Generative AI, cyber resilience, and digital identities: technological trends that will take center stage in 2024

In 2023, the entrepreneurial landscape once again showcased its resilience and maturity in the face of a dynamic environment fraught with challenges, including issues related to access to financing. In Spain, the survival period for startups has extended to 3.12 years, marking a 1.1-point increase from 2019, as outlined in the ‘Entrepreneurship Map 2023’ by South Summit. The ecosystem’s value has surged to 3.6 times its 2018 benchmark, according to reports by KFund and BBVA Spark. Meanwhile, in Latin America, despite a pronounced initial drop in investment last year, the number of startups receiving backing from venture capital has doubled over the past two and a half years, as per data from the Latin American Private Equity and Venture Capital Association (LAVCA).

Against this backdrop, new opportunities are emerging for entrepreneurs to achieve the goal of “creating companies that generate employment, wealth, and social impact,” as Àurea Rodríguez, technology and innovation expert and author of the book ‘Better Dead than Analog’, points out. Alongside other professionals, Rodríguez selects trends for BBVA Spark that will drive the growth of startups and scale-ups in the coming months.

Generative AI, regulation, and sustainability: the leading trinity

Following the rapid rise of Chat-GPT, generative artificial intelligence (AI) became an omnipresent theme in 2023. Gartner positioned it at the peak of expectations in its ‘Hype Cycle,’ a graphical representation illustrating the maturation and adoption of specific technologies. The launch of GPT-4, the improved version of OpenAI’s chatbot, and the introduction of Gemini, the generative AI model with which Google aims to compete with Open AI and its partner, Microsoft, have marked the recent months.

In 2024, experts expect companies and entrepreneurs to continue to adopt this technology and seize new opportunities that arise. “We can already tangibly see the opportunities it opens up and how new tools can be built with this technology. Internally, companies will improve processes, reduce administrative burdens that currently consume a lot of time, and generate much more agile procedures,” says Pedro Muñoz, head of open innovation at BBVA Spark.

In parallel with the progressive omnipresence of generative AI, the development of ethical frameworks, regulations, and standards also emerges as a cross-cutting theme in entrepreneurship and technology in 2024. “New regulatory frameworks are emerging that will drive innovation and force industries to transform,” predicts Àurea Rodríguez. In the final days of 2023, the European Union reached an agreement on the Artificial Intelligence Act, a pioneering regulation aimed at governing the uses of this technology and minimizing its threats, set to come into effect in 2026. Meanwhile, the U.S. government issued an executive order with the aim of mitigating the risks of AI.

According to the 2023 Artificial Intelligence Index compiled by Stanford University, mentions of this technology in global legislative proceedings until 2022 increased 6.5 times more than in 2016. “The new frameworks being created serve to ensure ethics in the use of AI and that its integration takes place correctly in the solutions developed,” says BBVA Spark’s Pedro Muñoz.

However, the evolution and advancement of technologies not only pose new challenges in terms of regulation but also have an impact on the environment. In the European Union, digital technologies account for between 2 and 4% of greenhouse gas emissions. “Technological advances themselves generate a significant carbon footprint, so sustainability will continue to be a powerful driver for creating solutions that provide a respectful response to the environment,” explains Juan Vicente García-Manjón, professor at the European University Miguel de Cervantes.

In 2023, sustainable or ‘green business’ ventures have ranked in the top 10 most relevant sectors for startups in Spain and are poised to remain significant in the coming months. Sustainability is even making its way into web development through the ‘green software’ trend. This year, the Corporate Sustainability Reporting Directive (CSRD) of the European Union comes into effect to expand and strengthen companies’ sustainability obligations. Consequently, ‘cleantech’ innovation will also play a prominent role this year, as it did in the previous one.

Regenerative finance to promote sustainability

Regenerative finance or ReFi aims to drive and promote a sustainable future for all through the combination of blockchain technology and tokenization. This new concept seeks to transfer the advantages of decentralized finance (DeFi) to social and environmental causes and draws from the development of Web3, a new web model based on decentralization and blockchain designed to reduce human dependence on major technologies and their infrastructure.

According to BBVA Spark’s Pedro Muñoz, this concept is “gaining strength through the issuance of green bonds on blockchain.” These green bonds not only ensure investor profitability but also have the ability to generate social impact. An example of this trend is the tokenization of carbon credits, representing the reduction of one metric ton of CO2.

Advancing digital identity

Photographs, personal data, hobbies, email addresses, or comments on social media are some of the pieces that make up digital identity. Along with the digital footprint, the trace a person leaves online through their actions in the web realm stands as one of the key vertices of the digital experience.

To manage this identity, progress is being made in the creation of models such as self-sovereign identity, which will not only advance towards risk-free digital experiences and decentralized frameworks but also enable entrepreneurs to find new avenues for growth.

“Digital identities will serve to identify each person’s needs, driving the hyper-personalization of products and the known ‘customized’ technology,” explains expert Àurea Rodríguez.

Cyber resilience: improving security in the digital environment

Cybersecurity is a central theme for any organization, especially in an increasingly digitized world. The percentage of firms affected by cyberattacks is estimated to have increased for the fourth consecutive year, rising from 48% to 53%, according to the Hiscox Cyber Readiness Report.

Awareness and initiatives for companies and entrepreneurs to implement strategies in this area continue to grow. As we step into 2024, another concept will gain strength: cyber resilience. “We have increasingly secure systems, but it is necessary for companies and entrepreneurs to consider how they guarantee the continuity of their operations in the face of any cyberattack,” notes Juan Vicente García-Manjón, professor of technology and innovation at the European University Miguel de Cervantes.

‘Phishing’, ‘malware’, and ‘ransomware’ emerge as three of the main threats to organizations in terms of cybersecurity, in addition to AI itself, which cybercriminals can use to refine their attacks and increase misinformation on networks.

This technology also emerges as a strategic ally against cybercrime, thanks to its ability to conduct predictive analysis that can prevent these threats and identify system vulnerabilities. Alongside it, institutional regulations, such as the European Union’s Cyber Resilience Act approved in 2022 to protect companies and consumers using digital products or software, advance in improving cybersecurity in the cyber environment.

From the cloud to space: other trends for 2024

Beyond these trends, the rise of ‘spacetech’ or space technology, with an increasing number of startups innovating in the aerospace industry; cloud-based industrial platforms, which improve the management of solutions developed by companies; and developer-oriented software, which will help enhance the productivity and satisfaction of these workers, will also set trends in 2024, according to Capgemini, Deloitte, and experts consulted by BBVA Spark.

As the artist Laurie Anderson stated, technology is the bonfire around which we tell our stories. In the warmth of these new trends, entrepreneurs will continue to innovate in 2024.