2021 may have been a new year, but the onus which Covid-19 placed on businesses to be agile in the face of adversity remained. Tech innovation continued to define almost every industry’s approach to change.

But the fast pace of change can open the door to challenges in terms of cybersecurity, inequality, and regulation at the same time - so what does this mean in terms of the trends we’re likely to see in 2022?

To mark the end of another challenging 12 months, the editorial team at National Technology News have rounded up a host of industry experts to tell us their top technology predictions for the year ahead.

UK tech investment will flourish outside London

More money than ever is flowing into the UK’s technology industry. Over £29.4 billion was invested this year, over double last year’s figure of £11.5 billion according to the UK’s Digital Economy Council. However, the UK tech industry has traditionally been extremely London-centric, and its rewards have not been shared equally.

This may not be the case going forward. Tim Mills, managing partner of ACF Investors, believes that though London and the other “Golden Triangle” cities of Oxford and Cambridge “have historically taken the lion’s share of early-stage investment in the UK” the “trend looks to finally be shifting”.

He added: “The major factor behind this is the depth regional ecosystems are beginning to reach: a stage of maturity that means there have been a few generations of start-ups, creating tangible success stories and repeat entrepreneurs”.

Mills highlighted the emergence of video conferencing as a factor which is helping the regions outside London, “the realisation that you can do things remotely has led many investors (and would be customers) to think differently about regional business.”

He added: “This simple change is democratising access to early-stage investment in the regions in a way never seen before - it took a pandemic to do it, but the whole UK technology ecosystem will be better for it”.

In addition, Mills believes that certain cities will pull out ahead of others, with “cities such as Manchester, Edinburgh, and Bristol leading the way and Belfast, Cardiff, and Newcastle in pursuit.”

He added: “I expect that in 2022 we will begin to see an accelerating flow of talent working its way towards these centres of regional expertise.”

In 2021, almost £9 billion of all VC invested went into start-ups and scaleups outside London and the Southeast according to the Digital Economy Council research, with Cambridge taking the lead, narrowly beating Manchester.

Saj Huq, director of innovation at the government-backed London Office for Rapid Cybersecurity Advancement believes that government intervention will lead to “local authorities having more of a say in where their technology industries are headed” and will “drive innovation in critical areas, resulting in a boom in the science and technology sectors”.

“In 2022 and beyond, government-led innovation will become hyperlocal and led by the LEP Network and local authorities,” said Huq.

The executive believes that the recent introduction of certain government initiatives will spur on tech innovation, particularly in certain fields.

“Now that we have the Council for Science and Technology, the government will ramp up innovation in areas like AI, quantum computing, and life sciences that are strategically important to the UK.”

He added: “It will similarly direct innovation and collaboration towards both defensive and offensive cybersecurity – something that is too connected to national security to leave to the market alone”.
In August, PWC predicted London’s population could decline for the first time in the 21st century.

The Big Four firm said the drivers of this would include city-dwellers rethinking their living situations in the wake of the pandemic, a smaller number of graduates arriving in the capital due to the rise of remote working, and reduced immigration.

Mergers and acquisitions (M&A) activity could slow

Global dealmaking and investment in the tech sector proved red hot globally in 2021, with the UK proving absolutely no exception. Mergers and acquisitions of UK firms by foreign companies were worth £27.7 billion between April and June this year, reaching the highest point since the end of 2018, according to figures from the Office for National Statistics (ONS). However, patterns of M&A activity could change markedly during the coming year.

Danny Allan chief technology officer at cloud computing company Veeam thinks that even though 2021 saw global M&A activity reach “new highs aided by low interest rates and high stock prices” that 2022 could “see that momentum shift”.

“Larger acquisitions will be few and far between as company valuations continue to rise. Only well-established, cash-rich companies will have the money required to make new purchases.

He added: “The higher purchase threshold will make it harder for medium and small-sized companies to grow and evolve, giving the advantage to larger, established firms.”

Jeremy Whiteson, partner at law firm Fladgate believes the tide might turn when it comes to global enthusiasm regarding technology investment: “one feature of the recent investment boom is a fixation with all matters tech”.

“Many investors will have funded businesses in the hope of selling them on for more but with no clear path to profits. Many rely on new ideas which are untested.”

Whiteson believes these changing attitudes could hit some sectors more than others, and this could see “some tech sectors falling out of favour quickly”.

