Expect 2018 to be the year of acqui-hires in the gov tech market. The are a small number of companies with sizable bankrolls whose primary product offerings are at or near market maturation. There are also a large number of companies that have raised some money, but likely not enough for the capital-intensive gov tech market. Combined, these create a market ripe for small, but strategic acquisitions at discount (below last valuation) prices. My prediction is you will see between five and 10 of these kinds of acquisitions in 2018.
This will be the year that mobile-location data takes center stage in the data-driven-decision-making cycle. To date, companies have tried to take widely available public data (i.e. Census) and add value through fancy visualizations, but to little avail. I’ve written before that this approach was likely to fail given the lack of spatial and temporal fidelity, and that has largely proven true. Mobile-location data, provided by cellular and app companies, provides a new degree of insight into the movement patterns of a place. This data has been available for a couple of years, but until recently, there were serious and rightful concerns about personal privacy. New methods have emerged to maintain the quality of this data without compromising personal privacy. This data is both differentiated and has high value. I expect to see its use increase substantially in 2018.
"Blockchain for government” will overtake “smart cities” as the primary marketing platform for big tech companies in the space. Much like the “smart cities” marketing movement, don’t look too closely behind the curtain, you might be disappointed. The blockchain does have serious potential, particularly in the energy and power sector of government operations, but there is much work to be done. I do expect to see a few startups roll out blockchain-enabled offerings in the space, but by and large, most of the noise will be marketing fluff.
As the concerns about data collection and use have increased over the last year, expect to see more discussion in the space about decentralized identity management. Identity management is the next big platform in tech and all of the work being done around decentralization (related to blockchain) will soon enable user-controlled identity and data management. As the official issuer of identification, government agencies can and should play a large role in this development. It seems unlikely that 2018 will be the year that a solution like this hits the market, but I expect you will start to see more interest and discussion, particularly with state and country governments.
One of the major developments in 2017 was the announcement of several new-age, tech-driven cities. In the U.S., both Alphabet (Sidewalk Labs) and Bill Gates rolled out plans for these kinds of developments. Internationally, this kind of work has been going on for the last couple of years. Expect to see more of these efforts in different shapes and sizes in 2018. It wouldn’t be a total shock if Amazon HQ2 took a similar approach in building their new mini-city/campus. I do think this kind of large-scale development work is likely the only way to truly build a smart city because it provides the opportunity to integrate the parts more effectively than the piecemeal approach many cities are forced to take. No predictions on whether or not these efforts will be successful, but time will tell.
I’m excited to see what 2018 brings, happy New Year!
This story was originally published on Better Planning.