Skills needed: Startups will need IT workers with the skills related to building, piloting, and monitoring drones. Companies should also be prepared to adapt quickly to technological changes and frequently upgrade their products.

Barriers to entry: The capital investment for both research and development and the manufacturing of drones is high. New entrants will also have to patent their own products to gain a competitive advantage.

The downside: Though FAA regulations are expected to be finalized this year, the wait for them will delay demand for commercial drones.

Competition: A large number of industry players make competition high in this industry. Meanwhile, as U.S. companies wait for final regulations to become law, competitors outside the U.S. not contending with regulations can gain an advantage in the commercial and recreational drone market. China's SZ DJI Technology Co. is already the largest consumer drone company in the world.

Growth: The industry is estimated to have grown 6.2 percent in the U.S. in 2015 and is expected to grow at an average rate of 5.8 percent annually, to $4.34 billion, by 2020.

Industry experts agree that 2016 will be a breakout year for virtual reality. Consumers are expected to purchase several million VR headsets in 2016. These will be pricey models--estimates do not include Google Cardboard and other low-cost head-mounted displays that work with smartphones. For example, Facebook's Oculus Rift headset carries a price tag of $699. While the gaming industry is likely to be the initial driver for widespread use of VR, digital entertainment ranging from movies to live events will follow, as will content related to education and training in sectors like health care and the military, according to venture capital and private equity research firm PitchBook.

Why it's hot: As of November, virtual reality companies had raised about $630 million in funding worldwide across 120 deals in 2015, up from just $70 million and 13 deals in 2010, according to PitchBook. Facebook's $2 billion purchase of VR hardware, software, and content company Oculus in 2014 also helped fuel predictions that VR will be the next major technological breakthrough after mobile. 

Skills needed: New entrants in the virtual reality sector will need to be able to shoot and produce VR video content, host live streams of video experiences, and develop software for mobile-based VR.

Barriers to entry: VR continues to be an up-and-coming technology, making research and development a significant potential cost.

The downside: There are doubts surrounding whether VR will deliver real-enough experiences, and it's unclear when, if ever, head-mounted displays will become a mass-market product. High-end headsets that sell for several hundred dollars also pose a challenge for broad consumer appeal.

Competition: It's still early days for determining the level of competition, but about 60 companies are currently developing products in one or more of VR's three verticals: hardware, software, and content. In addition to Facebook's Oculus, companies working across all three include Jaunt, Magic Leap, and NextVR. Some of the industry's largest companies making hardware are HTC, Samsung, and Sony.

Growth: The value of the global virtual reality hardware market could be as high as $62 billion by 2025, according to investment bank Piper Jaffray. The global VR software market, meanwhile, could reach $5.4 billion by that year. Financial services company UBS has also estimated that annual device sales will reach more than 34 million units worldwide by 2020.

Why it's hot: The use of AI techniques and systems is expected to grow dramatically in the near future, with business intelligence companies likely to be one of the largest sectors adopting the technology. Venture capitalists invested $309 million in U.S. artificial intelligence startups in 2014, up more than 20-fold from 2010, according to venture capital research firm CB Insights.

Skills needed: AI startups require individuals with advanced computing skills and specific degrees focused on the technology.

Barriers to entry: Startups in this industry require highly skilled specialists, most of whom are frequently hired by large companies working on advanced projects for AI, like self-driving car technology. Gathering the necessary data to build required algorithms is also a major challenge.

The downside: Because AI is still an emerging technology, it's too early to say which specific fields it will benefit the most. Entrepreneurs including SpaceX founder Elon Musk and Apple co-founder Steve Wozniak also have expressed concern over the potential dangers of AI, such as integrating the technology with weaponry.

Competition: The number of new AI startups in the U.S. raising venture capital rose from just two in 2010 to 16 in 2014, according to CB Insights. Examples of major companies with AI products range from Apple's Siri and Microsoft's Cortana to industrial robots company Rethink Robotics, which raised more than $113 million in funding in 2015.

Growth: The global market for AI technologies in the U.S. is expected to reach $9.2 billion by 2019, a 100 percent increase over 2014, according to market intelligence company IDC. Meanwhile, market research firm BCC Research predicts that the global market for smart machines will grow roughly 20 percent per year, reaching $15.3 billion by 2019.

Published on: Jan 19, 2016