Sustainability is driving the emerging tech investment agenda

The fourth edition of the EY Reimagining Industry Futures Study reveals that enterprises’ emerging tech investment decisions are increasingly driven by sustainability and ESG goals.

Of the 1,325 enterprises surveyed, 76% view ESG as a leading or important investment criteria, with 5G investment most likely to involve ESG as a leading or important principle (cited by 81%). Underpinning enterprises’ conviction, 76% believe emerging tech can play a critical role in reducing their organization’s carbon emissions.

When it comes to selecting an emerging technology vendor, 77% of respondents say they will prioritize those that understand the environmental impact of their tech. And while today “speed of deployment and execution” and “end-to-end solution capabilities” rank respectively as the top two vendor attributes, when looking to the future, enterprises rank “sustainability capabilities and credentials” as the top criteria, ahead of “competitive pricing” in second place.

Adrian Baschnonga, EY Global TMT Lead Analyst, says: “As enterprises become more attuned to the opportunities that 5G and IoT offer in driving growth, vendors must proactively respond to evolving use case demands. Critical to this agenda is effectively mapping solutions to changing business needs, while also harnessing 5G and IoT with other technologies such as artificial intelligence and edge computing to maximize their collective impact.”

Enterprises indicate that emerging tech provides a breadth of positive contributions to their sustainability ambitions. Reduced energy consumption (46%) tops the list, while improved sustainability measurement (39%) and planning (39%) rank high. However, perceived benefits vary by industry: 54% of automotive enterprises cite reduced energy consumption as a leading benefit, falling to 38% among health care respondents; and reduced waste is favored by 50% of manufacturing respondents compared with only 35% of government organizations.

Beyond the sustainability imperative, the study further reveals that levels of investment are rising for all eight emerging technologies tracked in the study, with 5G and edge computing showing the largest increase – both up 4% year-on-year. 5G has the most active profile in terms of future investment, with 57% planning to invest within three years. At a regional level, Americas enterprises lead 5G investment today, with 35% currently investing – up 15% year-on-year. Levels of current and planned investment in Europe and Asia remain stable year-on-year, with the findings indicating that respondents in Asia may be deferring investment.

Notably, enterprises’ 5G and IoT strategies are more oriented toward growth this year. Thirty percent of respondents cite “overhaul existing business models” as an important driver of IoT spend, up from 25% last year. And 5G-IoT use cases such as virtual and augmented reality (cited by 50% of respondents) now score ahead of applications that deliver business continuity functions – contrasting to previous years when continuity and resilience were prioritized. 

Photo: Dreamstime