Boston’s Tech Agenda for 2018: 3 Questions, 3 Sectors to Watch

[Updated 1/11/18, 9:23 am. See below.] Ready or not, 2018 is upon us.

The tech industry grappled with serious and difficult issues last year, from a series of sexual harassment and assault allegations; to fears about the effects of social media and other online platforms on our politics, public discourse, and minds; to more (and bigger) personal data breaches. We won’t solve those challenges in 2018. But I’m an optimistic person, so here’s hoping that this year, the tech world grows more safe, respectful, inclusive, and diverse, and less scary and depressing.

Here in Boston, the top tech headlines of 2017 included acquisitions, big and small, of a crop of mature startups; more activity in self-driving vehicles; $100 million-plus venture capital rounds; new healthcare technology-focused venture funds; and another slow year for IPOs.

A year ago, I laid out several questions and predictions for the Boston tech cluster in 2017. Some of them came true—there was a lot of local deal-making in cybersecurity, not surprisingly. Others missed the mark—none of the IPO candidates I listed went public, for example.

This year, there are plenty of important questions for the Boston-area tech scene. Among them:

—Will Amazon choose Boston for the location of its second headquarters? If it does, what will be the ripple effect on local companies, the war for talent, housing prices, and transportation? (Amazon is seeking to lease up to 1 million square feet of office space in Boston’s Seaport neighborhood, according to reports from the Boston Business Journal and Boston Globe, but sources told the publications that potential expansion is separate from the second headquarters search.) [Seaport deal reports added.—Eds.]

—Will the rise of new early-stage venture funds in Boston be enough to offset the overall decline in early-stage investing? Or, will we see a larger number of local startups die on the vine this year, as venture capitalists continue to pour money into fewer, later-stage companies?

—How will Boston companies respond to the challenges faced by the broader tech industry in 2017?

I don’t have the answers. For now, I’ll highlight three tech sectors I think are worth watching this year in Boston, based on subjective criteria that include macro trends, local buzz, and the technology’s “cool” factor:

1. Blockchain: 2017 was a breakout year for cryptocurrencies. Their underlying technology, blockchain, could grab more of the spotlight in 2018. There’s talk that cryptocurrencies are a bubble set to pop, but even if that happens, advocates don’t believe it will diminish the prospects for blockchain, which many observers say is poised to impact a broad variety of sectors in the coming years.

Will more blockchain applications start to mature in 2018? And will developers make progress in solving the technological challenges, such as the enormous amount of energy these systems require to operate?

The Boston area is starting to make noise in blockchain. Some of the local players to watch include startups such as Circle, Talla, Nebulous, and Commonwealth Crypto; investors such as First Star Ventures, Underscore VC, Pillar, and F-Prime Capital Partners; and large enterprises such as Fidelity. Expect more blockchain companies to emerge in Boston; the question is whether the city will establish itself as a leader in this sector.

2. Driverless cars: This is an emerging industry in which Boston has already cemented itself as a hub. Last year, NuTonomy and Lyft launched a pilot program that lets the public ride in self-driving vehicles in a Boston neighborhood; Aptiv (formerly Delphi Automotive) established a technology office here after acquiring NuTonomy for at least $400 million; and Optimus Ride revealed plans for a self-driving vehicle transportation program at a real estate development project in South Weymouth, MA. All of that means the local autonomous vehicle sector has momentum going into 2018.

As the global race to deliver autonomous vehicles revs up, keep an eye out for more industry partnerships and consolidation. Who will figure out how to make money in this field?

3. 3D printing: It feels like the 3D printing shakeout of the past decade is winding down, and some of the startups that remain are building real companies selling printers to businesses (not consumers). Investors continue to place big bets on 3D printing, but the breathless hype of several years ago has subsided.

At least, that’s the narrative playing out in Boston. Last year, the local 3D printing scene saw consolidation (NVBots was acquired by an Ohio-based industrial 3D printing company); business expansion (Markforged said fast-growing revenues helped it turn a profit, while Formlabs introduced new products); and large venture capital investments (Desktop Metal led the way with a $115 million Series D round).

How will the role of 3D printing in the broader manufacturing industry evolve in the coming year, and what will the technology’s impact be on bigger trends like automation?

Jeff Engel is a senior editor at Xconomy. Email: jengel@xconomy.com Follow @JeffEngelXcon

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