The edge of disruption

Technology developments will provide tomorrow’s growth – but have implications

2 December 2020 Davey Jose, Thematic Analyst – Disruptive Technologies

    Coronavirus made 2020 a disruptive year, but it could be a tipping point in the adoption of digitalisation. Much changed: employees are working from home, students learning online, consumers buying more than ever on the internet while e-sports and virtual events provided entertainment and telemedicine offered health advice.

    And much of this change will persist when the pandemic is over. It could lead to the next phase of technology-led growth around remote access. Four key themes stand out – connectivity, automation, experiential and digital health – but while they may drive digital growth, their disruptive nature raises environmental, social and governance implications, including privacy, energy and labour issues.

    Not all technologies are at the same level of maturity and ready to disrupt at scale, even if they are at the edge of disruption. HSBC’s Disruption Framework classifies innovations into phases, including the ‘real applications’ phase, when a technology becomes adopted in trials or a small-scale before it is ready for full roll-out.

    Then as the innovation is scaled up, it starts to disrupt the way business is done – not only in intended ways but with unintended consequences. At this point, the technology is firmly in the ‘new normal’ phase.

    • Connectivity is the first of our key themes. Today’s economy is, arguably, powered by data, bandwidth and processing technologies yet only 30 per cent of software is currently in the cloud, leaving significant upside.

      New connectivity technologies like 5G and space-based internet can bring the other 50 per cent of the world online and into a growing economy, thus driving equality. And low-earth orbit satellites can make working from home easier in rural areas.

      However, the intended or unintended implications include a possible backlash – cloud wars – stemming from privacy and ultimate data-ownership issues, while environmental concerns include decarbonising the datacentre infrastructure and risks from the internet-of-things.

    • The next theme is automation, which is now driven by a combination of robotics, artificial intelligence and sensors that improve productivity. It is already well established in many supply chains to ensure faster delivery times, reduce costs and improve the customer experience.

      Drones, autonomous vehicles and 3D printing should make supply chains more resilient and localised. And with only 5 per cent of warehouses currently fully automated, automation has a role there and in digital factories, farms and commercial transport.

      However, the implications are that warehouses will be augmented with technology and there are cybersecurity impacts in automation. But drones might make last-mile delivery cheaper and distribution by automated vehicle may be faster, aided by hydrogen-powered heavy-goods vehicles. And while 3D manufacturing might reduce CO2 emissions in many industries, it could impact jobs, tax and trade flows.

    • Experiential events or transactions – whether music, newspapers, payments, social interaction and education – have moved from physical to digital with the transition very disruptive for businesses, including retailers.

      Future trends will likely focus on building interaction between retailers and consumers while shopping: expect to see greater personalisation driven by artificial intelligence technologies.

      But the next wave of virtualisation may involve experience itself, through virtual- or augmented-reality headsets, then glasses. But while this might impact business travel, property and entertainment venues, it might destroy the digital-screen market.

    • Digital health has lagged behind the other themes, but with the world aging, healthcare costs rising and a shortage of doctors, there is growing scope for telemedicine and other futuristic preventative-healthcare such as genomic medicine.

      But again there are implications. Could telemedicine leave parts of the population behind? Is all health automation good? Does bespoke medicine like genome sequencing raise questions of bias, privacy and discrimination? And what is the knock-on impact of enabling people to live longer?

    First published 23 November 2020.

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