Technology trends and disruptive innovation are key factors in today’s markets. The world is changing and innovation acts as a catalyst for growth and success. Businesses that fail to innovate are more likely to lose market share and suffer reduced productivity efficiency and profits or, in the worst-case scenario, business failure.
Kodak’s rise and fall is arguably one of the most famous examples, given that at its height it had 90% of the US film market1 before its core business was disrupted by digital photography, but the corporate landscape is littered with many more. Blockbuster was killed by the growth of online movie streaming and piracy; Nokia failed to innovate into the smartphone sphere; and Tower Records was extinguished by the growth of online retailing, music streaming and piracy.
Technology is changing so rapidly that these days even a company once considered to be the most innovative in its field can suddenly find itself destroyed by a competitor that can produce something cheaper or better, or that can improve the lives of consumers in a way a traditional, incumbent company failed to understand.
As these disruptors emerge and challenge traditional industries, and the pace of technology accelerates, even the most established companies must adapt to maintain a competitive edge.
Companies that can harness technology and innovation use it to give them significant competitive advantages, may enable them to earn better returns. This is key.
As technology leaves the world of computer software and hardware and floods into all other areas of the market, businesses that use it to drive competitive advantage, and in turn high returns, maybe winners.