Is your company safe? What about your job? And those of your children, too?
If you haven’t been asking those questions of late, give a thought to Microsoft, Nokia and Kodak. All three have been, at one time or another, the global kings in their respective industries of software, cell phones and photography. Just a decade ago, Microsoft was the largest enterprise in the world by market capitalization, the total value of all its shares based on stock exchange prices.
Today, however, Kodak and film are a tiny drop in the ocean of largely digital photography, and a frequently cited case study in failed strategy. So too is Nokia, another victim of so-called disruptive technology upending its mobile telecoms industry. From half a billion phones sold in a year less than a decade ago, Nokia has fallen far behind Apple and Samsung, is reportedly laying off 10,000 staff worldwide by December, and has seen its market capitalization plummet from $222 billion in 2000 to about $16 billion this year.
And Microsoft? It’s still one of the top 10 companies in terms of market value. But the summit now belongs to Apple Computer. The Cupertino, California, company was valued at a record $656 billion last September, and has hovered around $400 billion this year, eclipsing Microsoft’s own record value and that of longtime most valuable company Exxon Mobil. One big reason: Growth in the use of smartphones and tablets, where Apple’s iOS and Google’s Android are the prime platforms, have outstripped that of Microsoft-dominated desktop and laptop computers.
As expounded on ad nauseam in many a business strategy classes, rapid technological change overthrew erstwhile empires Kodak, Nokia and Microsoft, with billions of dollars in sales and profits lost and tens of thousands of jobs vanished. Not to mention such former household or boardroom words as Xerox and Wang, while reining in erstwhile leaders Intel, HP, and Dell. And if it can happen to these once-high-flying players, it can certainly happen to you and your company.
Welcome to the brave, nasty world of disruptive technologies, the kind that turn mammoth industries and enterprises upside down, especially when they’re not looking.
And from the May report “Disruptive technologies: Advances that will transform life, business and the global economy” of McKinsey Global Institute (MGI), the waves of high-tech change rocking businesses worldwide are set to get even choppier, stormier—and scarier.
The disruptive dozen. MGI focuses on 12 technologies expected to have huge, sweeping impact on life, business and economies over the next dozen years, about the same time it took Apple to rise from information technology’s troubled maverick to IT’s most valuable player, dethroning Microsoft, Nokia and Blackberry, among other behemoths. Coming from pretty much all major technological fields, from IT and genetics to advanced materials and energy, the coming innovations will likely miss no major aspect of human life, enterprise and society. And they certainly will not spare any enterprise or endeavor aiming to still be around in 2025.
The 12 technologies “share four characteristics,” says the summary (on page 2), “high rate of technology change, broad potential scope of impact, large economic value that could be affected, and substantial potential for disruptive economic impact . . . leaders need to focus on technologies with potential impact that is near enough at hand to be meaningfully anticipated and prepared for. Therefore, we focused on technologies that we believe have significant potential to drive economic impact and disruption by 2025.”
To get to the final dozen, MGI, the business and economic research arm of US-based worldwide consulting firm McKinsey & Co., started with more than 100 potential disruptors “drawn from academic journals, the business and technology press, analysis of published venture capital portfolios, and hundreds of interviews with relevant experts and thought leaders.”
Nearly listed, but dropped for being unlikely to have major impact by 2025 were nuclear power and water purification advances, quantum computing, and carbon sequestration to suck in greenhouse gases. Others like space travel, wireless charging, LED screens, and flexible displays, though highly hyped, never even got close.
What did eventually make it into the disruptive dozen are listed in the table on this spread, along with how fast each innovation has advanced in recent years, the potential areas of its projected impact, and the estimated economic value which the technology may have. The “disruptive dozen”: mobile Internet for everyone everywhere, online-controlled and -monitored devices (“the Internet of Things”), cloud computing, knowledge work automation, next-generation genomics, robotics, 3D printing, advanced materials, self-driving vehicles, new oil and gas extraction techniques, power storage, and renewable energy systems.
Drawing from MGI and other research online, the Center for Strategy, Enterprise & Intelligence has published a two-issue special edition of The CenSEI Report covering disruptive technologies. Seven of the eight articles in the package dwell mainly on the impact on everyday life and society. On the other hand, the broad business impact is given initial coverage in this eighth article of the package, with special focus on enterprises and industries in developing Asia, with future reports to zero in to specific industries and major economies.
Readers interested in the disruptive technologies report and materials, including McKinsey’s seminal study, may email firstname.lastname@example.org for a free copy. As will emerge from all the CenSEI articles as well as linked material like MGI’s studies, the speed of technological advancement and spread is easily underestimated and often ignored by so many businesses, even giant corporations that have any number of smart, trained executives to spot, analyze and prepare for trends. Well, if it can happen to Nokia et al, it can happen to lesser enterprises.
Did you know, for instance, computers are emerging which can handle random questions from a client? Not as well as a call center agent in Makati or Bangalore, for sure, but the hardware and software are advancing fast, with significant chunks of business process outsourcing activities due to be taken over by machines before 2025. What does that mean for the $15-billion-a-year Philippine BPO industry as well as the retailing, property and other ancillary sectors serving and depending on it?
That’s just one of the technologies and implications assessed in The CenSEI Report’s package on disruptive advances. And in reading and pondering the high-tech trends, we will hopefully be forewarned and forearmed.
(Excerpt from The CenSEI Report on disruptive technologies and their implications for society, business and living. For copies, email email@example.com.)