The next technological revolution: arising out of opportunity, habit and potential revenue
In the 21st century, we have already had two major crises. At the beginning of the century, there was the so-called dot.com bubble crisis and the 2008 mortgage crisis. Of course, there have been many breakdowns in the world over the last 20 years, but most of us are quite familiar with these two crises. I would like to make a simple analysis of what these two crises have led us to and what they have created in new technologies, economy and business.
But first, a bit of background on how revolutionary emerging technologies become disruptive. From history, we know that when all circumstances were favorable, technology became disruptive and caused a torrent of industrial progress. Electric or gasoline engines, X-ray machines, vaccines, airplanes or other means of transport are just a few examples In the third industrial revolution, such innovations were undoubtedly the Internet and mobile telephony. This transition of technology from an evolving to a disruptive role can take place in two ways: revolutionary and evolutionary.
The revolution usually leads to completely new business models. These are ways of doing business and achieving success in a way that did not exist before. An example is e-commerce, which appeared only after the spread of the Internet. Nobody had ever dreamt of it before.
Revolution from an emerging to disruptive technology[1]
Similarly, due to regulatory, legal or ethical uncertainties, many products that were not viable solutions return as potentially viable ones. For instance, Google Glass, with its concept of augmented reality, could have impacted the world a long time ago. However, concerns about privacy breaches were raised and the concept was blocked. Now, we see the return of this technology, and it can trigger a massive development. Because we are not only talking about Magic Leap or Microsoft HoloLens, or just the sense of vision, but also about a similar concept for sound, such as Bose AR, which are providing augmented reality capabilities in sound as another element in the whole disruptive orchestra.
Evolution from an emerging to disruptive technology
The internet bubble created many short-lived companies promising us revolutions in the market and ways of life. Many of us remember t e-commerce, e-health, e-everything, was a constant topic for conversations. Amazon, founded in 1994 and listed on the American stock exchange in 1998, is one example of revolutionary disruption. Besides e-commerce, it was Amazon that introduced the cloud. Why was that possible? Because there was the technology, market need and, most importantly, the industry and regulators didn’t resist. The habit of buying over the Internet today is used by many firms and individuals, but it is Amazon that is the icon of change.
Similarly, unnoticed, Google entered our homes and revolutionized knowledge management. You probably know that this company, founded in 1998, in the midst of the Internet bubble bursting, went on to eclipse any memories of AltaVista and AOL, not to mention impacting Yahoo, the star of those years.
After the spread of the internet and after the markets cooled down from the turmoil of the crisis in technology companies, the first decade of the 21st century saw the great boom of mobility, and especially smartphones, as a breakthrough in the way of communication. Voice communication gave way to ubiquitous data transfer, including social networks, text messaging (SMS) and video content. Facebook, YouTube and Twitter are now one of the keyways we communicate, and they also lay the foundations for thousands of new businesses around the world. This sociological disruption, like Amazon or Google, is changing our world. We started making money on data coming directly from users.
The 2008 crisis shook financial markets to the core. Many firms laid off employees or went out of business. But others, particularly start-ups, developed new products, mostly based on the trends in customer experience and user influence. The speed and scope of reaching users became so great that in a few months, companies were created whose small application dominated markets. Instagram, Groupon, WhatsApp, and other platforms introduced new values, business models and created a new type of customer that is connected nonstop.
What can we learn from these two examples? Maybe it’s an oversimplification, but I’ll dare to say it.
In a crisis, big companies try to change their products and services (in an evolutionary way) at all costs. They try to adapt them. They are enormously challenged during the crisis. Their people are concerned about their job stability; they need to protect their brand that is associated with a certain quality and is known to the market; and, most importantly, they are challenged in new ways with their partners and their place in the supply chain. And in this case, any changes require long hours of meetings and numerous compromises.
Meanwhile, small and medium-sized enterprises (SMEs) have a huge liquidity and cash flow problem. They are afraid of the risk of losing customers and their market position. While in large corporations there may occasionally be leaders who were able to anticipate an impending crisis and invest adequately in the future, in SMEs, preserving the status quo and protecting the current status is omnipresent.
So, who will be the winners and future unicorns? Who can take advantage of the new opportunities that will surely arise – post, and even during, the pandemic? The answer is simple. It is those who, see the needs of the market and have no resistance from the industry and the regulator and are able to use the time of paralysis (usually 12 – 18 – 24 months) to build a product and adapt to the needs of customers (such as technology following habits), scale it globally, and convince users that this new approach is something different.
A new way of learning and working for business resiliency
To sum up, we have learned how to buy and communicate efficiently over the Internet. We have a reliable, widely available medium for ordering and processing payments, and finally, we have several new data-based business models that we can do business with.
Starting from the current crisis, we will be open to a new way of learning and working, such as remote and robotic, a new way of monitoring our lifestyle and health (those privacy barriers that were resisted are already fading) and accurate, real-time manufacturing, logistics and transport processes. The latter change will be linked to the powerful economic transformation of the world in terms of producing goods and processing raw materials and products.
In fact, responding to any crisis requires a structured approach. The challenge is to be methodical when everything is changing daily. Yet it’s vital for companies to understand business continuity holistically and build resilience for what’s next and help reframe their future for what comes beyond the pandemic.
This new world order will be based on data and knowledge-based business. The great disruption will implement more control over everything and everyone. Hopefully, these initiatives will create new values and business models.
[1] SPEED no limits in the digital era. ISBN: 978-83-64507-40-3 (6). www.speednolimits.com
©️ Picture and article by Aleksander Poniewierski, 2020
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