What a year it’s been for the tech sector in 2021.
The year in tech 2021
Over the past year, routine space tourism emerged from science fiction to reality, digital art you can’t even touch auctioned for millions at Christie’s, and malicious attacks emanating from cyberspace crippled real-world critical infrastructure in the U.S.
The technology industry unceasingly shaped the way Americans lived in 2021, embedding its brands and tools into intimate parts of daily life as the ongoing pandemic further normalized virtual work, school and socializing.
The promises of tech’s ability to make our lives easier and more efficient continued to drive U.S. economic growth in the shadow of the relentless health crisis, but also exposed new pitfalls as more Americans lived their lives in a digital world where misinformation on everything from elections to vaccines thrives. This manifested off-the-screen in ominous ways during 2021, including an unprecedented post-election riot at the U.S. Capitol on Jan. 6 and an “anti-vax” movement that has prolonged the suffering wrought by the COVID-19 pandemic.
The gatekeepers of Big Tech saw their net worth surge over the past year, but also endured a year of major shakeups: from Jeff Bezos stepping down as Amazon CEO, to a scandal-plagued Facebook rebranding as Meta, to Jack Dorsey resigning from Twitter. The mounting power of tech giants also came under renewed scrutiny — albeit accompanied by little action — from lawmakers on both sides of the aisle.
Despite the wild 12 months where Americans watched, seemingly in real time, as technology transformed society in good and bad ways, experts are holding onto hope that the lessons we’ve learned in 2021 can inform us going forward.
“I’m trying desperately to be optimistic,” Karen Kornbluh, the director of the Digital Innovation and Democracy Initiative at the German Marshall Fund, and a former U.S. ambassador to the Organization for Economic Cooperation and Development during the Obama administration, told ABC News of the tech industry’s past year. “This has been a learning year. We didn’t need another learning year — but I do think a lot of people learned a lot about how this all works and how entrenched it is and how dangerous it is.”
Still, Kornbluh argues that the tech sector is “so innovative and creative and allows people to do so many things we never could have imagined before.”
“We can’t lose our sense of wonder about it all, and because there are these new opportunities, I do think the industry is going to try to put a lot of these problems behind it before we move into this new era,” she said.
Here is a look at the year in tech, lessons the industry has learned and what to expect looking forward into 2022.
While it used to take the backing of entire nations to launch humans into space, that has all changed in the past year as the new billionaire-backed corporate space race officially blasted off to new heights.
A record-high 13 human spaceflights were launched in 2021, more than triple the number launched in 2020. Eight of them were launched with the backing of private industry and one more carried a Japanese millionaire tourist as a passenger.
Key players in the emerging space tourism sector — including Elon Musk’s SpaceX, Jeff Bezos’ Blue Origin, and Richard Branson’s Virgin Galactic — all flexed their muscles over the past year in a series of launches that sought to prove humanity’s new capability of routine spaceflight.
The industry took heat from some as simply a new playground for the ultra-wealthy, as pandemic-battered Americans watched billionaires including Bezos and Branson blast off on back-to-back joyrides to the edge of space this past summer and initial seats sold for up to $28 million. While economic inequality and environmental concerns compounded animosity towards this new arena, experts have argued that private sector involvement in the new space race has saved money for NASA and driven new innovations that can improve everyday life back on Earth.
For “Star Trek” actor William Shatner, who became the oldest person to go to space this past October at the age of 90 on a Blue Origin flight, the new technology that allows humans to take a quick trip to the edge of space instilled a deep sense of awe.
“What you have given me is the most profound experience. I am so filled with emotion,” the actor, who spent his career pretending to cruise the cosmos, told Bezos immediately upon landing. “I hope that I can maintain what I feel now. I don’t want to lose it. I am overwhelmed.”
“Everybody in the world needs to do this,” Shatner added.
Over the course of 2021, non-fungible tokens (NFTs) went from an obscure buzzword among blockchain insiders to an inescapable craze that even headlined the Macy’s Thanksgiving Day parade.
NFTs, or one-of-a-kind digital artifacts that use blockchain technology (the same digital ledger system that supports cryptocurrency) to prove ownership and individuality, exploded in popularity over the past year in a craze that has left some scratching their heads.
In February, Twitter founder Jack Dorsey sold the first-ever tweet (a 2006 social media post that reads “just setting up my twttr”) as an NFT for some $2.9 million. In April, a collage made by digital artist Mike Winklemann (also known as Beeple) fetched a whopping $69 million when it was auctioned by Christie’s.
The sum at which Beeple’s art sold especially raised eyebrows for some. The artist has been known to upload his digital artwork for free on Instagram and his website, leading many to question what is driving the value of him now selling it in the form of an NFT. More perplexing for some, viral memes and gifs that were once sources of free and seemingly useless entertainment online are also fetching huge sums of cash when sold as NFTs. The so-called “nyan cat” meme, a digital image of a pixelated feline flying on a rainbow, racked in nearly $600,000 when it was sold as an NFT in February.
It’s estimated that total NFT sales are expected to generate a staggering $17.7 billion in 2021 alone, according to research compiled by crypto industry outlet Cointelegraph.
Despite some skeptics calling the craze a bubble, many experts don’t see demand for NFTs dwindling anytime soon — especially as the world increasingly shifts online and with the mainstream launch of the metaverse.
“They’re here to stay,” Christian Catalini, the founder of the Massachusetts Institute of Technology’s Cryptoeconomics Lab, told ABC News of NFTs. “Because they do represent a fundamentally novel way to design all sorts of interactions.”
“I think we’re still in a very embryonic phase and I would assume as the space matures, that’s when actually these things will become more useful,” Catalini added.
