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Disruption will knock on your door, sooner or later. But in what shape? Tune Hein, the author of “Disrupt or die” and “Disruption – the future leadership challenge” gives his take in this article on what the future will bring, and how to prepare your business – public as well as privately owned –for the new business models. Read this and learn about the patterns in the chaos of disruption, that makes you capable of choosing the right strategy to respond to the market changes.
The prime minister of Finland, stated that Apple has destroyed his country. The Finns have been disrupted. Because we send emails instead of physical letters, is their forest industry suffering a massive loss and about to vanish. And the introduction of the iPhones, destroyed Nokia. So, it is safe to say that Disruption not only affects companies, but also affect nations. It is a trend, that we’ve only seen the beginning of.
Seen from a national perspective, is disruption also a battle with regulations. The easy way in for new innovative companies, is typical in highly regulated markets. Here the established players are particularly heavy and less agile due to the cost of regulation and low competition. So, “easy” victims. With the point being that the societal model most likely, will be overrun at the same time. The regulation is a societal choice. For instance, we have chosen that taxis should be regulated – which is challenged by Uber. The whole idea of everyone becoming Freelancers, challenges our employment rights (Employment Act). It is not just for the sake of it, that financial companies are regulated – so what about crowd-funding and peer-to-peer lending or insurance? Many new services are based on user validations of the provider, rather than validation from the government. A good example of this is, that the Uber drivers is assessed by the users, whereas the taxi drivers is assessed by the regulations and government. The questions here is: Are the consumers better at it, then the government? In short, it is time for us to review and reconsider some of the many areas that we have legislated and regulated. Should the current legislation be adapted to the new open types of competition, or should we find new and different ways to defend the current model by. The first lawsuits against Pokémon Go already happened, because the game places virtual objects on private property… Can our legislations handle it? And how should we handle the liability and insurance issues in the sharing economy? Or when self-driving cars etc. becomes regular objects on the roads.
The new digital economy, is not just a bliss. There are massive issues, in regard to security, copying, quality, cheating and identity theft that makes multiple markets opaque and provide space for determined “wild-west” business practices. In addition, there are absolutely basic questions about law and data security that have not yet been answered satisfactorily. And we will probably be waiting for a long time, for example, on a contemporary consumer protection – if ever.
Any e-commerce store will probably already know that there are massive issues with fake credit card information online. There is “fraud” and there is “friendly fraud” where even your affiliates use fake card details to trigger a bonus from you without making real sales. There exist affiliates who are not at all near to comply with the laws or good marketing practices / ethics on your behalf. But, of course, it also opens up business opportunities for others…
Basically, all online shopping and digital businesses are global and beyond national scope. There are simply no global laws that can help regulate markets and players. In the free liberal thinking, one can argue that it is an advantage for global innovation and competitiveness. And that competition will benefit the consumer. But it requires that you know that the rules of the game are very different, because legislation is not always able to follow. Once the authorities have created legislations and changed law accordingly to the changing market conditions, the world has already moved on.
The new entrants will often take advantage of global access and utilize it as a competitive advantage: they do not feel bound by local laws, regulations, union agreements and unwritten market rules. This puts the established players, which are likely to comply and obey all local rules, in a difficult competitive situation. A good example here is SAS vs Ryanair. As the market already is global, there is no doubt that further local regulation is hardly the answer to the problem. Our expectation is, therefore, that instead we experience a deregulation of many markets over the next few years, which will mean further opportunities for disruption.
Another national angle of disruption is the issue of the public sector. Will it also experience disruption? Yes. As we’ve seen it, it is being challenged in every case of regulation. But there are more reasons, that you as a public manager should keep reading this. Digitization is already a huge issue in the public sector. It will of course continue, but the one that should be especially noticeable is the rapid development of citizens’ expectations.
In other words, SMACI (the slogan for the advancing technologies Social-Mobile-Analytics (big data)- Cloud-Internet of things) also applies to the public. When Tinder is able to simplify the completely, and look how user-friendly ApplePay is, but then we also immediately expect that the Taxes, Doctor and other public services immediately do the same! And they can of course also do this, if they are on their marks …
The public sector will also experience and be influenced by big data. Here is the collection and use of data for better services just as relevant and perspective-rich in public as in private sector. Could big data replace (the missing) supervision of municipal grants – and create transparency that gives citizens the confidence that their tax money is distributed wisely to associations and individuals?
Could the many thousands of public cars collect valuable traffic information that could be used both for planning and selling? Could new laws and directives be evidence-based rather than the authorities guess the effect – with unsupported estimates?
For example, how would primary school look if it was based on big data?
This is by the way Google manages all of its HR efforts. Soon, here in Copenhagen waste bins will be online and data driven, so they can tell when they are to be emptied.