He added: “Many will have high cash burns and if that means that they fail to secure the next funding round they will quickly need an insolvency or restructuring solution”.

Cyberattack targets will continue to diversify

Unfortunately, it’s not just the technology companies that are innovating. Cybercriminals too have been rapidly changing not just how they go after their targets, but the type of targets they select.

Several of the year’s most high-profile attacks have involved cybercriminals targeting organisations via infiltrating the systems of third parties, which are known as “supply chain” attacks. This is a trend which some in the industry expect to continue into 2022.

According to Michael Heywood, supply chain security lead at cybersecurity vendor HP Wolf: “We’ll see supply chain attacks continue to rise over the next year as threat actors search for weak links in software supply chains, targeting software being used widely and globally, or used by a specific company.”

Joanna Burkey, chief security officer at HP Wolf, believes this approach could create economies of scale for threat actors: “With the Kaseya breach – which impacted over 1,500 companies – we saw that supply chain attacks can be financially rewarding.

“This could lead to the continued commoditization of the tactics, techniques, and procedures (TTPs) used to conduct such attacks.”

She added: “This only adds fuel to the fire, giving threat actors more than enough motivation to exploit software supply chains in the next year.”

Both small market business (SMBs) and more high-profile victims may be equally targeted by the rise of supply chain attacks.

“Kaseya demonstrated a pathway to monetization for independent software vendor (ISV) breaches,” said Ian Pratt, global head of security for personal systems at HP Wolf. “This should be a wakeup call to all ISVs that even if their customer base doesn’t consist of enterprise and government customers, they can still be caught in the crosshairs of attackers looking to exploit their customers.”

He added: “Now that this blueprint is in place, we could see these types of attack become more widespread in the year ahead, targeting both SMBs and high-profile names.”
As home working shows no signs of disappearing it’s no surprise that some cybercriminals are looking at how social media can be leveraged for nefarious ends in 2022.

“As usage continues to spike, we’re seeing an increase in cybercriminals weaponising social media by reaching out to individual executives with seemingly legitimate job offers, before convincing them to download a job spec that is in fact malware,” said Fabien Rech, EMEA vice president at McAfee Enterprise. “With lines between the home and the office becoming increasingly blurred – for example, over the festive season, 73 per cent of organisations expect at least half of the workforce to be working remotely - we’re seeing employees connecting to their social media accounts via work devices.”

He added: “This opens up further opportunity for hackers to exploit social channels, as while criminals could be targeting an individual executive, the end goal could be accessing broader sensitive business information.”

The United Kingdom was the second most-hit country in the world in terms of ransomware attacks in the first half of 2021, suffering 14,603,315 attacks according to research from cybersecurity vendor SonicWall released in July. Some tech leaders believe this trend is set to continue.

Saj Huq from LORCA believes that the threat of ransomware is “unlikely to go down in 2022 - in fact we’re likely to see even more small and medium sized businesses fall prey to attacks as Ransomware-as-a-Service (RaaS) becomes widespread”.

He added: “But we will see start-ups offer up technology solutions that will protect individuals and businesses of all sizes from ransomware.

“A lot of this will be down to getting the basics right: training staff to spot phishing attempts, making enterprise-grade cyber affordable for SMEs and having a backup process in place.”

Online platforms will see greater regulatory scrutiny

Though social media platforms were highly profitable over the pandemic and were clearly marked out as winners despite the disruption, you would not have needed to look very hard for critics of these same platforms over the past year. 2021 was a year in which regulators, governments, and the public acknowledged the power of platforms to influence the young.

The recently appointed culture secretary, Nadine Dorries, warned in November that tech giant bosses could face criminal prosecution at a meeting of the Online Safety Bill, if they don’t remove their “harmful algorithms”.

Some tech leaders anticipate this regulatory crackdown in the interests of the young will only continue.

“2021 saw increased scrutiny of online businesses that have been seen to fail at protecting minors, primarily in the social media sphere,” said chief executive Robert Prigge at Jumio, an online mobile payments and identity verification company. “As we move into a new era of accountability, any online businesses which operate in an industry where potential harm could be caused to minors, from adult-content to selling alcohol, need to seriously address how they prevent underage individuals from accessing their site - not least because it now forms part of the Online Safety Bill.”

