As we enter 2023, it is important for businesses and investors to understand the key investment themes and opportunities that will shape the year ahead. With economic uncertainty and market volatility, it is vital to identify emerging trends and high-potential sectors. This article will provide an overview of some of the top business investment themes for 2023 based on recent industry reports and analyses. Key trends include a focus on sustainability, digital transformation, healthcare innovation, artificial intelligence, and the continued rise of e-commerce. By aligning investment strategies with these macro themes, companies can position themselves for growth despite market headwinds. Careful evaluation of investment prospects within these areas can uncover promising companies to target for investment. With prudent analysis and planning, 2023 can still present worthwhile chances to deploy capital amidst economic challenges.
Sustainability and ESG will remain investment priorities
Sustainability and ESG (environmental, social, and governance) factors have become baseline considerations for investment allocation. According to PwC’s 2023 Global Investor ESG Survey, 79% of institutional investors apply ESG principles to at least a quarter of their portfolios. Drivers include both values alignment and risk management. With extreme weather events becoming more common, investors recognize the financial materiality of climate change. At the same time, diversity, pay equity, and corporate culture are increasingly seen asproxies for sound management. In 2023, we will likely see more capital flowing into renewable energy, electric vehicles, plant-based food, green chemistry, and other sustainability-focused companies.
Digital transformation accelerates across industries
The COVID-19 pandemic forced a rapid shift to digital across industries. While lockdowns have eased, the genie is out of the bottle in terms of digital adoption and innovation. According to IDC, 65% of global GDP will be digitalized by 2022. Areas powering this trend include 5G infrastructure, cloud computing, the Internet of Things, artificial intelligence, big data analytics, quantum computing and more. Incumbents and startups alike are embracing technology to enhance productivity, tap new markets and build resilience. Savvy investors will seek out potential winners in this process of digital transformation and identify those at risk of disruption.
Healthcare innovation responds to demographic shifts
The healthcare sector faces massive demographic challenges with the aging of the global population. Expected growth in chronic diseases will drive healthcare spending over the next decade. According to Deloitte, global healthcare expenditures are projected to increase at an annual rate of 5.4% from 2020-2023. In response, investors will likely target innovations in biopharma, medtech, health IT, genomics and telemedicine. Areashighlighted in KPMG’s 2023 healthcare investment outlook include networked care models, behavioral health, home-based care, data analytics and AI-enabled solutions.
Artificial intelligence investment crosses industries
From ChatGPT to self-driving cars, artificial intelligence (AI) is transforming industries at an incredible pace. Global revenue from AI applications is forecast to grow from $62 billion in 2022 to $204 billion by 2028 per ResearchAndMarkets.com. Top AI investment opportunities include semiconductor companies focused on AI chips, cloud infrastructure providers, AI-driven cybersecurity, process automation,Big Data analytics, machine learning platforms, conversational interfaces and more.
E-commerce and new retail capture consumer wallet share
While e-commerce growth is slowing from peak pandemic levels, online retail continues to take consumer wallet share. U.S. e-commerce sales are projected to grow at 12% per year through 2025 according to eMarketer. Omnichannel capabilities combining online and offline will increasingly become the norm. Investment opportunities range from e-commerce enablers like payments, logistics and digital marketing to direct-to-consumer challenger brands across categories. In emerging markets, rapid smartphone adoption provides a tailwind for e-commerce and digital payments.
These themes offer avenues for investment in 2023 despite broader volatility. However, thorough due diligence is still required to separate winners from speculations. With sound analysis, 2023’s top business investment themes can lead to promising returns.