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The 5 Industries Ripe For Disruption

Which industries could soon be out-innovated?

27Jul

Industry disruption is now part and parcel of running a business in the 21st century. In addition to looking upwards and seeing where you want to go, you need to also be looking in every direction at everything that’s happening because the next Uber could appear from anywhere.

Companies who were untouchable just 15 years ago like Blockbuster, Kodak, and Yahoo! all found this out the hard way and have now been thrown in the bin marked ‘redundant’ thanks to new movers in their industries who have inspired consumers to ditch the old incumbents and opt for more modern agile options.

Disruption is not something that ebbs and flows though, it is something that is ever-present, and today the increased capabilities offered by faster and powerful technologies means this pace of change is only accelerating. So we decided to take a look at 5 industries that are ripe for disruption.

Transport

To some extent, transport is already midway through a major disruption thanks, mainly, to the success of cars like the Toyota Prius and Tesla. Where the key metric for a new car was speed, acceleration, and horse power. Today companies need to look at environmental friendliness, hybrids, and electric drivetrains. The level of disruption has been so great that Volvo, one of the world’s best-known car manufacturers, will cease making any pure fossil fuel cars by 2019 and the UK government recently announced that the country will ban all sales of fossil fuel cars by 2040.

However, this transfer from fossil fuels to electric is only the tip of the iceberg when it comes to the potential disruption that we will see in the industry in the coming decades.

The single biggest change is going to be the release of self-driving cars, something that is going to change almost everything in the industry beyond recognition. It will completely change how and why cars are made, the laws and restrictions placed on vehicles, their safety, and even the ages of those using them. Once the technology becomes prevalent it doesn’t matter the speed of the car because they won’t be able to go above the speed limit anyway, there will be no need to taxi drivers or even licenses to drive a car. It will change everything about the transport ecosystem so fundamentally that the focus of the cars will suddenly stop being on the driving experience and will instead become purely about the passenger experience. How traditional automobile companies make this transition is, as yet, unknown but one thing that is for certain is that the roads in 50 years time will look completely different to how they do today.

Pharmaceuticals

The pharmaceutical industry is prime for disruption because many still believe that the basic model they run on is ineffective in today's highly personalized world. Every single person in the world is different, from the color of their eyes, through to the size of their heart, or reactions to different medication. However, the way that pharmaceutical companies currently work is through a catch-all model that aims to make general solutions to widespread problems. Even with this mass-market creation in mind, there is still significant markups on almost every drug sold, often making them unaffordable for those who need it most.

These two fundamental issues with the current pharmaceutical industry model leaves it prime for disruption from smaller and more agile companies. There are so many areas of innovation, from the basic manufacturing process of drugs, through to data-driven trailing and modeling that it seems that only protectionist regulations have stopped this already happening.

We are in a world where antibiotics are becoming less effective and drugs are becoming more and more expensive, with the same drug in India sometimes costing thousands of percent more. For instance, Advair, an asthma inhaler, has a monthly price in the US of $309, whilst the exact same inhaler in India costs just $10 per month, making the US price 2990% more than in India. If this isn’t an industry that is ripe for disruption then I don’t know what is.

Cell Phones

With all of the huge jumps forward in cell phone technology over the past decade, including cell phone on the list may seem odd, after all there are some huge investments in 5G alone, with Philip Hammond, the UK chancellor committing £740m to developing it, for instance. The iPhone has also undoubtedly changed the world, with 2.32 billion smartphones around the world today, up from 1.57 in 2014.

However, there is very little real innovation in the area today, with nothing groundbreaking on the horizon. Instead the past 4 years have seen little more than iterative changes and small features added to what is essentially just the same devices. Think about the difference between an iPhone 5 and iPhone 7, the only meaningful difference is that the iPhone 7 has no headphone jack. Aside from that, you interact with the phone in the same way and the ‘gimmicks’ added have generally fallen by the wayside. For instance, according to Pymnts.com when it comes to using Apple Pay’19 out of 20 people who have the service don’t even bother.’

In the same way that nobody could envisage how the iPhone would work before they because popular, it is difficult to see what may disrupt this technology, but as most companies are now simply making iterative changes, it clear that cell phones are ripe for disruption.

Telecommunications

Net neutrality is a hot topic at present, with some of the world’s biggest companies rallying against dropping the proposal in the US. However, for most this is not the main issue for the majority of Americans, the issues are simply that a few companies have a monopoly over ISP services in most of the country. Half of American homes have a choice of only 2 ISPs which has naturally led to a huge increase in price as there is nobody undercutting them on price or service in most of these areas.

For instance, in New York people pay around $55 for a 25 megabit connection, which is nearly double the price of the same connection in London. For higher speeds most homes don’t even have a choice of two providers, meaning that there is no competition for those who provide super fast broadband. Given that the internet is now seen as a basic utility for most people, this is shocking and leaves current incumbents seriously at risk of disruption.

The American Customer Satisfaction Index actually puts cable and ISP providers in last place in terms of customer satisfaction, which is no surprise. If there is no alternative and people are forced to use their services, why would a company bother investing to change anything?

This is why, perhaps more than any other, the telecommunications industry in the US is not just ripe for disruption, but its customers are actively crying out for it, the question is who will have the guts to go up against the major corporations who control it?

News Media

‘Fake news’ is a term that has unfortunately become familiar to billions of people across the world, especially with Donald Trump’s penchant for the phrase. The idea that outlets like the New York Times and CNN are somehow ‘fake’ has been widely debunked, but the fact that people have been forced into more and more polarized and obscure sites to find their news shows that this is an industry ripe for disruption. Trust in the media today is poor, with just 20% believing the information they receive from mainstream press outlets.

There are also a huge number of news organizations currently facing financial difficulties due to the changing way that people consume their news. Print publications are having increasingly dwindling circulation numbers and thus decreased advertising revenues, digital advertising is beset by issues, not least the rise in ad blockers, and paywalls seem to be a poor alternative. This comes at a time when the press is under attack from governments, which essentially could not come at a worse time given the lack of resources to perform the role they need to in order to defend themselves.

It is an environment that lends itself to disruption, and many companies are attempting different alternatives, from the Guardian’s membership option through to Slate’s ‘Pledge Week’ which saw them including deliberately irritating ads which could be removed if people signed up for their membership package. However, these, and most other attempts from other outlets seem more like bandaids to try and fix a system that seems redundant in today’s digital society.

Many are looking around at models that work without destroying their brands. The Daily Mail, the world’s most read ‘news’ website are a prime example of a company maintaining profits through non-journalism to try and maintain themselves. Their site has even had its side bar referred to as ‘the sidebar of shame’ with smutty, sensationalist celebrity stories that damages the rest of their reporting for the sake of profit.

It is therefore a necessary industry that needs to be disrupted in a profitable way, but how this could be done seems to currently be unclear. 

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