Businesses endured a rocky ride in 2023 with interest rate spikes and soaring inflation. Despite this, the digital and technology market held up relatively well as long-term structural drivers continued to underpin growth.

Will 2024 bring more of the same? Or is risk appetite diminishing amid wars on multiple fronts, decisive elections and lingering economic uncertainty.

The team at Eton Bridge Partners’ Digital & Technology Practice take a look at what’s likely to dominate the digital leadership agenda this year.

Stable economy could see return of growth-focused hiring

Andrew Demetriou says 2023 was a more challenging year with less investment in growth and increased focus on roles related to core IT infrastructure and efficiencies. But he anticipates 2024 will be a busier market for growth-focused leadership positions as investment returns to customer experience and product development. Chief Product and Chief Digital Officers who were hired in the post-Covid boom may be ready for a new challenge with a company that’s investing in growth; this could create churn and a more buoyant market.

Research firm Gartner forecasts global IT spend to grow a respectable 6.8% this year to around $5tn, that’s more than double last year’s growth rate. But geopolitical and economic uncertainties remain amid conflict in the Middle East and the long-running war in Ukraine. The spectre of commodity price inflation and stubbornly high interest rates cannot be ruled out. Businesses will still want to invest in technology, but decisions will be carefully weighed. Astute leaders will ensure they can mitigate risks and make a sound business case before signing off on big investments.

Private equity is building momentum and taking a strategic approach to tech

John Smith expects continued growth in the private equity (PE) market this year. Deloitte forecasts global PE assets under management will hit US$5.8 trillion by the end of 2025 with dry powder (capital ready to be deployed) standing at record levels. PE players will be keen to put that capital to use. Against this positive backdrop, John expects the private equity market to ebb and flow through the year as macro factors – geopolitical, regulatory and economic – play out.

The use of technology, data and artificial intelligence (AI) to drive efficiencies will be key and we have already seen mid-market PE funds looking to be more strategic in their approach to technology functions. John notes the PE operating partner model is shifting towards more specialised roles focussed on specific areas of finance, operations and tech/digital.

Within PE portfolios, value creation through effective use of technology will remain high on the agenda. From a talent perspective, the need lies in the intersection between technological innovation and the human element. Businesses will, more than ever, be looking for digital leaders with strong commercial and people-management skills alongside the prerequisite tech expertise.

The international picture – strong prospects for the US

Graeme Smith points out that the US continues to offer excellent opportunities for digital leaders. Growth in the US economy has outpaced Europe in recent years with the US economy growing at more than twice the rate of the Euro area last year. The seven biggest tech firms in the world by market cap all hail from the US and the European market remains dominated by the likes of Apple, Amazon, and Microsoft. A looser approach to AI regulation in the US vis-à-vis Europe will help drive innovation and investment.

At Eton Bridge Partners, we have seen strong growth in the US recently, and prospects for digital and technology leadership in the US look bullish again this year. Graeme says San Francisco remains the global tech epicentre but Seattle, Austin, Boston and Denver are also drawing talent as remote and hybrid-working patterns loosen ties to Silicon Valley. Alongside an upbeat US market, we have also seen steady hiring activity across DACH countries and the Netherlands, a region which has kept us consistently busy.

ESG a priority; full and accurate data now business-critical

Josh Emerson comments that ESG remains high on the board’s priorities with pressure from all stakeholders to pursue a viable ESG strategy and back it with data. The need to collect, analyse and report ESG data is mission critical as requirements become more stringent. ESG reporting is increasingly viewed as being on a level pegging with the reporting of financial data.

Ernst & Young’s most recent Corporate Governance Survey found that 74% of business leaders believe their company should, ‘address ESG issues relevant to their business, even if doing so reduces short-term financial performance.’ Business leaders will be seeking ways in which technology can be utilised to meet ESG obligations in the most cost-effective way.

A growing public awareness of technology’s carbon footprint will mean digital leaders need a deep understanding of ecological impact and must be ready to explain, justify and mitigate where necessary. Sustainability will be woven into every business decision with long-term environmental concerns profoundly shaping current investment priorities.

Digital leaders doubling down on GenAI deployment

Rapid advancement in Generative AI (GenAI) capabilities mean businesses will seek leaders who can leverage the opportunities whilst managing emerging risks. The 2024 Gartner CIO and Technology Executive Survey found that while only 9% of global CIOs surveyed have already deployed GenAI technologies, over half say they will deploy GenAI in the next 24 months. The expansion of GenAI will further democratise digital technology outside the IT function. Its spreading reach will also create new frontiers on cybersecurity, regulation and public/employee relations as society navigates the fast-evolving landscape.

The data deluge means digital infrastructure will continue to ramp up to handle increasingly large and complex information. Migration to cloud-based storage will remain a theme with 40% of corporate data still yet to make the jump. Technologies such as digital twin will continue to increase in application whilst machine learning, robotic process automation (RPA) and industry 4.0 will remain central to the drive for efficiencies.

We expect the evolution of digital to continue to be pivotal to every role we hire for as businesses increasingly shift to a digital mindset assuming their output will be consumed in digital form and that their processes must be as digitised as soon as possible.

Digital leaders growing in influence, eyeing broader roles

As tech and corporate strategy intertwine and digital-first becomes embedded in almost every process, tech leaders are at the forefront. Digital leaders are increasingly interacting with the board and exec as technology strategy meshes with corporate aims and the board seeks an expert view.

We expect digital leaders to continue to expand their influence and horizons. Ambitious tech leaders are grasping this – according to Gartner, over 40% of CIOs surveyed hope to expand their scope with additional leadership responsibilities. We also foresee continued demand for digital expertise in non-executive director (NED) roles from businesses seeking to bolster their digital understanding.

We would like to take this opportunity to wish you all peaceful and prosperous 2024.

If you would like to discuss your digital and technology plans for 2024, please get in touch with Jean-Pierre Green, Head of our Digital & Technology Practice, on +44 (0)7551384767 or jean-pierre.green@etonbridgepartners.com.