Business Investment Trends 2025: How AI, Data and Supply Chains Shape Productivity and Growth

Investing money helps determine how much output a business can produce, how fast an economy can grow, and how competitively a business can operate over time. The results of numerous studies recently conducted on the digital space and across different industries demonstrate an upward trend in businesses allocating capital towards the year 2025.

This report identifies the five key types of investment capital being made by most organisations across all industries in their continuing investments into productivity, efficiency, and risk management improvements.

Artificial Intelligence - AI

The principal motivation for investment into Artificial Intelligence (AI) is the accelerated gains achieved through increases in production productivity, and attributable cost savings that may be achieved by using automation processes.

Leading implementations of AI technology in business:

• generative AI technologies (chatbots and automated engines)
• AI-based decision support systems
• cybersecurity technologies (deepfake and automatic fraud detection)

The economic benefits of AI are that it will enhance the levels at which the economy can produce goods and services by increasing the limitations of the production possibilities frontier (PPF). There are many businesses that are either currently utilising AI technologies or planning to implement them, and most agree that AI will play an important role in their future growth.

The impact of AI on the job market will likely decrease the need for performing routine tasks, thereby creating a need for more highly skilled digital workers in the near future, leading to potential skill mismatch challenges in the job market.

IT Infrastructure and Cybersecurity

The recent increase in companies' investment in cybersecurity and IT infrastructure reflects a desire to reduce risk, specifically the anticipated cost of potential cyberattacks. A study conducted by PwC shows that 78% of all surveyed companies have plans to increase investment in this area and view the growing financial risks associated with digital vulnerabilities as an indication of the growing importance of these threats.

As firms expand their digital operations, many are also looking for local IT assistance, often searching for “IT support near me” to ensure immediate technical help and system maintenance.

To assess the economic implications of these investments, firms are comparing the marginal cost of an attack against the marginal gain from providing protective measures. As a result, cybersecurity serves as a method of managing risk, seeking to mitigate uncertainty and protect productive assets.

There are also complementary investments in cloud computing and server technology, as well as in high-performance hardware, which work to further support each firm's ability to adopt Artificial Intelligence (AI). These investments into additional cloud computing infrastructure, server technology, and high-performance hardware are considered capital deepening investments, as they permit each business to continue to increase the quality and quantity of capital goods the business utilizes on a per employee basis, thereby increasing each firm's long-run productivity.

Analytics of Data

Through data analysis, organizations can make decisions that enhance profits and improve efficiency. With this support of allocative efficiency (the value received from buying goods or services) and maximization of profits, analysis of data has been a major influence in the growth of businesses.

In 2024, it was reported that 78% of organizations investing in analytical data saw growth in loyalty from customers, and that 79% grew profits.

Return on investments in analytical data is primarily driven by the decrease in the degree of asymmetry of information between consumers and organizations that was made possible by making more information available to both about the products, prices and marketing of organizations to match the preferences of consumers. Many organizations use AI as a means of improving their ability to perform their analytical activities and connect them with the increasing trend of investments in technology.

Generative Engine Optimization (GEO)

Generative Engine Optimization (GEO) is the process of using generative artificial intelligence (AI) to improve the efficiency of information retrieval and search. As a result, companies have begun to allocate their marketing budgets towards GEO. This essentially means that companies will now need to be concerned with how customers discover their brand name when they perform searches using an AI tool (such as ChatGPT or Gemini) that returns AI-generated answers.

This also represents a fundamental shift in how digital marketers will be competing in the market. Traditionally, digital marketers competed using SEO to attain a ranking for their brand name in search engines. In contrast, companies that are referenced in AI-generated answers will be recognized first and create reputation effects for themselves versus companies that do not appear in AI-generated answers. Furthermore, GEO creates an additional barrier to entry for smaller businesses attempting to enter the market.

As more consumers adopt generative AI technology (currently 89% of adults use generative AI for information searches, according to numerous studies), GEO may play a significant role in digital competitiveness.

Modernizing the Supply Chain

Globalization and digital trade have changed the way we produce goods and increased the demand for more efficient supply chains across every sector. According to a study, 63% of the industry leaders will be investing in supply chains by 2025, an increase of 15% compared to last year.

The driving forces behind investments in a modern supply chain are the integration of the internet of things (IoT), automation, and artificial intelligence (AI) technologies for the following three main reasons:

(i) to reduce waste;
(ii) to increase coordination; and
(iii) to further sustainability initiatives.

Economically, companies are looking for ways to create more economies of scale, reduce transaction costs, and increase resilience by expanding their supplier networks to minimize risk associated with global supply chain disruptions.

The improvement of logistics by way of global supply chains that allow companies to source raw materials and components from around the world at the lowest opportunity cost impacts the comparative advantage of firms globally.

Final Thoughts on Investment, Productivity, and Long-Term Economic Growth

Each of the above provides a variety of types of investments that will help businesses increase their productivity, eliminate costs, reduce risk and create long-term economic growth. Using AI, businesses will change the way supply chains operate and the way companies collect and manage data, and they will integrate these changes together with other factors that affect business operations, including IT management and market strategy.
From the perspective of an economics student, these trends illustrate how businesses utilize capital investment to achieve maximum profit, and how they manage risk/uncertainty with respect to the impact of technology on pricing for goods and services.