S3T Jan 5, 2024 - Common themes from the top 2024 Outlooks & Forecasts
Happy Friday! Welcome to the S3T Edition for Friday January 5 2024:
- Prediction Season is here again - A slew of new forecasts and outlooks for 2024. I've pulled together themes from the leading 2024 forecasts and across healthcare tech and financial innovation so you can focus on what you want to be ready for this year.
- Last year's AI hype cycle created high expectations about what can be done with AI. There will be a big focus this year on finding AI use cases that will are actually doable and deliver real world value. So this week we have a special feature where I share a framework with 8 proven questions I've used to identify actionable AI use cases that led to real world results.
🔮2024 Outlook: Top themes from the forecasts
Prediction Season is here again - A slew of new forecasts and outlooks for 2024. I've pulled together themes from the leading 2024 forecasts and outlooks across healthcare, tech and financial innovation so you can focus on what you want to be ready for this year. If you are thinking about where to focus your career, or other teams, or what your next product or platform should offer, you'll find helpful insights in these key themes. Let's dig in!
🏥 Healthcare innovation will drive costs up
Cell and Gene Therapies go mainstream: Keep an eye on the FDA's anticipated approvals of a range of CRISPR-based gene therapy approaches.
Weight loss drugs and a new understanding of what drives obesity will put pressure on insurers (and Medicare) to find ways to make these drugs affordable. See Morningstar: 5 obesity drug trends to watch in 2024.
Bottom Line: we haven't really begun to solve the foundational financial problem in healthcare - costs will be going higher than ever in 2024. We have to look at the financial layer of healthcare and be willing to rethink the economic mental models we have about moral hazard, risk transfer and inclusion.
The platforms and processes that run US healthcare today were designed in an era when far fewer people had insurance, far fewer conditions were considered treatable, and when it was considered permissible to exclude people from care if they lacked the preferred financial and health characteristics. Today we are in a very different world. The math of healthcare has changed. Our values have changed. Unfortunately our platforms and processes (and the financial model that justifies them) still need to catch up.
For a comprehensive learning paths on this topic, here are two options (for paying members):
- Recommended Reading for Healthcare Leaders - a curated list of books and online resources that bring more complete perspectives to the issue of healthcare affordability and how to achieve it.
- Moral Hazard - based on a 3 part series originally published in S3T. - diagnoses the flawed economic mental model that continues to encumber healthcare.
🏛️ Politics & economics may be more entangled than usual
Elections will occur this year in nations that make up 60% of the world's economic activity. Allianz worries about political turmoil impacting economic outcomes this year. The OECD predicts a mild slowing in global economic growth in 2024 (and resumed growth in 2025).
The Conference Board notes that - in spite of the Fed's ideas about a "soft landing", the US economy faces a concerning mix of rising consumer debt, dissipating savings amid still high interest rates. Supply chain bottlenecks from the pandemic are mostly over but the global supply chain is still being reorganized due to deglobalization.
Commercial Real Estate is in for another rough year, Fitch ratings sees office vacancy rates jumping from 13.5% to 15.7% in 2024, and loan delinquencies rising to 8.1%, thanks in large part to remote/hybrid work. Fitch predicts 2025 will be even worse.
See also:
- JP Morgan: 2024 Economic Outlook: 10 Considerations for the US Economy
- HBR: What to Expect from the Global Economy in 2024
- Thomson Reuters: Geopolitical & economic outlook 2024: Democracy and the splintering economy
🤖AI Companies hunt for marketshare (caution!)
AI startups raised $50 Billion in 2023 (2nd highest in history). To start generating ROI, these companies will need to aggressively woo "qualified targets" (larger companies with larger budgets) in 2024. Early indicators suggest this won't be easy in part due to the legal minefield surrounding Gen AI model training methods.
