6 Key Megatrends For 2022-2025

by Josh Howarth - May 11, 2022

In 2022, businesses are still facing uncertainty as a post-pandemic world comes into closer focus.

At the same time, trends are emerging that are certain to impact the global economy and business practices.

Businesses will need to explore new technology that can drive efficiency and profits if they want to remain competitive in the coming years. They’ll be faced with changing their perspective on how and where their employees work.

The discussion of megatrends in this report provides insights that are applicable no matter the location or sector of a business. We’ll focus on how businesses can remain agile, constantly coming up with new solutions to tackle the challenges of 2022 and beyond.

1. Rapid adoption of technology continues

In 2020, McKinsey surveyed nearly 900 C-level executives and found that their adoption of digital products and services jumped ahead six years as a result of the pandemic.

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Post-pandemic, businesses are paying even more attention to their organization’s digital transformation. The search volume shows growing interest, too.

Now, in 2022, companies across all industries are accelerating their tech spending.

One survey showed that 60% of companies are increasing their investment in tech and 61% are increasing the number of staff members devoted to tech solutions in 2022.

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Increases in tech budgets have been reported every year since 2015, excluding 2020.

As many sectors of the economy deal with labor shortages, automation is one solution we expect to see companies utilize in the coming years.

The Association for Advancing Automation, an industry trade group, reports that automation orders reached $1.48 billion in 2021. That’s an increase of 37% over 2020.

In the past two years, the healthcare industry experienced significant shifts in the use of tech solutions.

Digital health companies brought in $14.1 billion in venture funding in 2020—the largest amount ever and a 72% increase over 2018.

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In the past seven years, total venture funding in digital health companies and the average deal size have increased considerably.

Omnicell is one company that’s making big moves in the healthcare automation industry.

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Search volume for “healthcare AI” is up more than 250% in the past five years.

The company, which designs automated systems for medication management, has made news lately due to the homicide trial of a nurse who accidentally killed a patient by giving her the wrong medicine.

Omnicell is also investing in retail pharmacy solutions and patient engagement technology. They recently purchased MarkeTouch Media, a pharmacy software provider, for $82 million.

Experts say automated medical solutions aimed at reducing staff errors, enhancing patient safety, and providing a high ROI will dramatically expand in the coming years.

2. Hybrid work environments become the norm

According to a Gallup poll, prior to the pandemic, just 8% of the 60-million Americans in the full-time workforce reported that they could do their jobs at home. In February 2022, that number increased to 39%.

Gallup anticipates that number to fall slightly with nearly one-quarter of the workforce having fully remote capabilities and 53% having hybrid capabilities in the coming year and beyond.

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Gallup’s poll shows a hybrid work environment is preferred by most employees.

The New York Times reports an even more dramatic shift in white-collar workers. Only 6% of these individuals worked from home before the pandemic and, by May 2020, that number had jumped to 65%.

Ladders, a job search website for positions paying more than $100k, reports remote job opportunities made up more than 15% of all high-paying jobs at the end of 2021.

While some businesses may still be insisting that workers come into the office every day, most are not.

A 2022 Buffer survey showed that 72% of employees say their company is permanently allowing some amount of remote work. That’s up from 46% in 2021.

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Finance, one industry that’s been resistant to remote work, seems to be moving toward remote and hybrid work in 2022.

Bank of New York Mellon employees just returned to the office in March 2022, but a new work-from-home policy will allow them to take advantage of two weeks of remote work each year.

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Searches for “hybrid work” are up significantly in the past year.

In early 2022, the stock trading app Robinhood announced its employees would stay “primarily remote” for the future.

Even some government entities are in favor of remote and hybrid work environments.

The state of Connecticut recently announced that its 13,000 employees will be able to work remotely for up to four days each week.

Health organizations are also prioritizing remote work for certain employees.

A Price Waterhouse Coopers poll found that 32% of health leaders said that employee preference was the most important factor in returning on-site or not. More than 20% say they are focusing on implementing a hybrid work environment.

One New Hampshire hospital is offering remote opportunities to employees in human resources, IT, finance, and clinical secretaries.

3. Inflation impacts a wide range of industries

In February 2021, the consumer price index (CPI) started increasing. Inflation was 1.7%, but by November 2021, it was up to 6.8%. In March 2022, it sat at 8.5%, well above the Federal Reserve’s target of 2%.

Inflation is now at a 40-year high.

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Search interest in the “inflation rate” has increased in 2022.

For small and large companies alike, issues with inflation stand front and center: increased costs, reduced inventory, raised prices, and narrow profit margins.

In February 2022, the NFIB Small Business Optimism Index reported that 22% of small business owners view inflation as their single most important business problem.

Goldman Sachs reports similar findings. Their survey results say 84% of small business owners are feeling increased pressure due to inflation, and 76% of those people say inflation is hurting their financial outcomes.

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NBC News recently reported on one example of how inflation impacts small businesses.

An event space owner hosted a wedding in March, but after paying expenses like flowers, decorating supplies, and rentals, she made $25.

In a broader example, manufacturing companies are experiencing extreme pressure on their input costs.

For example, in February 2022, the cost of aluminum was at an all-time high, increasing 15% since the beginning of the year.

An S&P Global survey reported that inflationary pressures are “severe” in the manufacturing sector. In April, input prices were at the highest they’d been in the previous four months, they reported.

Nearly 70% of manufacturers say inflation is likely to remain elevated in the coming year.

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Experts say some manufacturing firms will absorb these price increases internally, but at least a portion of the higher prices will be passed onto the consumer.

Real estate is one industry that can prove to be a hedge against inflation.

