3 challenges facing Europe’s tech leaders in 2022

13 Dec 2021

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Forrester’s Laura Koetzle outlines three major challenges European tech executives will have to address as they face the new year.

In 2022, European technology leaders can expect less volatility than in 2021 – not a high bar to clear – but it won’t be smooth sailing. Brexit’s impact will become clear as Covid-19 recedes, and regulators will draft new rules to protect Europeans as they work from home.

Here are some of Forrester’s most important predictions that will impact European technology leaders’ planning for 2022.

Data protection

Politicians will have to give up their dreams of a sovereign European cloud, but Gaia-X’s transparency and data usage standards will conquer the world.

US-based cloud hyperscalers met European customers’ requirements by clearly describing their existing capabilities, partnering more with local companies and delivering a few new features.

Thus, Gaia-X never stood a chance as Europe’s sovereign cloud but it has pushed providers to be more explicit about how they protect customer data to the benefit of all.

Gaia-X has also kick-started standards for transparency and data usage and raised the profile of initiatives like the International Data Spaces Association (IDSA), which is developing mechanisms to govern the sharing or selling of data.

Technical debt

60pc of businesses in Europe and globally will find themselves with more technical debt post-pandemic, not less.

At a majority of European businesses, the 2020–2021 rush to digital resulted in a prioritisation of speed over maintainability, which will inflate their technical debt in 2022 and jeopardise their ability to modernise their IT organisations.

At one company Forrester interviewed, a lack of shared accountability across business and IT and an IT organisation acting as an order-taker resulted in a patchwork of siloed digital services that left customers frustrated.

Ongoing chip shortage

In early 2021, the entire world started suffering from an acute shortage of semiconductors. This dilemma will not be resolved until mid-2023, and many business and consumer products will struggle with availability and price increases throughout 2022.

IoT devices will feel the pinch particularly hard because they generally use more mature sensors, microcontrollers and communications technologies that have more significant availability issues than advanced chips like CPUs and graphics processing units.

Forrester predicts the IoT chip shortage will shave between 10pc and 15pc off IoT growth in 2022. IoT-based ‘smart’ products like appliances, automobiles and consumer electronics will be unavailable, delayed or overpriced as a result. In turn, this will increase demand for ‘less smart’ equivalents.

In 2022, European consumers will further focus their spending on brands that match their values. Furthermore, Forrester expects Europe’s companies to invest between €2.4bn and €3.3bn in automation to boost productivity. To thrive in this environment, European technology executives will need to be future fit: adaptive, creative and resilient.

By Laura Koetzle

Laura Koetzle is VP and group director at Forrester. A version of this article originally appeared on the Forrester blog.

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