Be the Disruptor, Not the Disrupted

Be the Disruptor, Not the Disrupted

By Justin Starr

In the past 25 years, modern society has undergone a number of significant changes due to the emergence of new and disruptive technologies. The emergence of the Internet and connected personal computers made it possible for individuals to freely access information and communicate with each other from the comfort of their homes. Companies at the forefront of this trend, such as PC manufacturers, software developers and upstarts like America Online, saw double, and even triple digit growth.

Simultaneously, companies that failed to anticipate the impact of the Internet were decimated. The U.S. Postal Service struggles to cope with mounting losses and a 36% reduction in mail volume due to advances like email and paperless billing. Newspapers have undergone a wave of consolidation as free access to information threatens traditional publishing models. For example, Encyclopedia Britannica survived the American Revolution, two World Wars and the decline of the British Empire, but was unable to compete in a world of Wikipedia. Encyclopedia Britannica went out of print in 2012 after a 244 year run.

Indeed, the only thing that remains constant about technology is the fact that it is constantly changing. Anticipating these changes is a high stakes endeavor – companies that succeed reap great rewards. Those that fail to adapt can quickly fall behind, losing market share, influence and profits. Garmin, one of the first manufacturers of Global Positioning System (GPS) navigation devices, has become synonymous with the technology and saw revenues increase ten-fold ($105 million to $1.77 billion) over a ten year period. Simultaneously, Rand McNally, a name that had been synonymous with maps since 1856, filed for bankruptcy in 2003, as it failed to anticipate both GPS navigation and Internet mapping software.

Looking Forward

In hindsight, it is easy to identify transformative technologies and criticize the business strategies of companies that failed to adapt. Yet, accurately predicting the course of disruptive technologies as they are being developed is a much more difficult endeavour. Corporate Research & Development departments may have relationships with local universities, but globalization means that innovations are now arising from research labs located in Europe, Asia and elsewhere.

In order to accurately identify disruptive technologies, PreScouter relied on its network of more than 500 scholars actively performing cutting-edge research in 5 of the 7 continents. Our team of scholars examined thousands of technologies being developed at their universities and beyond. Of these technologies, the scholars selected the 9 most likely to disrupt established business models in the near-term, based on the following criteria:

Signs of Economic Success. Even the most breathtaking innovations have severely limited utility if they remain confined to the laboratory due to high costs or missing infrastructure. Technologies selected in this report have progressed beyond lab-scale validation. They have already shown signs of successful commercialization and are beginning to enter the marketplace.

Interdisciplinary Impact. While every industry experiences its own ‘revolutions’, disruptive technologies, such as the Internet or smartphones, impact multiple industries simultaneously, becoming global phenomena. The technologies detailed here have the potential to transform several industries simultaneously and are not limited in scope to a particular domain.

Near-term Consequences. It goes without saying that by the year 2100, our world will barely resembles the world of today. Yet, it is almost impossible to predict how exactly that world will be different: Remember the predictions of flying cars from the 1950s? Technologies mentioned in this report are on the cusp of major breakthroughs, and are expected to have significant impacts in the next decade.

Revolutionary Potential. While 99% of change is evolution, most companies are able to accurately predict gradual, incremental changes. This report details the 1% of change that is revolutionary and likely to disrupt, rather than extend existing industries. Although these technologies build on existing developments, they are likely to incur significant changes to business models and practices as they are implemented.

As a result, the following nine technologies were selected based on their potential to disrupt the global marketplace by 2025. A brief summary of each technology follows below, while a more comprehensive overview can be found in the relevant sections of this report.

Big Data – In just two years, mankind generates enough information to fill 67.5 billion DVDs, and the amount of data an individual produces is expected to rapidly increase due to advances in mobile and wearable computing. Decreasing costs of storage have led to a situation where companies can retain vast quantities of data that were previously discarded. Analyzing this data in intelligent ways will enable companies to establish predictive relationships, based on subtle, almost undetectable cues. This will revolutionize the reliability and efficiency of manufacturing processes, targeted advertising, customer service, and medical care. Advances in algorithms and natural language processing will ultimately enable non-technical users to quickly extract valuable information. Because of this, Big Data is expected to be a $50 billion industry by 2017.

Automation & Artificial Intelligence – While artificial intelligence has long been associated with robots, it is beginning to cross-over into consumer products and has become a $20.5 billion industry. Virtual assistants like Siri and Cortana have outgrown their gimmicky phase to become legitimately useful tools. Backend AI enables websites to present entirely different storefronts to consumers based on their demonstrated preferences. Coupled with advances in computer vision and the prevalence of smartphones, this will lead to major advances in understanding and predicting individual preferences.

