We have to be nimble and innovative and ready for ongoing disruption

| January 31, 2016

Today we launch our Disruption economy forum. Pradeep Khanna, CEO of Global Mindset, introduces the topic with an overview of what’s happening globally.

We are living in fascinating times when technology is reshaping the way we live and work. This transformation though is not uniform across the world. Different countries are in different stages of digitisation and globalisation. But disruption is happening all over, whether it be global or local.

In the US, the chatter is all about artificial intelligence, digital assistants, driverless cars, robots, drones, augmented and virtual reality, wearable technology, sharing economy and so on.

Just to look at drones – an estimated 400,000 drones were bought during 2015 Christmas shopping in the US. When the FAA (Federal Aviation Authority) introduced guidelines on 21 December 2015 for registering drones weighing between 0.55 and 55 pounds, 45,000 drones were registered in the first two days alone. The world’s first “droneport” is coming up in Boulder City, Nevada, about a 30-minute drive from Las Vegas in the US. Drone racing is the new sport.

On the other hand, only 3.2 billion people have internet access and the race is on to provide connectivity to the remaining 4.2 billion people. Google, Facebook and Microsoft are leading this charge. The unconnected 4.2 billion people have an advantage of not having any legacy infrastructure and so being able to leapfrog to the latest technology. So we are going to see some interesting cases of global and local disruptions as more and more people connect to the net.

The rideshare economy is a classic example of global disruption, with Uber now operating in over 60 countries and 300 cities worldwide. Uber is a continuously innovating company and is expanding into newer and newer areas. Just recently it announced a partnership for helicopter service. Now it is shaking up the food delivery business with the promise of delivering lunchtime meals within 10 minutes.

But Uber also has serious competitors in some countries. Didi Kuaidi, a local Chinese company, is much bigger than Uber in China.

Cash on Delivery (COD) is a classic case of local disruption. Cashless transactions and a good supply chain are pre-requisites of any e-commerce business – both of which are in the development phase in India. This is where local disruption happens. As significant retail business is done on cash basis in India, major e-commerce players like Amazon, Flipkart and Snapdeal offer COD facilities for online purchases. The result is an exploding e-commerce market estimated to be worth trillions of dollars in the years ahead.

So, what does it mean for Australia? While we have had a good innovation policy statement by Malcolm Turnbull, much more is required to create an innovation ecosystem including (but not limited to)

  • Having a global mindset
  • Closer collaboration between academia and industry
  • Developing a risk taking appetite including acceptance of failure
  • Promoting collaboration between the disrupted and the disruptor – a good example is GM investing $500m in Lyft (an Uber competitor in the US) and taking over Sidecar (an earlier competitor of Uber which closed down on 31 December 2015)

We will have occasional hiccups including investment peaks and troughs. It appears at the moment we are heading towards an investment trough with the debate being whether Silicon Valley is cooling down or about to crash – the debate being driven by very high startup valuations.

We will also have competition as we strive to be an innovative country. Singapore has an innovation supportive ecosystem. In January 2016, Narendra Modi has announced a Startup India initiative. There will be many more.

Buts it’s an innovation journey we are on and we have to persist. We have to be nimble and innovative all the time and be ready for ongoing disruption.