Seven predictions for 2015

The new year provides an opportunity to gaze into a crystal ball. Here we predict what to expect in 2015.

1

Internet of things deals surge.

Perhaps the most commonly anticipated trend in 2015 among corporate venturing respondents to our survey (see our January issue) is next year will be about the internet of things. It wasn’t a bad year for the theme in 2014, with the sale of smart thermostat company Nest to Google, Cisco creating a $100m internet of everything fund, and an array of deals by many corporates and other investors in the sector. Yet given Cisco is predicting 50 billion connected things by 2020, up from 3.75 billion now, according to research firm Gartner, this sector is expected to grow exponentially over the next six years.

2

Robot sales take off

Another hot area corporate venturing experts tip is for robotics to take off. It was another year of growth for sales of industrial robots in 2014, with more than 200,000 sold for the first time, according to the International Federation of Robotics. 2015 will likely see this moderate technology growth area move centre stage. At the same time it is fair to assume that rapidly increasing consumer drone use, one of the great robotics commercial success stories of 2014, will face significant regulatory scrutiny, as reports are becoming more common of aircraft needing to avoid drones in the air. 

3

Mining and advanced materials innovation enters the limelight

One big area, which could hold back innovation, is the availability of materials for all the technological innovation we are seeing. To keep pace with Moore’s law – where the number of transistors on a chip doubles every two years – people in the semiconductor market say we need new additions of elements to the periodic table, while many smart devices and new technologies use rare metals,. This means there will have to be significant innovation in the advanced materials sector. At the same time, the mining industry will have to become more efficient and less environmentally destructive to meet the demand for metals.

4

Augmented reality defies the critics

Smart glasses have in some ways been anti-climactic in 2014. The term glasshole has become a common word of abuse towards tech triumphalists sporting their Google glasses. Yet the potential for interacting with the world with computer help also has numerous use cases. This, alongside increased enthusiasm for virtual reality, which will likely remain tools more regularly used by early adopters, points to an increased change in our conscious interaction times await. Exciting and potentially dystopian technology experiences await.

5

Next generation corporate venturing groups double down on success

Many next generation corporate venturing groups have timed the cycle exceptionally and simultaneously made smart bets. Global Corporate Venturing has tracked a doubling of those groups doing corporate venturing to more than 1200 globally since 2009. Some groups which entered the venture world five years ago, at the bottom of the financial crisis, can now claim they have returned to their corporation more than the money they have invested. With this kind of track record, some groups will make even bolder bets to capitalise on the increased standing they have won in their parent corporations.

6

Shake-out begins for unsuccessful groups

The venture world is always a harsh environment to operate in. Winners make huge returns, as we flagged in point 5, but others struggle as the prospects of the promising entrepreneurial ventures they have backed turn out to be worse than expected. There seemed to be a slightly larger trickle of corporate venturing groups letting the industry know at the end of 2014, than in 2013, that they are shutting down their operations, although still the sustained influx of new groups in venture presently far outweighs such strategy re-thinks. Yet watch this space, as early casualties can often precede a proper shake-out. 

7

Growth company valuations fall 

You can have too much of a good thing. The run-up to the new year saw huge values being ascribed to a massive group of relatively new companies. Many of these companies are the future dominant forces in their markets, yet many others will turn out to be worth far less than the multi-billion dollar valuations ascribed to them. Such red ink will inevitably shake venture and growth capital valuations. There are many reasons to be excited about technological innovation and venture capital, with some of those trends picked above, but the last few years have seemed almost too easy for all involved.  Beware.

Our World of Corporate Venturing Survey will close this week. Answer it here for the last chance to respond.