denies. All of these developments will also affect the travel industry where people will start thinking twice before flying to countries that are perceived as adverse to their homeland.
Voice industry will continue growing and expand beyond Alexa and Google Home
Voice is going to become 10x smarter in 2019 than it was in 2018. Moreover, it is a good business. Voice shopping on Alexa alone will reach $5 bln in 2019 and will continue growing afterwards. Global ad spending on voice assistants -- currently nonexistent -- will reach $19 billion by 2022, nearly the size of the current magazine ad business, per Juniper Research. In 2018 Google Assistant managed to answer almost 90 percent of the 800-questions test correctly and it is predicted that it will get to 99 percent right in 2019. However, voice will move beyond Alexa and Google Home and will become an integral part of new vehicles, refrigerators and security systems. Many of the new voice integrated devices will hit the market in 2019, powered by one of the tech giants, and will make us converse more with machines. Entrepreneurs should take advantage of the opportunity and jump into the voice trend by training Alexa on new skills related to their businesses. Skill development is free, but it takes some time to learn how to do it correctly.
TV sports betting will become mainstream nationwide and will drive viewership
The aforementioned Deloitte study states that in the U.S., sports betting will drive about 40 percent of all TV watching by men 25 to 34 years old. Deloitte predicts 64 percent of North American men ages 25 to 34 who watch sports on TV will also bet on sports. This will change the reason why many people watch TV and how sports programming is marketed. There is an opportunity for start-up betting companies to partner with OTT providers to create new rev-share business models.
Unusual emerging markets will become new tech hubs
Due to ongoing government investment in technology and entrepreneurship, new tech hubs will become important in 2019. Such cities as Karachi, Nairobi, Krakow and Lviv will be raising the bar in technology, co-working spaces and start-up lifestyle. For instance, Karachi (Pakistan) organized a large tech conference called Momentum that drew 15,000 attendees connecting 400 start-ups with local and foreign investors in 2018. Similarly, IT Arena in Lviv (Ukraine) is expected to drive over 4,000 participants and over 100 speakers in 2019. These tech hubs, accelerators and events will help democratize the world of technology and bring new ideas to the wider audience in 2019. Hence, if you are a tech entrepreneur or investor, look beyond Silicon Valley or New York for the next Uber, Facebook, or Dropbox.