If anyone needed a reminder that industrial transformation is no longer a nice-to-have, 2022 was a huge wake-up call. Russia’s invasion of Ukraine throttled a delicate recovery from the covid-19 pandemic, scrambling global markets in energy, food and more. As we watch captains of industry pivot to face this new reality, technological innovations are gaining renewed cachet as a vital part of the path forward.
Entering 2023, we are witnessing growing enthusiasm about advances in automation, artificial intelligence (AI), renewable energy, battery technologies and much more. Our rundown of the six top industrial technology trends to watch this year proves the old maxim that ingenuity often flourishes in even the most uncertain times.
TREND 1: Additive manufacturing
Covid-19 revealed the fragility of complex global supply chains, catalyzing a shift toward nimbler locally-based production. While large factories cannot spring up overnight, additive manufacturing—essentially, 3D printing—could grow in value as a way to de-risk production and supply chains for a growing number of products and end uses. This is why analysts predict a whopping 21% compound annual growth rate for the technology between end-2022 and 2030.
TREND 2: Batteries
The unsung heroes of the energy transition, batteries have been on a wild ride recently. After years of steady cost declines, supply-demand imbalances and massive global disruptions finally caught up to the sector in 2022, with cell prices losing several years of progress. Innovation is needed to keep the lithium-ion battery cost curve on track; this may also open a window for non-lithium chemistries (e.g., sodium-ion) to take some market share in stationary and entry-level mobility batteries. Which way will prices go in 2023?
TREND 3: Carbon removal
2023 started with a bang with an announcement by Swiss startup Climeworks that a third party verified that Climeworks successfully collected CO2 from the air and stored it underground—a first for the emergent sector. This follows a record year for deployment of capital meant to drive implementation of direct air capture and storage (DACS). But can the technology live up to its promise and deliver CO2 offsets at scale—meaning at significantly lower costs than players like Microsoft are currently paying? Will the demand for high-quality carbon offsets from large corporates implementing their net-zero strategies continue to grow?
We hope that by the end of 2023, market signals will point toward definitive “yes” answers to these questions. This will signal a big turning point in global voluntary carbon markets (VCMs)—a promising space for corporate decarbonization, but one which needs to address concerns around quality, verifiability, transparency and permanence of offsets. Alongside burgeoning efforts at standardizing and consolidating disparate VCMs around the world, the rise of DACS as a viable offset strategy could accelerate growth of the market in the not-too-distant future.
TREND 4: Renewable indoor climate control
Heat pumps have gone from a curiosity to a staple of residential use seemingly overnight. Europeans are rushing to get their hands on them as gas-fired heating becomes a risky proposition amid war-induced high prices (despite an unusually warm winter so far). These electric gadgets—when hooked up to clean grids—are also a big boon for the climate, so much so that America’s Inflation Reduction Act includes generous subsidies for them, making non-polluting indoor temperature control a big trend to watch in 2023.
TREND 5: Hyper-automation
The covid-19 pandemic accelerated long-running shifts in labor markets as Baby Boomers retired, people left their jobs on masse and hybrid work entered the mainstream. At the same time, technological progress in AI—especially computer vision and deep learning—continues apace, giving powerful, affordable new tools to warehouse and factory managers.
We expect 2023 to offer promising investment opportunities in robotics automation—one of the few nascent sectors that enjoyed robust growth in 2022. The mobility space in particular is surging ahead, with auto companies like Tesla and Hyundai developing or acquiring their own industrial robot arms and others like Magna and ZF nudging into automated delivery. This should help carmakers deploy the autonomous driving technology they’ve been developing into new markets like factory floors.
TREND 6: Synthetic fuels
Few good solutions exist for decarbonization of the maritime and aviation sectors, but this does not absolve them from reducing their emissions footprint. Electrification is still years away and will not likely be feasible for all applications, and hydrogen is tricky to make and work with. Sustainable aviation fuel (SAF)—largely made from biomass—green methanol and green ammonia are all being touted as the key to unlocking significant CO2 reductions from these sectors.
Yet questions abound about how the supply of these so-called synthetic fuels—also known as synfuels or e-fuels—can be scaled up quickly and at reasonable costs. What are the major innovations needed to support the transitions? Will the industry be able to match supply with demand for sustainable fuels? We hope 2023 will provide at least some answers to these questions.