Some public functions are also directly disrupted. For instance, what does our future hospitals look like? Will people be hospitalized at home? Is telemedicine used, so our radiologists are Indian specialists that is able to see the pictures once they are taken and online 24/7?
Will we experience an explosive growth in wearables (IoT) for measurement and analysis of our physical condition, instead of the patient carries out for old-fashioned blood samples? Will operations be done by a small robot capsule you swallow? The one who controls the robot, is not necessarily at the hospital, but is perhaps specialist at a hospital in Warsaw.
The Minister of Justice in Denmark has proposed to outsource parts of prisons to cheaper eastern countries for those clients who still come from there. The metro is already self-propelled, and self-propelled buses are booked in Aarhus. The metro is already self-propelled, and self-propelled buses are already ordered here in Denmark.
Will disruption save the world? Maybe. It is at least the mission for some of the major disruptive players. The causal link that you might see on the horizon is:
– Significantly cheaper and more efficient solar cells, which, together with significantly cheaper and more efficient batteries, potentially could solve the world’s energy problems.
– This is important because cheap energy drives our entire world.
– As a side effect, CO2 emissions will fall dramatically. And geopolitically it will have major consequences if the oil price continues downwards.
– Once the energy problem is solved and energy is cheaply available, the world’s water problems are also solved. Due to the huge requirement for energy, when desalination water.
And if we succeed in this, we can desalinate all the saltwater that is available and ensure clean water all over the world.
– If there is enough water, then there is enough food because it can be irrigated.
Disruption might be the way out and resolution to many the problems, that we face as a global society. And if get a future – what will it bring? Here are some examples that will fundamentally change both your personal and your business life.
– A major disruption of daily life will be the self-driving cars. It is often claimed it will be 20 years from now, before they arrive – but we think it’s going to go much faster. The metro is already self-propelled, and the first self-driving buses is already ordered in Denmark (Aarhus). The Google cars have already driven over a million kilometres, with virtually no accidents, and in Göteborg, self-driving Volvo’s is driving around. In autumn of 2015, the American Tesla’s was automatically updated with a software that contained autopilot. So, the self-driving cars are on their way. And once they hit the market, there will be a tsunami that disrupts a whole range of industries. Traffic accidents and auto support will be minimized. The entire infrastructure will be different with less traffic bottlenecks and congestions because the cars will have a better flow. Driving schools can close because your children do not need to take a driving license at all. On the other hand, the children transport themselves when they are going for recreational activities so that “soccer moms or dads” can forfill a full-time job. The racetracks will have golden times because it’s only here, people with “gasoline in the blood” can be allowed to drive themselves.
– Artificial intelligence is another invisible thing that we will think about. It’s already many places in our daily lives, but what will happen the day when technology is not able only drive us, but also think for us? What if a self-driving taxi via Blockchain can pay for its own repair and maybe buy a new taxi to drive separately … For instance, Novo Nordisk has just hired IBM to dig deep into all their clinical data to find contexts, effects and treatment improvements, as no pharmacists would have a chance to spot. And the financial market already uses a lot of algorithms and robots to make investments. And the latest book in the Millennium Series, “What does not kill”, focuses on an interesting dilemma:
– What happens, the day we manage to develop an artificial intelligence that is wiser than ourselves?
The reasoning is that, it will also be able to develop an artificial intelligence that is wiser than itself, that again will be able to … It might give a lightning explosion of intelligence that will put humanity off the sidelines like a stupid amoeba. And it’s not pure science fiction – when three technology-inspired geniuses like Bill Gates, Elon Musk and Stephen Hawking\s all express great concern about artificial intelligence – it’s worth a thought …
– 3D printing is also a good example of IT Enabling that will change the world. In 3D printing, the product is not the news – it’s the entire process that is completely changed and shortened from design to production. The product is carried out by IT. If you had to produce your own shoes before, you should first get through a design process which was translated by an engineer for a manufacturing method. Then materials had to be purchased and machines had to be installed. It could hereafter finally be produced in China, and afterwards shipped home to you. 3D printing enables you to send your design in one step: From your computer to the production machine directly. And it has no labour, so it does not have to be in the placed in e.g. China.
It is also claimed, that some also believe that 3D printing will help save the world. Food problems can be solved by printing delicious foods from insects’ raw materials …
– Robots and artificial intelligence are expected to take over 50% of all the jobs we know today. Amazon is working on making flying drones delivering your goods, as common as shopping carts. In addition, those drones who can carry a person was launched this year – so it might be the goodbye to the helicopter pilot.
Stanford Professor James March often uses the term “A world enriched by change”. And maybe that’s the way we should look at disruption. It is probably a threat to all of our established business and all the value creation and jobs that exist there. But there is also a endless possibilities…