The democratization of technology and knowledge enabled by cloud, mobile, and social are creating exponential opportunities for new technologies to be developed and adopted.
The findings of a global survey performed by KPMG indicate that the Internet of Things (IoT), 3-D printing, and biotech/ healthcare are in the portfolio of emerging technologies rising on Cloud and mobile’s long tail of disruption. The findings also highlighted the steady rise of data and analytics (D&A), auto-tech, and artificial intelligence.
There is now a clear trend showing the rise of this portfolio of technologies as a result of several factors, ranging from macroeconomic opportunities to local incentives and a growing global tech innovation engine that is creating more rapid widespread disruption. The interplay of these technologies is enabling new business models and fuelling innovation in many industries.
An (un)expected Trio
Three-D printing, the Internet of Things (IoT), and biotech/ healthcare IT will jump into the top five disruptive technologies over the next three years, according to the 2014 KPMG Global Technology Innovation survey.
The trio is among an incremental number of technologies that are gaining momentum, disrupting industries, and enabling new business models. Three-D printing, IoT, and biotech/ healthcare IT were each selected by more than twice as many respondents as last year to move up the survey’s list of disruptive technologies. The global findings also highlighted the continuing impact of Cloud and Mobile, and the steady rise of data and analytics, autotech, and artificial intelligence. These disruptive technologies are expected to transform enterprises and enable indispensable consumer technologies. “The Internet of Things and M2M technologies are on the rise these days, but as any other new technology, they come with a bag full of benefits and challenges”, says Gheorghe Vlad, Senior Manager in KPMG in Romania’s IT Advisory department. “Among the benefits that can be easily spotted there is an increased efficiency from connected home technologies, easier access to personalized real-time information as well as increased personal productivity” he continues.
[Note: M2M refers to technologies that allow both wireless and wired systems to communicate with other devices of the same type]
“The rapid rise of this portfolio of technologies is driven by several factors, ranging from macroeconomic opportunities to local incentives and a growing global tech innovation engine that is creating more rapid widespread disruption. The interplay of these emerging technologies is enabling new business models and fuelling innovation in many industries,” explains Mihai Rada, Director of KPMG in Romania’s Technology, Media and Telecommunications practice. “Leaders across industries, need to nail the right strategy to outpace existing and new competitors to a much higher degree than in the past. Tech innovation creates an opportunity to drive incremental customer value and monetize new business models resulting from disruptive technologies.”
Monetizing the Internet of Things
The Internet of Things and its applications are one example of a mobile-driven growth opportunity. In the KPMG study, technology business leaders globally believed that retail/ intelligent shopping (20 percent) has the greatest potential to generate revenue as a result of adoption of the Internet of Things, followed by home automation (14 percent), and surveillance/security and social interaction (both at 12 percent). “This is all good” comments Mihai Rada, “but let’s not forget that these opportunities for growth come with a pack of new challenges, such as customer adoption, technology complexity or ability to measure the return on investment that we must take into consideration when planning for change”.
Given retail’s revenue potential based on the Internet of Things, it follows that in the technology innovation study consumer markets was among the top five industries globally projected to experience the greatest transformation in the next three years as a result of emerging technologies. The five were technology (21 percent), consumer markets (12 percent), healthcare (11 percent) and automotive/transportation and manufacturing (tied at 10 percent). The survey responses on this topic were slightly different in Europe, the Middle East, and Africa (EMEA) compared to the global responses and views in other regions: the top four were technology (16 percent), followed by healthcare and energy (each at 12 percent), and aerospace and defence next (11 percent).
Digital currency (i.e. Bitcoin/ Blockchain, etc.) is one of the emerging technologies that may impact a sector or an industry and whether they are adopted widely as payment in the next few years depends on the country or region. The percentage of respondents by region or country that said it is likely that digital currencies will disrupt banking and payments in the next three years shows a significant difference between various regions of the world: while in the US only 15 percent of the respondents thought this, a much larger population in Asia Pacific and China are convinced that digital currency will strongly impact the payment industry (53 percent in the Asia Pacific area and a huge 70 percent in China). Europe and Middle East were situated in the middle, with 32 percent of respondents considering that disruptive new currencies such as Bitcoin/ Blockchain will seriously impact the payment industry.
“The Asia and Pacific region generally has been an early adopter of mobile payments and e-commerce and may be more comfortable using digital currency,” considers Mihai Rada. “China is one of the innovators in the payments sector especially in e-commerce. With the massive rise of the consumer in China, there are significant innovations taking place” he continues. “On the other side we can see highly regulated markets, such as the US and Europe that are more reluctant to change when it comes to the banking and payment industry”, he concludes.
Challenges to tech innovation
The KPMG technology innovation survey also captured the biggest challenges to innovation and commercialization. When asked which factors will limit/constrain innovation, more than one third (34 percent) of tech business leaders globally mentioned restrictive regulatory policies, while 29 percent cited consumer fatigue/ pullback, and 27 percent said ability to demonstrate ROI. The order was similar by region, except in EMEA, where the ability to demonstrate ROI came second after restrictive regulatory policies.
Survey respondents globally said the top barriers to commercialize technology innovation were security (27 percent), technology complexity (22 percent) and customer adoption (21 percent). Most EMEA tech business leaders selected customer adoption as the top barrier, followed by funding/access to capital and technology complexity.
“For enterprises and governments, tackling security and transparency issues will remain a priority even as next-gen cybersecurity solutions emerge to deal with this challenge. Tech companies, big and small, will continue to invest in the development and implementation of Information Security and IT risk management technologies to manage security issues proactively,” said Gheorghe Vlad.