By Michael Dubois, Head of Corporate at VG Global Holdings

The tech sector is likely to remain on an upward curve in the new year, and will continue to offer the best opportunities for positive returns for investors. It is important that investors understand the landscape and take care to look for companies which are most likely to meet the upcoming demands from the marketplace.

I believe that there are three major areas where this sector will flourish, and it is important for investors to understand these ongoing trends, which will dictate which companies are the best suited to be competitive in the near future and will therefore offer the best investment opportunities.

A number of industries need technology solutions that can facilitate the widespread exchange of data, creating opportunities for public and private investing and M&A, and I believe that the sectors to look out for are industrial companies which need new technology that manages, digitalizes and automates their physical assets, healthcare providers who are seeking solutions that improve productivity and patient outcomes, and any companies which are involved in artificial intelligence, cloud and security, in enterprise resource planning and human resources.

1. Industrial Companies

Many industrial companies in the automotive, energy and construction industries are just starting to use new systems that offer help with managing physical assets and connecting disparate parts of value chains. There are many new opportunities for industrial companies to increase efficiency with such solutions, and many are now demanding software that helps manage their different stages of day-to-day business. Numerous private companies are offering a number of promising solutions, and thereby attracting the attention of large public companies interested in acquisitions.

2. Healthcare Technology

Healthcare is an industry which has previously lagged behind in its adoption of technology, but now it is starting to wake up to the numerous opportunities out there, especially with regards to improving patient outcomes and accessibility to healthcare. There are also serious caregiver labour shortages amid the rising cost of care in many countries. There is a need to expedite complete data sharing between patients’ doctors and care locations, and data-centric healthcare requires technology embedded throughout the continuum of care so that doctors and patients can easily access secure data that is privacy-compliant across care locations. There is also the possibility to move chronic patients from expensive emergency care to more affordable preventative care, as well as AI-backed symptom checkers and gamified apps for patient engagement, or chatbots providing tools for psychological support and therapy. There are many companies which are looking to acquire businesses that offer healthcare software or digital health tools because M&A may cost less than fully developing solutions in-house.

3. Cloud and AI for Resource and HR Planning

Many companies across various industries are turning to technology to streamline internal functions such as enterprise resource planning (ERP) and human resources (HR): in ERP, one of the biggest trends is cloud for deployment, where software is hosted on vendors’ servers and accessed through a web browser at a lower cost than the alternative on-premises. Another important aspect is the use of AI to identify and learn from data patterns, which offers widespread applications for forecasting and modelling, supply chain tracking and customer service; in HR, AI is useful for recruiting, onboarding and employee engagement, and companies are also looking into how blockchain could enable better data security through encryption. Emerging private companies which are innovative and offer advanced technology solutions are the frontrunners offering these ERP and HR capabilities, and that has led to M&A interest from larger companies and private equity firms.