Internet of Things – While the utility of the Internet for personal computers cannot be overstated, millions of devices remain unconnected to the Internet, and require costly and time-consuming status checks, maintenance and repair. Industrial internet technologies will use low power networking to put all of these devices and components ‘online’ so that failures can be detected remotely. By 2022, these advances will result in a network of more than 50 billion connected objects. Coupled with advances in Artificial Intelligence, this will ultimately lead to the production lines that are able to autonomously route around damaged components, creating smart factories which will contribute $2 trillion in value to the global economy.

Microelectromechanical Systems (MEMS) – Sensors and actuators are critical devices for transferring information between the physical and digital worlds. While early sensors were large, bulky and prone to failure, advances in miniaturization have led to micro-scale devices that can be combined on a single chip. These MEMS are already revolutionizing medical care and industrial diagnostics, and are poised to lead to rapid advances in haptic control as accelerometers and gyroscopes are placed in every electronic device a person carries. As smartphones replace entire laboratories of equipment, the $12 billion MEMS market has experienced annual growth rates of more than 20%.

Nanomaterials – While smaller materials are advantageous for continuing to drive miniaturization, many substances display dramatically different properties at the nanoscale. Materials like gold and silicon can undergo radical changes in color and fluorescence as surface properties begin to dominate bulk effects. This can extend beyond color, as nanomaterials have been engineering with strengths, conductivities, and thermoelectric properties that are orders of magnitude better than traditional materials. While these effects were typically reported in academic journals, companies are now integrating nanomaterials into actual products. These products have properties that are unmatched by the competition. The global market for nanomaterials has increased by an order of magnitude in the past decade and is estimated to exceed $25 billion.

Biotechnology – While farmers have been performing some type of genetic engineering for centuries, a detailed understanding of genes and advanced laboratory techniques has enabled agricultural science to extend beyond breeding and crossbreeding. Crops can now be created with extra-species genes to increase salinity tolerance, vitamin content, and drought-resistance, saving lives and eradicating hunger. Annual revenue from these crops exceeds $80 billion annually, and continues to grow. Further, these same techniques are poised to make plants and bacteria into micro-manufacturers of energy, drugs, and other useful products.

Terahertz Imaging – The paradigm of sensing has typically mirrored the human body’s way of obtaining information. Cameras replicate sight, microphones replicate hearing, and transducers replicate tactility. Terahertz imaging extends sensory capabilities by moving beyond the realm of the human body. By using electromagnetic waves with terahertz frequencies, imaging devices can be designed such that they can penetrate structures and simultaneously provide information about their chemistry. Sensors based on this technology are already being used to enhance path planning in self-driving cars and detect previously ‘invisible’ explosives. The market for THz devices is expected to grow by 35% annually and exceed $500 million by 2021.

Advanced Energy Storage & Generation – As the world’s population continues to expand, so too does its need for energy. This demand is coupled with new regulations designed to curb climate change. Advances in supercapacitors and high-capacity batteries are leading to distributed, rather than centralized, models of electricity generation. Advancements in battery technology alone are expected to have more than $415 billion in economic impact. Further, new legislation has created tremendous financial incentives for “greener” products. Whereas cold fusion power was once regarded as a distant, fantastical idea, there is strong evidence that it could be a viable source of energy in the next decade.

3D Printing – While rapid prototyping has existed for decades, 3D printing techniques represent a significant transformation. Commercial 3D printers have dramatically reduced the cost and increased the quality of printed materials. Companies are now using 3D printed parts as finished products rather than internal prototypes. As the cost of 3D printers continues to decrease, distributed manufacturing will arise as consumers will be able to print parts and materials on-demand in their own homes. As a result, 3D printing is currently a $3.1 billion industry, growing at a rate of 35% annually.

These descriptions represent the tip of the iceberg. At our webinar on December 9th, a team of graduate researchers heavily involved in these fields will give a much more detailed presentation about the impacts of these technologies.

While the future of technology is rife with uncertainties, one things is clear: technology is constantly changing. Failing to adapt to those changes can cost a business dearly, as the legacies of Kodak, Montgomery Ward, and Borders can attest. PreScouter’s upcoming webinar, 9 Disruptive Technologies Changing the World, can help you get a head-start on implementing these innovative disruptive technologies for your company in 2015.



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