I’ve been recovering from a particularly nasty flu (not Covid, tested very thoroughly and frequently), so at 4th of January, I am somewhat late with making a forward-looking predictions post for 2023. But given it’s quite fun to come back and see how wrong I was, here are my predictions for 2023, focused around tech and the economy.
Also, note, this is NOT financial advice, just my predictions in tea-leaves for a bit of fun. I have tried to make the statements falsifiable, with a clear timeline. Here goes:
The Economy
Equity markets are bouncing along the bottom at the beginning of Jan 2023
I believe US markets in particular are done falling, give or take a little. The NASDAQ index will not fall below its 2020 pre-pandemic peak. If the S&P 500 has not already bottomed, it will not fall more than 10% from its January 1st level.
Inflation peaked in summer 2022
Global inflation peaked this past summer. US inflation will fall to around 3% or below by the end of Q3 2023. Underlying drivers of inflation, such as energy-, transport- and raw material prices are showing clear deflationary tendencies, so we’ll get there. It just takes some quarters to filter down into the general economy.
Tech lay-offs peaked in Q4 2022
We’ll see continued lay-offs during Q1 and Q2 of 2023, but the bulk of them are behind us. Use layoffs.fyi to judge me at the end of the year.
US will have a soft-landing, EU a mild recession
The US is probably in a recession right now, but it will end by end of Q1 2023. EU is also in a recession, but it will end sometime during Q3 2023.
H1 of 2023 will feel grim. H2 2023 will see greenshots
As the reality of the grim end to 2022 sets in, people will feel negative at the beginning of the year. By the second half of 2023, we will again see clear signs of resumed economic growth.
Tech
Crypto/blockchain will die out with a whimper, not a bang
Lack of few actual use-cases outside of speculation, Ponzi’s and securities fraud, will see the crypto/blockchain industry slowly disappear into fringe curiosity during 2023. 15 years without finding product-market-fit is a long time, and investors will tire of throwing good money after bad. Some very niche use-cases will survive and thrive in their own little corners, but widespread domination of industries will not happen. BitCoin will continue to exist because once a cult has reached a critical mass, they rarely entirely disappear.
Microsoft Bing will make a dent into Googles search domination
Microsoft has an interest in OpenAI (makers of ChatGPT). This will allow them to make a meaningful dent into Googles search domination. Google has ceded the quality of their search in exchange for becoming a pay-for-position ad billboard, so their lost marketshare will be as much their own doing as Microsofts. Microsoft, on the other hand, doesn’t need to monetize search to the same degree, so are free to improve search quality.
Days of going to the Big 3 (AWS, Azure, GCP) when adopting the Cloud are done
“Nobody ever got fired for buying AWS, Azure or GCP”.
But maybe they should. The Big 3 Cloud Providers are taking advantage of being customer’s default choices when going to the cloud. I think we’ll see a challenging economic climate change this, where users of cloud providers start looking at what they are getting, realizing they are being ripped off, and moving to other challenger providers that give more value for money.
Streaming services will pull back on production spending
The last 5 years have seen a veritable bonanza of high production-value TV-shows. We have lived through the golden age of TV. But the economic realities of spending big to gain subscribers in a saturated market will set in, and the big streaming providers will cut spending on new shows.
In summary, the turn of the year sees us at peak bearishness and negativity. The only way from here is up. That’s my main 2023 prediction.
Do you have any predictions to share?