“Often with technology, we tend to overestimate how quickly it can change our lives in the short term, or we also tend to underestimate how much it will change them in the long term,” Catalini said. “With all of these technologies, there’s a lot of potential in the long run, and there’s a lot of things that need to be figured out in the immediate term — and I think that’s all happening live, right now.”
The widespread adoption of new technology also led to new threats emerging from the cyber world. A spate of high-profile cyberattacks, many involving ransomware, revealed new potential dangers for businesses and even critical infrastructure as attackers seemingly grew more brazen with their targets in 2021.
A cybersecurity attack in May on Colonial Pipeline, operators of one of the largest fuel conduits in the U.S., led to a multi-day shutdown of the pipeline that provides nearly half of all fuel used on the East Coast — by hospitals, schools, and much more. The company ended up paying the hackers some $4.4 million in cryptocurrency, some of which the Department of Justice eventually seized back. Just weeks later, the world’s largest meat processor, JBS, revealed it was also hit by a cyberattack involving ransomware.
Experts say use of this malicious technology surged over the past year due to a confluence of factors, including the rise of harder-to-trace cryptocurrency and a work-from-home boom that has resulted in novel IT vulnerabilities for many firms.
“Ransomware attacks are becoming more prevalent, and especially with more enterprises in a semi-remote environment,” tech industry analyst Dan Ives, managing director of equity research at Wedbush Securities, told ABC News, “and the ransomware attacks, we expect they could be up another 50%, going into 2022.”
“That’s really going to catalyze more spending for cybersecurity,” he added. “We think cybersecurity spend is going to skyrocket over the next year given the amount of threats facing enterprises, as well as governments, around the world.”
Also over the course of 2021, it became undeniable that the auto industry as a whole was reaching an inflection point and shifting away from the gasoline-burning combustion engines that have been used for generations and toward electrification.
Nearly every major car producer — from General Motors to Ford to Toyota — announced massive new investments into electrification of vehicles over the past year, and the Biden administration unveiled the goal of half of all new car sales in the U.S. to be electric vehicles by 2030.
“It’s really a green tidal wave that’s taken hold in terms of more consumers wanting to purchase electric vehicles,” Ives told ABC News. “Today, only 3% of automobiles in the world of EVs. We think that that goes to 6% by 2022 and 10% by 2025, and this green tidal wave we view as a $5 trillion market over the next decade.”
“You’re also seeing a blurring of lines between technology and autos” Ives said. “I think that’s going to be a big theme as companies like Apple, Google, and Amazon focus more and more on electric vehicles.”
In the wake of multiple scandals plaguing his beleaguered tech giant, CEO Mark Zuckerberg announced this year that he was changing the company’s name from “Facebook” to “Meta” to reflect a shifting focus on the metaverse.
The three-dimensional digital world created by augmented and virtual reality products and services, will be “the successor to the mobile internet,” Zuckerberg said during his keynote at Facebook’s Connect conference in late October. The chief executive’s vision for the metaverse will be a place where people meet, socialize, work and shop — all via a digital avatar of themselves and VR hardware.
2021 marked the year the metaverse took “center stage of growth, as more investors realize this is not just about the gaming sector,” Ives told ABC News.
“It’s going to take time for the metaverse to ultimately form, to unleash the potential that many see for it today,” he added, but said ultimately, “the metaverse is going to be a trillion-dollar market over the next decade.”
It’s not just Facebook-turned-Meta that has its eyes on the new digital horizon either, Ives added, saying, “We believe Apple, Microsoft, Google and Facebook combined could spend $10 billion on the metaverse over the next two years.”
Public trust in tech giants to build a new digital world safely has dwindled over the past year, as whistleblower Frances Haugen accused Facebook of “choosing to prioritize its profits over people” in her opening statement while testifying before lawmakers in October. Haugen alleged blatant disregard from company executives for potential harms their services can cause to democracy and the well-being of young people.
Kornbluh, who has spent the past year working with policymakers and beyond on potential reforms for an industry that has been largely left unregulated, also testified alongside Haugen in front of a House panel at a separate hearing earlier this month.
“It’s been a year when sort of the collective ‘we,’ like the policymakers in general, came to a better understanding of the problem and solution set,” she told ABC News of the renewed focus out of Washington on Big Tech. Still, with partisan politics and a midterm election year, she said she’s skeptical we will end up seeing any actual law changes in the near-term.
“I think Congress has made a lot of progress in thinking about it, but I think it’s hard to imagine that they’ll come to some agreement in an election year,” she said of any new legislation.
Ives echoed her sentiments, saying that despite the new focus, investors don’t see law changes coming on the immediate horizon.
“It feels like there’s been a tipping point from a regulatory perspective, both in Brussels as well as the Beltway, focused on the antitrust, monopolistic nature of these businesses,” Ives told ABC News. “The lack of consensus within the Beltway continues to be the dividing issue to get law changes.”
Despite the apparent impasse, Kornbluh says with Facebook and tech giants “moving onto the metaverse, do they want to keep having all these same discussions about social media?”
“I think the platforms may want to move on, and realize it’s not going to fix itself,” she said, suggesting companies themselves have signaled they are more open to reforms related to internet regulation.
Despite the volatile past year, Kornbluh said she remains optimistic about the future of tech, and especially the metaverse.
“It’s going to open up all kinds of creativity and innovation and hopefully, because there are these new opportunities for new industry and new businesses, that that will clear up a lot of this underbrush that we learned about before we get there,” she said. “Hopefully this was like a run, and we’ll figure out what to do differently before we move on.”
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What a year it’s been for the tech sector in 2021.