If you are part of a midsize or larger enterprise, expect to be targeted by aggressive sales teams from young AI companies. To protect yourself, you need to align internally on which use cases you actually have that are realistically actionable this year. See special segment below: 8 questions to determine if you have an actionable Gen AI use case.
Other AI themes:
- AI Nationalism will continue to accelerate and become a key factor of geopolitical competition. See Blockchain Council: Era of AI Nationalism and HBR: AI and the New Digital Cold War.
- AI negative impacts to STEM jobs - some anticipate that the age of hyper capable AI will reduce the demand for STEM workers, and increase the demand for a new kind of creative and empathy skillsets. This aligns to the S3T worldview that a blend of change leadership skills will be crucial for the 21st century.
- AI positive impacts to offshore jobs - Something you might not have thought of: GenAI + Offshore: “English and writing is the weakest link and that is where AI will be a game changer.” - Nick Huber (see screenshot below of a conversation about offshore employees).
🎢 Crypto's next roller coaster ride takes off
Crypto winter is over. Institutional investors will pile into crypto once again, especially if the SEC approves some or all of the ETF applications. Europe and the Middle East are moving forward with more clarity on crypto regulation - will the US follow? The US courts will be busy but many doubt we'll see laws passed in this election year.
Convergence between DeFi and TradFi: “As 2024 approaches, we are entering a new era - one that will feature trusted utility, adoption by traditional financial institutions and regulatory alignment” Eric van Miltenburg, SVP Strategic Initiatives at Ripple.
The blockchain industry now has 239 different blockchains, ranging from Ethereum, Solana, Polygon to dozens you've probably never heard of. While Ethereum emerged from the crypto winter as the dominant chain, other chains are finding their niches. In 2024 these chains will continue to evolve: we're familiar with public vs private blockchain categories, but now in the public blockchain category expect to see a new dividing line between blockchains that are modular (Celestia, Cosmos) vs monolithic (Ethereum).
This potentially is going to set up a blockchain ecosystem with a lot of room for niche players who can specialize in playing specific roles for specific use cases. If that happens (and if we can ensure common interoperability standards) I think that would be a nice departure from the Big Tech pattern we have currently where 5 or 6 giant companies dominate the market.
What to watch/explore: Convergence between AI and Blockchain: Blockchain can be used to track ownership of data, and control its usage - for AI or other purposes.
- Renz Chong, Breeder DAO
🌍Climate Change, Biodiversity Loss, and Water Crisis.
Expect increasing attention on relocating coastal communities. This has been a developing theme for some time, as communities and agencies alike recognize that coastal protection structures will not be able to protect against 2-7 feet rise that is forecast by the NOAA. It will likely come to the forefront as communities, insurers and local governments struggle to maintain community safety and services amid increasingly extreme weather events. See also: US Climate Resilience Toolkit and Fuji's Plans.
Also: Mariana Mazzucato connects the dots on the roots of the severe inequities in water access around the world.
Final Note: Favorite Quote from Syntax of the River
“But if you write good stories, then people who are capable of writing good policy will write better policy for having read the stories.” - Barry Lopez, Syntax of the River (a great book I'm currently reading!)
Special Feature
Paying Members click here for the full version of this framework with real world examples.
🌟How actionable is your Gen AI use case?
In the dynamic world of Gen AI, identifying legitimate and actionable use cases is crucial. This is especially important for change leaders who naturally want to find ways to harness emerging technology for good.
Unfortunately it's not always easy to figure out exactly where and how an emerging technology like AI can be used. This may sound counterintuitive, but if you've actually delivered AI solutions that had real world impact, you know the trial and error that it took to get there.
I've been fortunate to be part of teams that delivered highly impactful AI models for healthcare, and there's nothing like getting feedback from patients and healthcare workers about how your solution helped them in a positive way. At the same time, I'd love to help others avoid some of the trial and error we had to go through in order to find the use cases that were actually impactful.
This guide offers a clear pathway to determine if your Gen AI project is set for success.