He added: “Our research on this topic showed that 54 per cent of UK age-restricted sites have been unable to prevent minors from accessing their products or services, but this will no longer be acceptable.”

Prigge believes that 2022 will “see more businesses looking at how they can implement appropriate age verification technologies at the account opening stage so they can begin to tackle the issue of protecting minors from the point of sign up”.

According to the NSPCC, the number of online grooming cases recorded by police increased by around 70 per cent in the past three years, reaching an all-time high in 2021.

The Metaverse will stay in the headlines

Even though the Metaverse and non-fungible tokens (NFTs) only entered most people’s vocabularies relatively recently, many tech leaders believe they will be words that will remain in the technology news cycle over the coming year.

The Metaverse describes a new phase of interconnected virtual experiences using technologies like virtual and augmented reality, according to Meta, the company formerly known as Facebook.

“The rebranding of Facebook to Meta made clear where the future of the company will lie,” said Guido Groet, chief strategy officer at Luxexcel, a smart lens manufacturer. “Zuckerberg's perspective on the importance of the Metaverse shows that the company already has had thousands of people working on the it behind the scenes”.

The executive remains enthusiastic about the BigTech firm’s chances in the burgeoning field: “The fact that Meta is putting its weight into the augmented reality (AR) and virtual reality (VR) industry shows that the leader of this race could be an obvious one.”

Matthew O’Riordan, co-founder and chief executive at API-provider Ably, believes that companies need to go beyond offering Metaverse features to garner a competitive advantage, and that their implementation is also key.

“Whether it’s incorporating digital holograms, data overlays, interactive data, or augmented objects, real-time features will play a huge role in making the virtual world feel like the physical,” he said. “Imagine attending a virtual concert, if each reaction and emotion of each individual concert goer isn’t perfectly synchronized and delivered in real-time, then the experience will feel out of sync.

“The same is true for a virtual meeting. If attendees are unable to react or collaborate in real-time with each other, there’s no benefit to using VR and AR.”

O’Riordan believes that the provision of real-time capacities will be a key factor in who controls the burgeoning Metaverse.

“It will be those companies that can synchronise millions of concurrent connections in real-time that will emerge as the leaders in this next phase of evolution of AR and VR,” he said.

Non-Fungible Tokens (NFTs) will stay on trend

An NFT is a unit of data stored on a digital ledger - or a blockchain - that certifies the uniqueness of a digital asset. Some tech leaders believe that the popularity of NFTs is here to stay.

Ethan McMahon, economist at Chainalysis, a blockchain data platform, anticipates that “the NFT market will continue to evolve over the next year, as more artists, creators, celebrities, and even video game makers launch collections catering to their fans, along with many other use cases that haven't even been invented yet.”

However, McMahon believes that the rewards of the burgeoning popularity of NFTs will not be shared equally: “We’ve also identified that only a tiny group of highly sophisticated investors rake in most of the profits from NFT collecting.”

He added: “This is especially true in minting, where the whitelisting process gives early supporters of collection access to lower prices that result in greater profits.”

McMahon believes this inequality could only worsen over the coming year: “We predict investment techniques, such as the use of bots by investors looking to purchase during minting events, will continue to develop and could potentially shut out less sophisticated users.”

The popularity of NFTs could also see regulators giving them increased attention, as any new technology can bring the potential for new types of criminal activity along with it.

Some key players in the NFT sales and trading market have limited KYC or anti-money laundering (AML) procedures, claimed Ana Lucia Salazar, sales manager at identity verification platform IDnow, which “is bound to attract hackers and scammers”.

“The major players in the industry as well as the regulators will be looking to bring NFTs into a safe space to protect people who create NFTs, buyers of them as well as individuals and institutions who are looking at NFTs as a serious investment,” she said.

Some of the tech leaders we spoke to said that practical use cases will become prerequisite for successful NFT projects in the coming year, as technology matures.

“Utility will become paramount to the success of any NFT project, whether that means granting exclusive access to smaller communities, enabling recurring revenue for the holder, or simply as in-game items,” said Nick Saponaro, chief executive of cryptocurrency firm the Divi Project. “Profile picture projects will begin to fade away.”

“Initial Game Offerings will become popular, and gaming will take its rightful place at the forefront of cryptocurrency and blockchain.”

He added: “Expect the larger organizations like Gamestop and Epic to begin making plays at some point in 2022.”

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