Killers of innovation

The technology industry will not produce any new ‘killer applications' in the near future, while the deployment of existing technologies will be more important to the wider economy than the development of new ones.

That is the assessment of US investment bank Merrill Lynch, in its study of the prospects for 2002. The report backs up earlier Gartner Group research, which terms 2002 a ‘gap year' during which most users will focus on integration rather than installing new technologies.

The studies raise questions about the technology industry's continuing emphasis on innovation. The biggest challenge facing the sector is arguably one of sales and marketing, rather than research and development, in the analysts' view.

Many technologies have been around for many years but remain largely unused, says Merrill, such as cable modems, gigabit ethernet, dense wave division multiplexing (DWDM), networked storage and security storage. (To that list could be added digital subscriber line (DSL), interactive television, general packet radio services (GPRS), and so on…) Vendors should concentrate on raising the penetration of those technologies, rather than dreaming up new ones, Merrill suggests.

Elsewhere, Merrill's predictions are more, well, predictable. Its ‘hot' technologies of the year are virtual private networks, wireless local area networks and voice-over-IP, with nanotechnology tipped to be the ‘darling' of the venture-capital (VC) community. It expects more flotations and mergers and acquisitions in 2002. But VC investments could fall by a further 50% from 2001, and it believes that tech stocks will underperform the market again.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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