The digital economy is quickly becoming a fact of life for all of us. More than 2 billion people worldwide are walking around with sophisticated mobile devices in their pockets. Approximately 90% of the world’s data has been generated in the last two years alone. Social networks allow us to exchange ideas and rally support for change with greater ease, speed and reach.
In 2015 so far, companies have further embraced this new world by investing more than $1.7 trillion in initiatives and technology supporting the internet of things (IoT).
When you consider the proof, it’s no surprise that our personal and professional lives are undergoing a massive shift. But when it comes to the business world, the digital economy is much more than a shift – it’s about reinvention.
The digital economy is happening now
According to a recent Economic Intelligence Unit (EIU) study, nearly 60% of executives believe failure to adapt to hyper-connectivity is the biggest risk to their organisation. For those who do seize the promises of the digital economy, an overwhelming 86% view these efforts as a positive influence on their organisation. However, there continues to be some trepidation, with approximately one-third still fearing this new era, stating that the digital economy presents more threats than opportunities.
Where is your leadership team in terms of accepting the digital economy? Do you sense any risks in resisting it? Is it regarded as a positive shift, or are you part of the 33% that think the risks overshadow the advantages?
No matter your answer, the truth remains the same: the digital economy is real – and it’s happening whether you’re ready or not.
Reinventing your business
The digital economy is quickly redefining the culture in which we live and which companies operate. How do I know? I see it every day in my discussions with senior business leaders around the world. Here are three ways this new economy is changing the world now:
1. Your competitors are disrupting your businesses, not digital startups
Surprisingly, your biggest source of competitive pressure continues to be from the established competitors you’ve been dealing with for years. The EIU study reveals that 57% of executives feel “moderate” or “severe” pressure from an established competitor’s digital offerings. On the flip side, under half view digital startups as a threat.
2. Previously stagnant economies are blossoming
Mobile phones are proving their value throughout Africa. Mobile payment apps are helping people overcome the absence of an established banking system. Doctors and teachers are using text messaging to contact more people with limited communications. As the use of smartphones becomes more pervasive, better access to the internet will continue to change the entire economy.
According to the EIU study, Deloitte predicts that internet adoption across Africa, Latin America,and south and east Asia has the potential to increase GDP growth by 72% – leading to 140m new jobs. As a result, average incomes would rise by $600 () per head of household. Better yet, hundreds of millions of people can leave behind a past of extreme poverty, poor healthcare and limited education.
3. Those embracing hyper-connectivity are pressuring your industry to adapt
Think your industry is immune from the digital economy? Don’t be so sure. On the contrary, a wide range of industries are being inadvertently reshaped.
Consider automakers. By installing hundreds of sensors in their latest models, automotive companies are collecting information to improve everything from customer service to product design. However, its impact does not end with the service department at the dealership. Insurance providers leverage this data to monitor how well their customers drive and tailor policy pricing and coverage accordingly.
Even financial institutions are taking advantage of this information to determine whether a customer requesting a loan exhibits behaviours of a risky investment. The ancillary business use of data generated by automobiles is a microcosm of what’s possible when dealing with the digital economy.
What the digital economy means to your business
Companies that embrace hyper-connectivity to its fullest potential will succeed in this new economy. With the power of real-time computing, decision makers can gain real-time insights that help create sustainable competitive advantage. Business users can sift through every piece of data within their reach – no matter the volume, complexity and degree of access required.
However, to make these insights truly transformational, companies need a digital core that binds every piece of information to people, devices and business networks in real time. This form of reinvention simplifies business collaboration, allowing employees to accelerate and intensify business impacts as soon as decisions are reached. More importantly, they can access insights anywhere in real time and with a personalised and simple user experience that does not require a PhD in data science.
Some of the world’s leading enterprises have taken the leap. Others are just getting started. However, there are a significant number of companies sitting on the sidelines. Whatever your case may be, it’s time to reinvent your business model to stay ahead of the competition and get your customers’ attention.