What innovations should businesses look out for in 2016? Making predictions can be difficult at the best of times, but often, if we look hard enough, we can see glimpses of the future in the world we live in today.
At Nesta, the UK’s foundation for innovation, we have the privilege of working with some of the most talented and exciting innovators and entrepreneurs - funding them, supporting them and learning about what they do. We’ve identified trends and opportunities that we think will matter for businesses in 2016. These cover a range of fields, from finance to retail and from media to healthcare.
Most of them include some combination of new technology, creativity and social innovation - all of which are important themes of our day-to-day work. One thing that links many of our predictions is the coming together of two phenomena: digital technology and people power.
The rise of the ‘bank-that-is-not-a-bank’
Nesta has been following and working with the alternative finance sector for the better part of a decade, but over the past few years widespread access to peer-to-peer finance and crowdfunding has drastically changed the way banking looks.
According to research we conducted with the University of Cambridge, the alternative finance market grows by more than 150 per cent each year. Last year saw the first billion-dollar UK business in the space, Funding Circle. With the launch of app-only bank Atom and e-commerce giant Amazon entering the lending market the expansion of the sector is only set to continue in 2016.
We forecast that the coming year will see a range of new developments in the alternative finance sector that business will have the opportunity to respond to, including: the evolution of open banking, data sharing and crowdfunding and the international development of alternative finance.
People-power plus technology: A new business opportunity in healthcare
The healthcare sector has been a tough place to do business for both traditional players and new entrants. In 2016, Nesta believes that companies need to look beyond established and crowded fields like pharmaceuticals or the outsourcing of care.
One area where we’re seeing real growth is healthcare tech. The idea of monitoring people’s health through wearable devices is not new, but with products like Fitbit becoming everyday items, it’s one that is beginning to go mainstream. The challenge for the industry is how best to use the information gathered by these devices.
One project Nesta has been supporting in the area of health tech is uMotif’s 100 for Parkinson’s, due to launch in early this year. The smartphone and web-based project will see patients share data collected using apps and wearables with medical researchers who plan to publish findings in open access journals.
We at Nesta believe that in 2016, it will be the ideas like these - which successfully combine this technology with open data and people power – which will drive innovation in the sector.
Educational technology: Will the bubble burst?
Large scale investment is fuelling an edtech boom – over 1000 startups emerged from the sector last year alone – but unless companies can build creativity into their products a bust maybe on the horizon.
Nesta has been involved in edtech as an investor, a researcher and through running ambitious programmes - for example to promote computer science in the curriculum and coding skills among young people. We see huge potential for edtech in 2016, but only if edtech firms become much more savvy about how education happens, particularly in schools.
It is not enough just to introduce technology into the classroom, companies need to become better at tapping into student motivations. Skills Route, for example, is a new online tool that uses open data on the performance of post-16-year-olds in schools and colleges in different subjects. It helps young people identify providers offering their chosen subjects and predicts the grades they’ll receive.
For 2016 to be the year of edtech, providers need to look beyond the classroom and address the gap in the market for products which allow young people be creators, rather than simply consumers, of digital products.
Collective intelligence: An evolving resource
With more people than ever before skilled in communications, research and content production, collective intelligence is one of the great untapped resources of our time. The potential for harnessing collective intelligence to crowdsource information and ideas is being recognised by governments and businesses alike.
Already, the rise of Internet-enabled collective intelligence is prompting working people to think more deeply about how they collaborate. The practise is also changing politics. In 2015, the Paris City Hall asked citizens to participate in deciding how best to use 5 per cent of the city’s budget, and a similar model of participatory budgeting is being tested in Reykjavík, Iceland.
Nesta predicts that, using the right analytical tools, businesses will be able to harness the views and expertise of the crowd in order to tailor their products of individuals or specific communities.
Stian Westlake is Executive Director of Policy & Research at Nesta