Last week, we asked you to put your questions on the disruptive affect of technology on businesses to Mark Spelman, Global Managing Director of Accenture. Here are his responses.
1. Md Rafsan Ahmedfrom Facebook asks: Will the technology industry boom for an unlimited time or are bottlenecks on the way? Do big companies need to have the psychological threshold to face the consequences or to work on the implications at hand?
The technology industry tends to evolve in waves. The interesting development today is the convergence of existing technologies that are creating new possibilities: sat nav-based apps on our phones for instance, or machine-to-machine innovations. We tend to see incremental development and then occasional leaps forward as new applications and latent demand find each other.
Companies need to adopt a new mindset, one whereby they can respond swiftly to the increasing pace of technological developments while also introducing new business models to suit different market opportunities as they arise. They must be willing to embrace the technologies that are threatening to disrupt their market. By moving swiftly, they are more likely to master those technologies and spot new market opportunities that arise from them.
2. Marissa Drouillard from Facebook asks: The question isn’t will leading companies survive in the face of digital technology, but how will the ubiquity of digital technology affect us as a society (positively and negatively).
It is true that this question is also relevant. There will be both negative and positive impacts on society. And these issues were discussed at Davos. We see in areas such as data privacy that new policy approaches are being developed to respond to the concerns of citizens and consumers. It is crucial to have an open debate about the consequences of new technologies. The World Economic Forum and its partners are clearly committed to such a public discourse. This is a debate that must involve both the public and private sectors, policy-makers and other stakeholders representing consumer interests.
3. Jakob Rutqvist from Facebook asks: What will the new era of digital technologies mean for job creation? Are we entering an era of jobless growth? If so, what needs to be done about it?
At Davos there was much discussion about inequality, youth unemployment and the impact of technologies on lower-level roles as well as middle-manager roles. On the other hand, new technologies tend to create jobs in new services. Machine-to-machine technology clearly cuts out the middleman and automates tasks, for instance, but we are also seeing demand for analytic skills outstripping supply as vast volumes of data are generated by machine-to-machine. Many of those jobs are highly skilled, perhaps more so than those hat are lost. Policy-makers need to understand that entirely new skill sets are required in the digital age and more effort needs to be made to improve the skills of existing workforces.
4. Ulrich Weihler from Facebook asks: There were already several innovative approaches to change the market structure in favour of SMEs before digitalization. But maybe leading companies applied them better, due to greater knowledge. Maybe the same now. Are there arguments for this position?
In the past decade we have seen start-ups, including tech start-ups, dominate the digital landscape. Application developers – Square, Spotify, Twitter – seemingly came from nowhere and stole the show. We now feel that large companies are beginning to embrace these technologies and neutralize the threat that they have been facing from disruptive companies. Larger companies have vast volumes of data and insight about their large customer bases. They have enormously varied skills. They are already well established in multiple markets. True, they will have to become more agile and more willing to embrace change. But we believe the next decade will see big companies become truly digital businesses.
5. Frank Woodward from Facebook asks: As the years go by, companies implement automation to streamline processes and procedures. How can they balance the implementation of cost-effective technologies without affecting the workforce?
They need to ensure that the skills of their workforce are developed to take on the new roles that will be created as a result of new technologies. In many cases, those roles will actually be higher-value roles than the ones they replace. We will also see a change to the distribution of roles up and down value chains as digital technologies change processes, supply chains, as well as products and services themselves. And so companies will have to work with their partners to ensure that the displacement and change of roles throughout the value chains can be managed in a way that balances the benefits to business and to workforces.
6. Adam Borowski from Facebook asks: Aren’t we heading down the slippery slope by allowing the omnipresence of technology to take over our lives? What is the level of cooperation between governments and the leading technology companies?
There will certainly be issues with the emergence of ubiquitous smart and digital technologies. But I am optimistic. We tend to prejudge the use of technologies. We were told ten years ago with the arrival of the mobile Internet that we would all be checking stockprices on the go or having the fridge automatically re-order milk for us. Those applications would have been oppressive for most of us. And they didn’t happen. Why? Because there was no demand. The applications that have had success are more consumer-riven. Power is increasingly in the hands of consumers and companies are having to be far more attentive and responsive to consumer needs.
Image: The Twitter logo on the floor of the New York Stock Exchange a day before the company’s IPO. REUTERS/Brendan McDermid
Author: Mark Spelman is Managing Director of Accenture. He is participating in the World Economic Forum’s Annual Meeting in Davos.