Zillow reports that the average home value in the United States has increased more than 20% in the past year, making this a prime industry for investors and sellers.

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Zillow’s home value index shows a steep increase in real estate prices that correlates with the increase in the inflation rate.

The energy industry is also expected to fare well in this inflationary period. Demand for oil and natural gas will continue, and the energy industry is expected to continue passing costs onto consumers.

4. Companies focus on sustainability

Society’s growing environmental concerns have led businesses from various sectors to emphasize sustainability.

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Search volume for “sustainability” has been increasing for the past five years.

Nearly all of the world’s 250 largest companies publicly report on their sustainability performance.

More than 2,000 businesses have committed to achieving net-zero carbon emissions in the coming years.

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Consumer and business interest in “carbon neutrality” is on the rise. Search volume is up nearly 600% in the past five years.

The International Institute for Management Development reports that 62% of executives say a sustainability strategy is necessary to be competitive in today’s market.

Consumer data supports this opinion.

Many people today, especially younger generations, expect companies to be eco-conscious.

In one study, 33% of Millennials (people between 25 and 41 years old in 2022) say they already exclusively buy sustainable products.

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Another study reported that nearly 90% of Gen Zers (people between 10 and 25 years old in 2022) would be willing to spend 10% more for sustainable products. That’s up from just 34% two years ago.

All of this drives revenue and brand value, according to a report from McKinsey. Companies with high ratings for environmental, social, and governance (ESG) factors outperform others in the market, both in the short and long term.

Etsy is one company that’s dedicated to sustainability, and it’s showing in their profits.

The 2022 Rankings of America’s Most JUST Companies ranked Etsy 102nd out of nearly 1,000 companies surveyed. They scored 99 points for their attention to environmental issues, and were ranked first in the retail industry.

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Search volume for “Etsy” jumped dramatically during the pandemic and has remained high.

The company has pledged net-zero carbon emissions by 2030.

In 2020, Etsy’s revenue was $2.32 billion, a 34% year-over-year increase.

Etsy posted an impressive revenue increase in 2021, too, with 16.2% year-over-year growth.

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Etsy’s revenue continues its upward climb.

5. 5G arrives in full force

The 5G mobile network is a new wireless standard that promises to deliver a network with incredible potential.

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Search volume for “5G” is up 2,400% in the past five years.

The technology uses shorter frequencies, which results in larger bandwidth. This translates to higher speeds, improved capacity, low latency, and better service.

The global roll-out of 5G has been delayed for nearly three years, but an IDC expert says, “2022 is the year that the rubber hits the road.”

The Boston Consulting Group agrees.

In the next decade, they estimate 5G will contribute up to $1.7 trillion to the United States’ GDP and create up to 4.6 million jobs.

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Research from The Boston Consulting Group shows a large jump in GDP and job creation by 2030.

The 2021 Ericsson Mobility Report estimated that half of all mobile subscriptions would be on 5G by 2027.

Experts say 5G will lead to smart factories, smart buildings, and smart cities—the entire business ecosystem will see improvements from the new technology.

With 5G, manufacturing businesses are expected to see huge boosts in terms of efficiency.

This includes possibilities for automation and robotic controls in factories.

Accenture predicts 5G-enabled factories will see up to 30% productivity gains and a 50% improvement in assembly times.

The financial industry is also poised to see new opportunities with 5G technology.

Because of its speed, 5G is expected to improve high-frequency trading and cryptocurrency transactions.

It’s also expected to improve fraud prevention efforts because data can travel in real-time.

6. Companies stay on alert for cyberattacks

Cybercrime is a $6-trillion problem and no industry is safe from the damage these criminals can cause.

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Search interest in “cybersecurity” is trending up.

The average cost of a data breach in 2021 was more than $4.2 million—10% higher than in 2019.

The use of 5G mobile networks, third-party apps, and remote work are making businesses increasingly vulnerable to cybercrime.

According to the 2020 Hiscox Cyber Readiness Report, the energy, financial services, manufacturing, pharmaceutical, and technology sectors are the most targeted by cyber criminals.

Disrupting normal business operations is one of the most common ways cyber criminals attack and extort money from companies.

In early 2022, New Mexico’s Bernalillo County suffered a ransomware attack that forced them to shut down government buildings and take their systems offline. It’s reported that the cyberattack was also able to block the county jail’s cameras and prevent officials from operating inmates’ cell doors.

The financial consequences of cyberattacks can also wreak havoc on a business.

Sophos’ State of Ransomware 2022 report says ransom payments have increased nearly five times compared to 2020.

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According to data from Sophos, manufacturing and utility companies have paid an average of $2 million as ransom during cyberattacks.

The increase in ransom payouts has led the United States government to enact a law requiring companies that provide critical infrastructure to report cyber attacks and ransom payments to the Department of Homeland Security and the Infrastructure Security Agency.

Another cyber risk is the theft of intellectual property (IP).

In one survey of North American CFOs, nearly one-third reported Chinese companies stealing intellectual property from their companies in the past 10 years.

Four Chinese nationals were recently indicted for participating in a plot to hack into computer systems and steal IP related to chemicals and infectious diseases. Their plot targeted organizations in 12 counties.

Conclusion

That wraps up our list of megatrends that are expected to impact businesses across all sectors in 2022.

As it has in previous years, technology leads the list as organizations look for ways to embrace automation, robotics, and 5G while maintaining strict cybersecurity.

These megatrends also show us why the businesses that are able to adapt will be the ones likely to lead us into the future. We expect that the way they handle pressures from the economy and the workforce will determine their success.

Written By
Josh Howarth
Co-founder of Exploding Topics.
548 Market St. Suite 95149
San Francisco, California
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