When it comes to investing in innovation, certain industries have outperformed others. Those who haven’t now face a do or die situation to keep up with the demands of a modern society, the ever prominent concerns about the climate crisis, inflationary concerns and an aging population.
Looking at the global statistics that Tracxn collected from 2013 to 2023 from more than 230 industries, it is clear which sectors – education, hospitality, agriculture, industrial manufacturing, real estate and construction, and commercial aviation – have fallen behind, received less funding and less successful start-ups are founded. Whether related to high costs, difficulties in obtaining financing due to risky innovation and uncertain ROI, or other financing issues, these industries will require more attention in the future.
As our colleague Arno Nijhof, who leads the company’s innovation arm TNW Programs, explained, the move towards more circular and transparent sustainability practices, plus recent supply and demand issues, have put pressure on many of these sectors to implement new solutions now:
Business innovation is increasingly focused on delivering a positive impact to the world, with many looking for new solutions to decarbonise while building a more resilient supply chain. TNW Programs collaborates with many parties, corporates and companies to identify these opportunities by scouting and analyzing new technologies, startups and markets. The world is calling for change and for new technological developments that will create the solutions we need to achieve those goals.
Discover the future of technology!
Visit us at TNW Conference 15 & 16 June in Amsterdam
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, as has the way we work, interact and communicate with each other. However, education has failed to adapt and adapt to the behaviors, tendencies of people and society at large, with very few long-term technological disruptions over the past decade. Although for example 90% of students say they prefer to learn online rather than through traditional methods, the education sector only accounts for 21% of the global learning management systems (LMS) market.
There is more demand for cloud-based platforms capable of attracting remote students worldwide. Similarly, there is more understanding that a one-size-fits-all approach doesn’t work when it comes to education, but there are so many more educators, parents, and policy makers that need to understand to better tailor methods to different types of education. pupils. Digital tools and advanced analytics are needed to assess and track learning progress, so educators have a constant understanding of which methods are working and where there is room for improvement.
Many companies are also starting to look at using VR/AR to enhance learning. Startups like those based in Belgium Altheria Provide VR training experiences that companies can use and tailor to their specific needs.
When it comes to edtech, according to Tracxn, there are about 36,600 startups providing technology solutions to businesses and consumers in the education sector. Of those, only 5,500 companies have been funded in the past 10 years, receiving $31.9 billion in 5,850 funding rounds. More is needed for these businesses to thrive and provide the modern solutions our schools and educational institutions need.
The hospitality industry has faced a number of challenges in recent years, from the sudden loss of business during the pandemic to a shortage of staff to meet the ever-increasing demand. At the same time, hotels and vacation rentals are feeling pressure to improve their sustainability practices as travelers’ preference for eco-friendly accommodation grows.
Few hotels and vacation rentals are currently using digital tools to their advantage, for example using AI to automate the sharing of information and responses with customers before and during their stay, or installing a smart in-room setup that connects customers’ mobile devices can enhance the customer experience.
Collecting and analyzing data across all touch points throughout the customer journey can help owners build a more detailed customer profile. Using a cloud-based property management system (PMS), such as in Germany Apaleowill help automate processes and allow staff to focus on the personalized, high-touch aspects of the customer journey.
With only 3,420 startups and only one unicorn launched in the past 10 years, the hospitality industry is in need of a revamp. There is so much missed opportunity and need for a complete digital transformation, both on the customer experience and owner side.
As the world’s population continues to grow, feeding everyone in a sustainable, affordable way is more challenging than ever. The world population and the demand for food will increase by 70% by 2050which will continue to put pressure on agriculture and food production.
The biggest challenge we now face is how to scale up global food production in a way that reaches the entire population, without causing irreparable damage to the planet. Sadly, 2,410 of the 20,600 startups that have provided technical solutions to the agri-food industry in the past 10 years have gone bankrupt.
However, 5,560 agritech startups have received $52.4 billion in funding and 22 unicorns have been created. Investments come from many sources: “Applied Sciences, for example, works with Rabobank to find innovative solutions that help its customers in the agricultural sector to become low-carbon,” says Nijhof.
A startup that has created an interesting product that is already available to the general public is Beewise. Based in the Netherlands, the 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 an app.
Now more than ever, the manufacturing industry needs to transform to increase operational efficiency, scale smart factory initiatives, improve supply chain resilience and improve sustainability with innovative new materials and processes. Within the next year, 62% of manufacturers plans to focus on robotics and automation, which are likely to meet some of these needs.
Startups like Mecuris pushing the boat out by reinventing traditional techniques into digital tools that are intuitive and easy to operate for users in the design of orthopedic and prosthetic products.
When it comes to developing and working with more sustainable materials, the industry can reduce its reliance on finite materials and energy. In addition, there is greater potential for modern materials to enable manufacturers to create products with longer lifespans, further improving efficiency and reducing the need for frequent upgrades and replacements. Finally, adopting a more circular economy enables materials and products to be repurposed, lowering production costs and reducing greenhouse gas emissions.
While manufacturing has made some progress, there is still much more potential for the industry to grow and develop. The industry has seen only 970 funded companies and only 36 Series C+ companies. Nevertheless, there are many development opportunities and 61% of manufacturers are already planning to partner with specialist technology companies to drive their growth strategy in the coming year.
Real Estate and Construction
As with industrial manufacturing, stakeholders in real estate and construction expect more sustainable solutions to be implemented.
However, making the industry truly sustainable requires more transparency, with standardized grades in different countries, as well as accurate traceability of maintenance, analysis and reporting.
The entire market, the sales process and construction and renovation must evolve, innovate and increase digital maturity so that professionals can work more efficiently. 41% of real estate companies admit that keeping up with the technology is their biggest challenge while 30% worry about competition from emerging virtual companies.
Using the tools of startups like Eagleviewthat enables greater accuracy and access to proprietary data through the use of autonomous drones is a good start.
Over the past 10 years, the industry has had 5,410 startups receive $68.8 billion in funding. A significant increase in digital innovation will ultimately be needed to make the industry more efficient and reduce both financial and environmental risks and costs.
Air and airport congestion remains a challenge, but smart technology can help alleviate this and enable more user-friendly flight and baggage tracking. Similarly, things like ML and AI have the potential to improve efficiency within the aircraft, debug faster, and help maintain component and infrastructure health. And like most other industries, innovation is needed to improve aviation environmental standards, for example by improving fuel efficiency, in the face of climate change.
After receiving the lowest amount of funding since 2013, and $490 million in aerospace IT and $2.9 billion in aerospace tech, the industry has seen just 1,380 startups develop. There are many opportunities, especially for companies that provide software solutions to the aviation industry and technology-based solutions to aircraft manufacturers to transform and improve the industry.
Startups like the UK’s hiiroc have already developed an efficient method to produce hydrogen without CO2 emissions by using thermal plasma electrolysis technology, which reduces both costs and emissions for commercial airlines.
As each of these sectors continues to evolve, more investment and innovation will be needed to boost them. Get in touch with our team here for more insights, strategies and tips on how to drive innovation within your organization.