- Investment firms like T. Rowe Price are taking notice of "technology innovation and disruption," highlighting it in market forecasts that help dictate investment priorities for the coming year. For the first time, T. Rowe Price added technology aptitude to a market forecast that assesses the global economy, policy and politics, The Wall Street Journal notes.
- "Disruptive change continues to provide opportunity in the technology sector and has produced some massive winners," said Ken Allen, portfolio manager of the Science & Technology fund and related accounts for T. Rowe Price, in a statement. "Being on the right side of change will be even more critical moving forward as it will separate winners from losers." Across sectors, companies will have to adopt emerging technologies to ensure they can serve the customer and remain competitive.
- The "rapid rate of change" of technology innovation has continued to promote "unprecedented value creation" for early adopters in tech while disrupting incumbents, according to the forecast. In 2018, major trends will continue to solidify, including e-commerce, cloud, digitization and big data analytics, among others.
What technology experts have said for years is now making its way into the mainstream market narrative: Digitization and adopting advanced technology will help companies separate from competitors.
Just take a look at the most valuable companies in the word. Ten years ago, oil giants and banks dominated the list, according to a list from the Journal. But now the top five companies with the highest market cap are all technology giants, including Apple, Google's parent company Alphabet, Microsoft, Amazon and Facebook.
Experts are even forecasting Amazon could reach $1 trillion in value in 2018.
Now, a company's technology portfolio could help dictate whether or not an investment is worthwhile. Linking technology prowess to market value will help increase CIO responsibilities and add weight to their seat at the table and overarching business decision making. It could even help boost IT budgets.
But something to consider with T. Rowe Price's forecast is that its "emerging technologies" list does not include buzzword classics like AI and blockchain. Instead, the forecast focuses on current and available technologies that are driving real, immediate change for companies rather than aspirational tech products. Those technologies are still a few years away from widespread adoption.