The fourth industrial revolution – the ‘digital era’ – is set to change the pace of adaptation, in line with Moore’s Law, or result in companies being left out in the cold.
The exponential growth of the fourth industrial revolution and the rapid transitional momentum that is under way will have a ripple effect as the disrupted become disruptors, leaving no industry untouched, Deloitte Africa digital innovation leader Valter Adão argues.
Moore’s Law sets out the proposition that technology will double in power and halve in cost every 18 months, which “will have a big impact on us”, Adão says, adding that corporations will need to accept that linear growth paths are “off the table”.
The accelerated digital transformation also goes beyond analytics, mobile telephony, cloud, social content and the Web, with the fourth industrial revolution exponential disruptors ultimately driving the industrial revolution.
These include the Internet of Things, artificial intelligence, genomics, autonomous drones, three-dimensional printing, electric and connected cars, connected homes, cryptocurrencies, wearables, robotics and mobile payments.
“Industries are experiencing exceptional progression,” Adão comments.
The digital era is also dematerialised and demonetised, he points out, citing Uber, which has no taxi fleet, Amazon, with no bookstores, and AirBNB, without hotel chains, as well as innovations that provide a service free-of-charge to the consumer and source revenue elsewhere, through advertisements, access or information provision, besides others.
Further, the digital era is democratised, with the increasing leveraging of individuals’ inputs to build and influence other institutions’ potential success – this includes sites such as Trip Advisor, Kickstarter, Coursera or SunXchange.
For some industries, the consequences will be dire over the next five years. The retail, telecommunications and media sectors are among the first to be disrupted, along with the professional services and real estate sectors, besides others.
However, the more these industries are disrupted, the further out they venture into other industries to revive profitability and relevancy, which will lead to disruption in the coming years of the education, medical and health, transport, agriculture, utilities and government service sectors.
Linear solutions will not be effective in an exponential market, and agility is critical, notes Adão.
Companies are currently not gearing up properly to mitigate or leverage the impact, with innovation only happening when there is a problem, he says, suggesting that companies “Uber themselves before they get Kodaked”.