Enterprises must have the courage to innovate, adapt to change, invest in human resources, and develop new business models if they are to survive the digital disruption of the 21st century, according to a technology expert.
If companies continue with a “business as usual” mindset, they won’t make it because they are now operating in a much different world, said Alexander Avanth, Director of Business Innovation at PTC Holdings, in a recent talk in Makati.
Avanth said companies have to develop new business models that highlight innovation and adaptability to continue growing in the Fourth Industrial Revolution (4IR). “We need to change the way we think in order to survive in the future,” he said.
He added that enterprises must understand that technology is accelerating at an exponential rate. Exponential acceleration is “the understanding that the acceleration of technology will never be slower than it is today,” or, conversely, that technology next year will be faster than it is today.
“We do not just get a faster smartphone next year, we also get faster artificial intelligence, faster Internet of Things infrastructure, faster 3D printing technology to disrupt manufacturing businesses”, he said.
And as technologies accelerate, they cross each other and new business models form, giving rise to media-streaming services or ride-hailing services, for example.
When this happens, Avanth said consumers’ value systems change as they welcome the capability to be able to watch shows in the safety of their home or get cabs without going down the street to hail them.
“But the consequence of these things is that all businesses face the paradigm shift. All businesses with their operational model based in even the second or third revolution, they cannot compete because this is a completely new value proposition for the consumer.”
Avanth stressed that with technology advancing so fast, taking a wait-and-see attitude before making a change could be too late. “So the question about innovation and disruption is not if you can afford it but if you can afford not to do it.”
“Connectivity is the key to the realm of the 21st century. Connectivity is what happens all around us and if you ignore it, it will still happen,” he said.
“Every company faces a critical point where they must change dramatically to rise to the next level of performance. If the company fails to seize that opportunity it will decline. The key is courage.”
Avanth said for change to happen, learning must be emphasized.
The impact of technology “has turned the half-life of a learned skill from 30 to five years. What you learned five years ago is irrelevant and what you learned 10 years ago is obsolete. How much of current businesses is still running on technology and learnings that we learned 10 years ago?” he said.
He said companies also need to invest in their people in terms of skills development. The skills predicted to be important in 2022 are those that promote innovation such as analytical and critical thinking as well as active learning.