2020 innovation trends in the startup ecosystem

This last decade startups changed our lives. They disrupted everything from daily routines, to how we interact and communicate with each other. As I reflect on the impact technology had on our lives this past decade, I ask myself, what will be the next creative ideas, technologies, or business models to change the world this next decade?

The entrepreneurial spirit of Silicon Valley is characterized by innovation, collaboration, and risk-taking. It provides both the essential motivational framework, the talent, and proximity to inventors and creative thinkers required for tech startups to thrive. This formula makes Silicon Valley a proving ground for ideas that can change our lives. Living and working in this environment, I see more change coming in the next decade that will have a lasting impact. There are three innovation trends that stand out to me where technology has the potential to change our lives, behaviors, and global society in the year ahead.

Social impact takes center stage

Real-life challenges are all around us. Finally, startups focused on solving things like job fluidity, the education gap, climate change, and more are starting to get the attention and funding they deserve. There has never been a better time to be a social entrepreneur!

On a personal level, social impact startups and entrepreneurs, with their passion for meaningful innovation to create positive change, are tremendously inspiring. Growing up, I had a friend who was not allowed to go to school because of socio-cultural reasons. I was in college when I first realized that rural connectivity and online education could have changed her life. That is the sort of change that innovation in this area can drive forward. In 2020 we will start to see more creative ideas in this area, creating viable solutions to better our global society.

Investments in this category of solutions grew by 34 percent to $30.7 trillion over the past two years, according to the biennial report from the Global Sustainable Investment Alliance, which aggregates data from regional sustainable investment groups around the world. This means the fervor for sustainable solutions is catching up to the need. It is even at the core of what large enterprises are looking at moving forward. Corporate responsibility will likely be on every C-Suite agenda heading into this next decade. Data processing, connectivity, robotics, and IoT solutions are all technologies at the forefront of driving real societal change and are ripe for innovation in the years ahead.

Intensifying DeepTech

This next year we will likely see an explosion of DeepTech startups. These are built on tangible scientific discoveries in engineering, mathematics, physics, and medicine.

Rooted in science, DeepTech can span across a broad range of categories from computing to agriculture, aerospace, telecom, energy, and more. According to the Boston Consulting Group, the annual global investment in DeepTech rose more than 20% each year between 2015 and 2018, to reach $18 billion. This is a clear sign of the significant interest corporations and venture capital firms have in this space. The willingness to make significant bets in this sector indicates it is only the beginning for innovation in this category.

I recently met with an amazing startup researching how cells sense and adapt to low oxygen conditions. Understanding this cell-based relationship, and developing technology to improve it, has the potential to significantly decrease the mortality rate of those suffering from lung cancer. This will be the sort of innovation and impact we see in this area over the next decade.

Ubiquitous Artificial Intelligence

How many startups working on Artificial Intelligence (AI) are disrupting the bottom line? The answer today is not that many. As we head into the next decade, companies focused on deeper AI understanding will thrive. Data will be our greatest currency. Technologies that can identify key differentiators within data sets will be game changing.

There is tremendous opportunity for innovation that amplifies human ingenuity. We will see advancements in natural language processing, computer vision, and speech recognition that help people break down cultural barriers and understand each other better, as well as assist doctors and biochemists in improving the way they prevent and treat the world’s deadliest and most confounding diseases. According to PwC, North America will see a 14.5% boost to its GDP as a result of entrepreneurial AI ventures, equivalent to a total of $10.7 trillion and accounting for almost 70% of the economic impact of AI across the entire globe. Innovation in this category is already here, but we will see a lot more of the benefits in the next decade.

The good news for startups in 2020 is that a lot of the sunk costs for developing underlying algorithms has already been absorbed and many open-source tools like TensorFlow, scikit-learn, and Hadoop are available through Azure. Responsible development will also need to be at the core of all future AI enabled solutions. Successful entrepreneurs iterating on deeper AI understanding, must think through the basic parameters of Ethical AI and be able to calibrate models that remove unconscious bias that might exist in the underlying data.

Opportunity ahead

While I am excited for these categories, there really is no crystal ball for what the future will be. Disruptive technologies entering the market can fall into any number of categories. Areas like 5G, edge computing, and prescriptive analysis are also ripe for innovative breakthroughs.

This is why Microsoft For Startups is focused on building relationships with entrepreneurs. Understanding their ideas helps me see the full picture of what they are trying to do and how they can grow for impact, rather than fit in any one industry. Corporate Innovation, the way we enable startups to jointly sell to our enterprise customers, continues to be the cornerstone of how we invest in the success of startups and our enterprise customers. Any entrepreneur that can clearly communicate the change they want to effect, and people they want to reach, is a potential partner. If you want to do great things, we are here to help!

As we hand off the baton of one decade to another, here is wishing all the entrepreneurs, the budding disruptors, the misfits, and the crazy thinkers a stellar 2020 and beyond!