Forrester predicts that in the next year 80% of companies will pivot innovation efforts from creativity to resilience and efficiency across a range of technology domains including cloud, artificial intelligence, and data management.

The market research firm’s Christopher Gilchrist said enterprises cut back on creative innovation efforts last year due to rising costs and economic unease, and this year should be seen as “a time to double down on strengthening the durability of your core business and just start all around building differentiation.”

Forrester expects that the economy will specifically shift 10% of automation budgets from transformation to resilience, despite “significant proven benefits of automation over the past several years.”

With economic uncertainty increasingly certain, the firm’s 2023 predictions indicate enterprises will be unable to reach consensus on transformative projects, and as a result settle on known issues and risks.

For example, Forrester’s Infrastructure Cloud Survey for 2022 revealed that containerized applications now account for half of applications being used in cloud decision-makers’ organizations, and Kubernetes (K8s) is orchestrating them at scale.

That said, the firm said virtual machine (VM)-centered workloads should now be regarded as legacy," and anticipates 40% of organizations will take a cloud-native-first strategy this year. Many are expected to also increase investment in K8s as a distributed compute backbone for current applications and new workloads that can be run more efficiently in K8s’ environments.

These workloads will extend to technologies including AI/machine learning (ML), data management, IoT, 5G, edge computing, and blockchain.

In Forrester’s 2023 predictions presentation, Gilchrist noted innovation will continue to be a critical aspect to organizational resilience, irrespective of organizational or technological maturity. But resilience is “more nuanced than we think,” he added, and for the most success in 2023 "it's not about taking a defensive posture."

As innovation strategy changes course, bringing “moonshots projects back down to earth,” the best decision makers will be using a pragmatic approach to incrementally improve resilience through innovation programs rather than killing them altogether.

According to the firm’s research on the 2008 financial crisis, organizations that prove successful during times of economic adversity focus innovation on expanding existing markets rather than targeting extending to new markets by using innovation to expand growth in their core businesses.

Forrester expects more focus to be on “modernizing the business” to enhance customer and employee experience across core operations.

“It starts with making sure that you understand innovation is a long-term investment, not a near-term cost,” Gilchrist said. “Pragmatically invest in innovation that expands the growth of the core business, and then prudently target that growth opportunity to capture value with core customer segments.”

Forrester’s "2022 Consumer Energy Index And Retail Pulse Survey" found the majority of online adults in the United States (64%), the United Kingdom (59%), and France (55%) were anxious about the possibility of a recession. Despite this economic gloom, the firm anticipates spending to increase by 5%.

“The economic preamble to this downturn is unique. Consumers have banked significant savings during the pandemic – as much as three- to six-times compared to prerecessionary periods going back to the 1960s,” the firm explained.

Forrester expects household cash flow to reverse its declining trend and rise by at least 6% by the second half of 2023, and while consumers will "still signal caution, money in the bank will spur them on to greater spending."

Echoing that optimism, Forrester CEO George Colony said he still hasn’t given up hope on the possibility we dodge a recession in 2023.

“Most of the predictions have been wrong about the rate of the economy,” Colony said in the predictions presentation. “I was actually in Europe last week, and most companies say their business is pretty good, the lights are not going off here in Europe and we're solving our energy problems here.”