5 ways technology will disrupt business

As I meet technology leaders in various parts of the world, it’s clear that a significant number of emerging technologies are gaining momentum on a global scale. With faster innovation cycles they have the potential to be the next market disruptors. To assess the coming wave of technology over the next three years, KPMG recently surveyed 768 technology business leaders – from technology-industry start-ups, mid-sized to large enterprises, venture capital firms and angel investors – to identify the emerging/disruptive technologies and barriers to the adoption of tech innovation. The key survey findings can be summarized as follows:

• Cloud and mobile continue to be major forces of technological change, with the convergence of these two powerhouses enabling innovation and new business models.
• A new wave of tech disruptors is here: big data, the internet of things and 3D printing are becoming more embedded in our tech-savvy world.
• Cybersecurity continues to challenge the progress of innovation. As emerging technologies change business models, it is critical to manage security issues proactively.
• Globalization is leading to accelerating change and a more diverse set of tech innovation and micro-innovations.
• Leaders across industries need to keep up with, and even outpace, existing and new competitors, to a much higher degree than in the past. Tech innovation creates an opportunity to drive incremental customer value and monetize new business models resulting from disruptive technologies.

Which emerging technologies are causing disruption?

The democratization of technology and knowledge enabled by social media, cloud and mobile are creating exponential opportunities for new technologies to be developed and adopted. In recent years, thanks to cloud and mobile, the cost of starting a technology business has been reduced and market-growth opportunities have increased.

The global survey findings indicate that 3-D printing, the internet of things and biotech/healthcare are in the portfolio of emerging technologies rising on cloud and mobile’s long tail of disruption. The findings also highlighted a steady rise of data and analytics (D&A), auto-tech and artificial intelligence.

The growth of these technologies is a result of several factors, ranging from macro-economic opportunities to local incentives and a growing global tech-innovation engine that is creating more rapid widespread disruption. The interplay of these technologies is enabling new business models and fuelling innovation in many industries.

Top industries projected to experience the greatest global transformation in the next three years as a result of emerging technologies

Industry

Global

  Technology

21%

  Consumer markets

12%

  Healthcare

11%

  Automotive/transportation

10%

  Manufacturing

10%

SOURCE: KPMG Technology Innovation Survey 2014

In the United States, after technology (25%), respondents cited healthcare (19%). In China, manufacturing (21%) was the industry cited most after technology (22%). In EMEA, the top three were technology (16%), followed by healthcare and energy (each at 12%).

In Silicon Valley we’ve seen a more proactive approach among multiple industries: they are collaborating more closely with the tech sector in the development of the next wave of industry innovation. Today, leaders from across industries need to keep abreast of multiple market forces, to a much higher degree than in the past. Ultimately it’s all about creating the roadmap to drive incremental value and monetize the new business models that result from disruptive technologies.

The internet of things (IoT)

The internet of things and its applications are a growing market, driven by a portfolio of technologies including mobile, D&A and cloud. As the IoT gains momentum in sensors, wearables, home automation and other applications, the sector’s emphasis is shifting from accessing information to understanding how to add business value. It does this by managing growing volumes of data more effectively and in ways that have not been feasible until now.

Greatest monetization opportunity for IoT

Vertical Application

Global   Retail/Intelligent shopping

20%

  Home automation

14%

  Social interaction

12%

  Surveillance/security

12%

  Telepresence/monitor and control distant objects

11%

  Sustainable environment/waste management

10%

  Wellness, continuous care/emergency response

10%

  Transportation safety/efficiency

7%

  Food safety

4%

SOURCE: KPMG Technology Innovation Survey 2014 

Digital currency

Another technology in the early stages of adoption is digital currencies. There is great debate about the feasibility of these currencies disrupting banking and payments. The responses in the KPMG survey varied greatly by region: 15% in the US, 21% in the Americas, 32% in Europe, the Middle East and Africa, 53% in Asia Pacific, 70% in China and 39% globally.

Asia Pacific has been an early adopter of mobile payments and e-commerce, and this region is likely to be more comfortable using digital currency. With its expanding consumer culture, China is a significant innovator in the payments sector, especially in e-commerce.

Barriers to commercialize tech innovation

Barriers

Global

  Security 27%   Technology complexity 22%   Customer adoption 21%   Risk management 18%   Government policies 16%   Privacy governance 15%   Funding/access to capital 15%

SOURCE: KPMG Technology Innovation Survey 2014 

For enterprises and governments, tackling security and transparency issues will remain paramount, even as next-generation cybersecurity solutions emerge to deal with this challenge.Tech companies, big and small, will continue to invest in the development and implementation of information-security and IT-risk management technologies, to manage security issues proactively. It will be interesting to watch how advances in security, driven by innovative thinking, will develop new infrastructures in a hyperconnected environment.

Technological complexity, created by the integration of legacy systems and the continued migration to cloud and mobile platforms, will continue to be a challenge. We expect more users to demand strategic direction and guidance from tech providers, across a broad range of areas.

Innovation will remain a critical differentiator for the tech sector, where Fortune 500 companies and start-ups are continually competing to drive the next generation of technologies. What is fascinating, in the tech-industry, is how high-stakes competition mixes with collaboration. For example, CEOs of mature tech companies and the next generation of start-up founders agree to mentor one another, to be better positioned to shape the future of the industry.

Author: Gary Matuszak, Global Chair, Technology, Media and Telecommunications at KPMG.

Image: A row of MakerBot Replicator 2 desktop 3D printers are seen at the GE Garage in Washington March 20, 2014. REUTERS/Gary Cameron