In 10 years, over 40 percent of the Fortune 500 will no longer be around. By 2020, more than three fourths of the S&P 500 will be organizations that we have not heard of yet. Predictions like these are common. What if they turn out to be correct?
That’s the question I’ve been pondering since speaking at IBM’s Big Data Conference in Toronto last week. IBM is making a big push into analytics, and the field is taking off. Since their near-death experience in the ‘90s, when the market shifted away from mainframes and the company was caught flat-footed, IBM has done an exemplary job of embracing marketplace shifts. They’ve also gotten better at shedding. They sold off parts of their business (such as their PC division, and most recently their server division) to focus on higher value work such as Big Data. Clearly, this shedding and embracing skill is one that all firms will need to master in order to survive in the Age of Disruption.
How to do this is the question. Start by tracking the trends, especially technological, which are the fastest moving. Below are five that my team and I have been monitoring of late. Whether you’re with a small or mid-sized business, or a huge multinational, as you read thru these five tech megatrends, ask yourself: what might we need to shed (or stop doing) to take advantage of this development? And what do we need to embrace (or start doing) to capitalize off this trend?
1. Big Data Will Transform Healthcare, Government and a Host of Industries.
Big Data is the technology that allows more people to analyze more information from more sources in more ways than ever before. Everybody knows that data is expanding exponentially, but here’s how much: Ninety percent of the world’s data was created in just the last two years alone. The only downside is that 80 percent of that data is still “unstructured” – meaning it’s not fully digitized and therefore inaccessible. But companies that embrace Big Data will be able to make sense of the information at their fingertips, and derive new strategic benefits. New ways to cut costs, increase sales, personalize product offerings, and enter new markets. Since 2005, IBM has invested $24 billion in their data analytics business, including $17 billion in 30 acquisitions. And they are hardly alone. Key question: what are you doing to exploit Big Data in your company?
2. A Supercomputer in Every Pocket.
In just the past two years alone, the smartphone has become an essential mass-market device used by two billion people around the world. Qualcomm predicts that by 2017, seven billion smartphones will be sold. Soon, you won’t even be able to purchase a basic cellular phone. “We’re just now starting to live in the world where everybody has a supercomputer in their pocket and everybody’s connected,” Netscape inventor and tech investor Marc Andreessen told the Wall Street Journal. “For a lot of people, their smartphone will be the first computer they ever have, the first phone to connect to the internet, first way to learn online and organize politically and get accurate information and access to global markets.”
The way Andreessen is thinking about mobile technology is the way all of us should be thinking. The fact is, we’re just starting to glimpse the implications of five billion people having a supercomputer in their purse or pocket every hour of every day. Try this exercise: ask your kids (or grandkids) to think out into the future 10 years and speculate on what new capabilities the smartphone will be able to do? Have pen and paper handy, and take notes!
3. The Internet of Everything Will Usher in a Major Productivity Boom.
There are already more things connected to the Internet (and soon to your smartphone) than there are people in the world, according to Cisco research. This is the Internet of Things (IOE) megatrend and it too is gaining ground quickly. General Electric CEO Jeffrey Immelt calls IOE “tying together the physical and analytical worlds,” and he’s got his 315,000 employees busy doing just that. Since GE makes everything from power plants to locomotives to hospital equipment, IOE is a definite game changing opportunity to differentiate offerings and add unique value to customers seeking greater productivity.
Already, GE’s sensor-empowered machines kick out data about how they’re operating, where they’re in need of attention, and how they can be run more productively. GE’s analytics team crunches the data (See Trend #1, Big Data), and helps customers adjust machinery to be more efficient. By the company’s estimates, data of this sort could boost productivity in the USA alone by 1.5 percent, which over a 20 year period could save enough cash to raise average national income by as much as 30 percent! Internet of Things innovators are busy connecting not just machines, but buildings, factories, even cities.
The Spanish city of Barcelona is already using IOE to operate more efficiently and offer its citizens new services. Through connected water management, the city already saves $US58 million a year. Connected street lighting saves $37 million. And an estimated 47,000 new jobs have been created over the past seven years. Some observers, such as Cisco CEO John Chambers, predict IOT will have a much bigger impact on the world than the first 20 years of the Internet. Now that’s a game changer if ever there was one!
4. 3D Printing Will Change the Game in Manufacturing.
While much of 3D printing’s early days were confined to making small plastic items for giddy hobbyists, these are no longer early days. This fall, 3DP innovator Jay Rogers, CEO of Local Motors, will print an entire car! Meanwhile, practical uses are exploding. NASA uses 3DP to rapidly prototype at lower cost. Stage set designers on Broadway are using 3DP to churn out sample sets overnight. Ships at sea are using 3DP printers to make replacement parts, doing away with costly backup inventory. Just this month, a group of volunteers from around the globe have teamed up to form a charity that creates 3D-printed prosthetics for those who could never afford them otherwise.
3DP evangelists like Bre Pettis, CEO of MakerBot Industries (and a speaker at the recent Front End of Innovation conference in Boston last month), believe 3DP will ultimately transform manufacturing. Bre cites wages in China doubling every two years, and global supply chains interrupted in recent years by natural disasters, to argue that manufacturers will soon turn to the new make-on-demand technology en masse. “No more making and shipping and storing” is the new mantra. Not when you can customize and deliver instantly. Sales of 3D printers, materials and associated services was only $2.5 billion worldwide last year, according to market research firm Canalys. But that figure is expected to grow to $3.8 billion this year and soar to $16.2 billion by 2018.
5. Cloud Computing Will Disrupt and Enable Businesses.
Lanspeed, a 15 employee IT services firm in Santa Barbara, California, recently shed its last remaining on-premises server. The firm has fully embraced The Cloud, which CEO Chris Chirgwin reports is paying off in improved performance, greater reliability, at lowered costs. Lanspeed is hardly alone in taking advantage of this tech-megatrend — to serve customers differently, and to serve different customers. But the cloud is both a disruptor and an enabling force of change. For startups needing massive amounts of computing and storage power, The Cloud has been an extraordinary enabler of innovation. For others, it’s a potential disruptor. At IBM, The Cloud had the potential to displace big parts of the company’s business of selling hardware, software, and services to data centers. But the company is now embracing “Cloud DNA” big time with the goal of having 40 cloud-dedicated centers in 15 countries operational by the end of 2014. CEO Virginia Rometty’s message to IBM’s 400,000 employees: “Embrace the future, and quickly, rather than resist it.”
Not bad advice for all of us!