Buck Jordan here, and it is almost the holidays (finally)! I’m excited for a short break to wrap up a whirlwind year and spend time with family and friends, like I’m sure all of you are. But after a few days of rest and recovery, I’ll be getting back in the saddle and gearing up for another exciting year for startups and innovation.

Since the start of COVID-19, so much about the world has changed from how we buy things to where we work and how we socialize. Some of these trends have continued to stay with us and some have started to fade away. 2022 is going to be a year of transition and hopefully a year that looks a little more normal than the last two. Here are the top trends I’m keeping my eyes on as an investor and entrepreneur going into 2022 where I’m planning to allocate capital and hopefully start more companies.

The American Workforce

As I’ve written before, America is in the midst of a labor crisis driven by a nationwide shortage of workers. There are five million fewer people in the American labor force today than in February 2020, a huge gap that is having an impact across industries. This shortage of labor is driving employers to turn to automation to try to keep their businesses running when they can’t find workers to fill roles.

The companies that I’ve been building at Wavemaker Labs are all designed to complement employers’ labor force and help them alleviate labor shortages. Whether it is Miso’s Flippy robot – which takes over the dangerous and hard job of grilling burgers at a restaurant – or if it is Graze’s autonomous lawnmower – which automates the lowest value gardening tasks – our robots are designed to help employers keep running their business.

Besides a labor shortage, we also have a “Great Resignation” underway. Americans are quitting their jobs in record numbers, a whopping 4.3 million in August alone. In a time of uncertainty like the pandemic, why are so many people leaving their jobs? The truth is the experience of the pandemic has made us all pause and reconsider how we live our lives. Everyone has had the time and space to ask themselves what they value in life and what they want out of it. This has had ripple effects in the work we decide to do.

The combination of the Great Resignation and labor shortages are putting tremendous pressure on employers who are struggling to find employees and struggling to retain the ones we have. Will things stabilize in 2022 or will we continue to see a dislocated labor market? This has very important implications for the robotics companies I’m building and the companies I’m invested in. More importantly, these trends are opening up rich opportunities for robotics, HR Tech, edtech and other startups to help reskill workers, help them find new roles and automate jobs that people no longer want. I’m keeping my eyes peeled for startups in these areas.

Travel Boom

The travel and hospitality industry were unlucky enough to be two of the worst affected industries in the world by the pandemic, for obvious reasons. I don’t think it is an exaggeration to say the industry has faced some of the worst two years of its history. But over the course of this year, travel volume in the US has steadily been picking up, and we’re starting to approach our pre-pandemic levels. In fact, businesses in the space such as Southwest are forecasting a travel boom starting at the end of this year and over 2022. There’s huge pent-up demand for travel broadly across leisure and business, thanks to broad-based vaccination will likely be unleashed in 2022.

I’m keeping close track of this travel boom because I think travel is going to look very different after the pandemic than before and that opens up room for startups of all kinds to solve problems, grow their revenue and capture market share. For example, camping and glamping saw a surge of popularity during the pandemic, thanks to being outdoors and away from crowds and urban centers. It looks like this popularity will stick around even as the pandemic fades. Even the way we pay for travel is changing. Affirm’s recent partnership with American Airlines to offer Buy-Now-Pay-Later (BNPL) for airline tickets is an industry first and makes traveling more affordable for all of us, likely stimulating even more travel demand for 2022.

Inflation and the Supply-Chain

The last thing I’m keeping my eyes on are the challenges presented by inflation and continuing supply-chain challenges to the American economy. In the past week, the Federal Reserve reported that inflation rose 6.8% over the past year, the highest rate of inflation for almost 40 years. Inflation is raising prices across the economy, challenging our budgets and that of companies.

The causes of this rise in inflation are multifaceted but one major driver is labor force shortages and the production shortages this does cause, which is why I’m so focused on creating robotics companies to help plug these gaps. Automation can play a key role in the fight against inflation in 2022 and beyond. In addition, in response to rising inflation the Federal Reserve is going to start increasing interest rates in 2022 after bringing them to rock bottom at the start of the pandemic to try to protect the American economy from the damage of lockdowns.

Besides inflation, another major challenge to the American economy today is the tremendous pressure the global and American supply-chain is under. The global supply-chain is in crisis caused by a perfect storm of events triggered by the pandemic. Things are reaching a critical point. LA – where I live – has two of the busiest ports in the United States, LA Port and the Port of Long Beach. In October, the wait time for ships at LA port to be unloaded hit a record 7.6 days.

Imbalances of supply and demand across the world have thrown our carefully calibrated, hyper-efficient global supply-chain completely out of whack. Shortages of one item in one place are triggering shortages of other items elsewhere – such as the shortage of semiconductors and the resulting cuts in global car production. These supply-chain challenges are hurting everyone. We’ve even seen this at Wavemaker Labs where the cost of parts and materials for our robots are both increasing in price and increasingly hard to find. Once again, the supply-chain crisis is partially being driven by shortages of port and logistics workers.

Despite the dual challenges of inflation and supply-chain issues, I remain optimistic that technology can play an important role in helping solve these problems in 2022 and beyond. Startups in the logistics and manufacturing space in particular are likely going to have great years next year as businesses seek to increase production, reduce logistics costs and increase their overall business efficiency.

Looking Ahead

These three major trends are top-of-mind for me and for many other entrepreneurs, CEOs and investors across the country. As we enter the third year of the pandemic and hopefully begin transitioning more towards “normal life” the aftereffects of the pandemic, particularly the huge wave of digitization it kicked off are continuing to ripple. I think these three trends will dominate news and our conversations in 2022.

Startups in these areas will be in the right place at the right time, and as an investor, I’ve learned that is a huge part of the battle for building a successful company. Whether it is the shortage of workers, growing demand for travel and inflation or supply-chain challenges, the opportunities for startups in 2022 are going to be rich. I’m looking forward to finding the best companies building in and around these trends next year.