Regardless of your business model or the industry you operate in, you need to be prepared for the disruptive effect of technology innovation. We’ve already seen to a great extent what technology disruption has done to the retail space, but that’s just the start of the Australian industries that will be shaken up in the coming years.
Take for example Netflix, which has become a difficult competitor to traditional broadcasters in the US, or the Tesla motor vehicle that is shaking up the car industry, also in the US. Even foodstuffs are under fire from technology disruption; just consider how cigarettes are being challenged by the e-cigarette.
All of these technologies and more are coming to Australia, and in abundance. And as with bricks-and-mortar retailers that were slow to adapt, those traditional businesses that can’t respond quickly will be at risk. A report from Gartner in August 2014, titled CEOs And CIOs Must Assume That Every Industry Will Be Digitally Remastered wrote that “breakthrough product innovation disruption of this kind will come from two main sources: startup companies unencumbered by legacy beliefs and business models, and tech companies entering adjacent markets.”
So what can local businesses do to combat the disruptive trend?
The most important thing is that they tune their businesses to be better prepared to be innovative and disruptive themselves. Many businesses (especially larger ones) with traditional business models are not set-up to be flexible or to react to disruptive trends with the kind of dynamism that they need to. This means they will need to have more dynamic IT systems, make better use of customer data and analytics, and have a marketing strategy that is better integrated with the IT team and fully focussed to market needs.
For example, the reason so many traditional retailers have struggled with online retail is because they were slow to bring the kind of competencies into their own businesses needed in order to develop their own online presence. They’re trying to play catch up now, but they’re now also in direct competition with overseas online businesses that are now well established and ingrained into Australian culture.
It’s also important to be aware of the disruption before it hits. Tesla and Netflix’s entry into Australia has the more traditional businesses worried, but it raises the question – what have the local businesses done despite knowing of the presence of these businesses in the US?
The most important thing all businesses need to be doing is keeping an eye on overseas trends and where disruption is coming from. Silicon Valley in the US is a good place to start, but there are booming startup tech hubs around the world too – Israel is rapidly growing as a place of innovation, and any organisation in the telecommunications space that hadn’t been keeping an eye on China would have been shocked to see what Huawei has done in recent years. For many sectors Australia is not the first market, and that means that an aware and nimble local organisation that can proactively prepare for disruption will earn itself a window in which to prepare its own competitive advantages before the disruption hits.