Businesses must adapt to the new wave of so-called “digital disruption” sweeping the economic landscape or risk extinction.
This is the dire warning from senior Reserve Bank of Australia official, Sarv Girn, who warns that ignoring the pace of technological change is a sure pathway to dwindling profits and declining market share.
Mr Girn, the RBA’s chief information officer, says that all businesses must now embed digital innovation into their organisational structures and continue to innovate and advance already existing products.
In a speech to the Committee for Economic Development of Australia (CEDA) in Sydney this week, Mr Girn outlined the potential for digital technologies to create new opportunities in already existing markets.
He cited Domino’s Pizza’s use of Facebook ordering, order tracking and options allowing customers to create their own pizza as examples of a business making the most of disruptive digital technologies.
“It has redefined the way customers order, track and receive pizzas, achieving $2 million sales in 12 weeks on a new iPhone app launched in 2009,” he said.
Other prominent examples of industries being “disrupted” by technology include stockbroking following the rise of CommSec in the 1990s and the music industry following the revolution of iTunes in the 2000s.
Mr Girn says the phenomenon of “digital disruption” creates both winners and losers with those companies that ignore the winds of change ultimately losing out.
“The biggest risk of all however is to not do anything at all – ignoring the waves of digital disruption in business and society has led to extinction for many,” he said. “You only have to look at the likes of Nokia – which in spite of owning 30 per cent of the world’s mobile patents (GSM) finds itself struggling to stay relevant; Kodak invented the digital camera technology, but failed to capitalise on it.”
Mr Girn warns the pace of digital disruption is now ramping up, with technological innovation driving new platforms and innovation in existing industries on a scale not seen before. He pointed to the evolution of computer technologies, from PCs to the internet to new mobile platforms to the emergence of new wearable technologies as one obvious way in which industries were being continually re-forged or “disrupted”.
