When it comes to investing in innovation, certain industries have thrived over others. Those who have not now face a situation where everything and everyone is at stake to keep up with the demands of a modern society, increasing concerns about the climate crisis, inflationary problems and an aging population.
Looking at global statistics collected by Tracxn between 2013 and 2023 from more than 230 sectors, it becomes clear which industries – education, hospitality, agriculture, industrial manufacturing, real estate and construction, and commercial airlines – have lagged behind, receiving less funding have been founded and less successful startups. Whether it’s high costs, difficulties in getting funding due to risky innovation and uncertain ROI, or other funding issues, these industries need more focus going forward.
As explained by our colleague Arno Nijhof, who leads the company’s innovation arm, TNW Programs, the move towards more circular and transparent sustainability practices, as well as recent supply and demand issues, have increased the pressure on many of these industries to adopt new solutions now:
Corporate innovation is increasingly focused on making a positive impact on the world, and many are looking for new solutions to decarbonize while building a more resilient supply chain. TNW Programs works with many parties, companies and corporations to identify these opportunities by exploring and analyzing emerging technologies, startups and markets. The world demands change and its new technological developments that create the solutions we need to achieve these goals.
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Here’s a closer look at the industries in question, along with some of the startups challenging the status quo.
In recent years, our lifestyle has changed significantly and with it the way we work, interact and communicate with each other. However, education has failed to adapt and align with people’s behaviour, tendencies and society as a whole, with very few long-lasting technological disruptions over the past decade. For example, although 90% of students say they prefer learning online to traditional methods, the education sector accounts for only 21% of the global learning management system (LMS) market.
Cloud-based platforms capable of accommodating remote students worldwide are in greater demand. Likewise, there is a growing understanding that one-size-fits-all approach to education does not work, but there is so much more that educators, parents and policymakers need to understand in order to better tailor methods to different types of educational learners. Digital tools and advanced analytics are required to assess and track learning progress, giving educators continuous insight into which methods are performing well and where there is room for improvement.
Many companies are also beginning to use VR/AR to enhance the learning process. Startups like Belgium-based Altheria offer VR training experiences that companies can leverage and tailor to their specific needs.
When it comes to edtech, according to Tracxn, there are around 36,600 startups offering technology solutions to businesses and consumers in the education industry. Of these, only 5,500 companies have been funded over the past 10 years, raising $31.9 billion in 5,850 funding rounds. It takes more for these companies to thrive and deliver the modern solutions our schools and educational institutions need.
The hospitality industry has faced a range of challenges in recent years, from sudden drops in sales during the pandemic to staff shortages to meet rising demand. At the same time, hotels and vacation rentals are feeling the pressure to improve their sustainability practices as travelers have more preferences for eco-friendly accommodations.
Few hotels and vacation rentals are currently using digital tools to their advantage, e.g. B. Using AI to automate the exchange of information and responses with customers before and during their stay, or installing a smart room setup that connects to customers’ mobile devices can greatly improve the customer experience.
Collecting and analyzing data at all touchpoints throughout the customer journey can help owners create a more detailed customer profile. Leveraging a cloud-based property management system (PMS) like Germany-based company Apaleo will help automate processes and allow employees to focus on the personalized, highly interesting aspects of the customer journey.
With just 3,420 startups and just one unicorn launched in the last 10 years, the hospitality industry needs a refresh. There are so many missed opportunities and the need for complete digital transformation, both on the customer experience side and the owner side.
As the world population continues to grow, it is more difficult than ever to feed everyone in a sustainable and affordable way. World population and demand for food will increase by 70% by 2050, which will continue to weigh on agriculture and food production.
The greatest challenge we face now is to increase global food production so that it reaches the entire population without causing irreparable damage to the planet. Of the 20,600 startups that have provided tech solutions to the agri-food industry over the past 10 years, 2,410 have unfortunately closed.
However, 5,560 agritech startups have received $52.4 billion in funding and 22 unicorns have been created. Investments come from many sources: “For example, TNW is working with Rabobank to find innovative solutions that help its customers in the agricultural sector to reduce CO2 emissions,” says Nijhof.
One startup that has developed an interesting product that is already available to the general public is Beewise. The Netherlands-based startup uses modern technology to monitor beehives and support healthy pollination and efficient honey harvesting. Everyone can order their own smart Beehome and easily track the progress via the app.
Now more than ever, the manufacturing industry needs to change to increase operational efficiencies, scale smart factory initiatives, improve supply chain resilience, and improve sustainability with innovative new materials and processes. Within the next year, 62% of manufacturers plan to focus on robotics and automation, which will likely begin to address some of these needs.
Startups like Mecuris are breaking new ground by transforming traditional techniques into digital tools that are intuitive and easy to use when designing orthopedic and prosthetic products.
When it comes to developing and working with more sustainable materials, industry can reduce its dependence on finite materials and energy. In addition, there is greater potential for advanced materials that allow manufacturers to create products with longer lifespans, further improve efficiency, and reduce the need for frequent upgrades and replacements. Finally, adopting a more circular economy allows for the reuse of materials and products, lowering production costs and reducing greenhouse gas emissions.
Although manufacturing has made some advances, there is still much more room for growth and development for the industry. The industry has only seen 970 funded companies and only 36 Series C+ companies. Still, there are many development opportunities, and 61% of manufacturers are already planning to partner with specialist technology companies to drive their growth strategy over the next year.
real estate and construction
Similar to industrial manufacturing, players in real estate and construction expect more sustainable solutions to be implemented.
However, to make the industry truly sustainable requires more transparency, with standardized classes in different countries, as well as accurate traceability of maintenance, analysis and reporting.
The entire market, the sales process, as well as construction and renovation, must evolve, innovate and increase its digital maturity so that professionals can work more efficiently. 41% of real estate companies admit that keeping up with technology is their biggest challenge, while 30% are concerned about competition from emerging virtual businesses.
Leveraging the tools provided by startups like EagleView, which enable greater accuracy and access to real estate data through the use of autonomous drones, is a good place to start.
Over the past 10 years, the industry has received 5,410 startups that have received $68.8 billion in funding. A significant increase in digital innovation will ultimately be required for the industry to become more efficient and reduce both monetary and environmental risks and costs.
Flight and airport congestion continues to pose a challenge, but smart technology could help ease it and enable more user-friendly flight and baggage tracking. Likewise, things like ML and AI have the potential to improve efficiency within the aircraft, detect faults more quickly, and help keep its components and infrastructure healthy. And as in most other industries, innovation is needed to improve aviation’s environmental standards in the face of climate change, for example to improve fuel efficiency.
After the industry received its lowest funding since 2013, with $490 million in aerospace IT and $2.9 billion in aerospace engineering, the industry has only developed 1,380 startups. There are many opportunities, especially for companies that provide software solutions for the aviation industry and technology-based solutions for aircraft manufacturers, to transform and improve the industry.
Start-ups like UK company Hiiroc have already developed an efficient way to produce zero-CO2 emission hydrogen using thermal plasma electrolysis technology, reducing both costs and emissions for commercial airlines.
As each of these industries evolves, more investment and innovation is needed to give them a boost. Contact our team here for more insights, strategies and tips on driving innovation in your business.
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