Not every business can be disrupted

By on June 1, 2015

By Alastair Dryburgh Existing players rooted in the physical world are hard to disrupt through the use of new technology. What with Uber, Airbnb, Tesla and the

rest, it may seem as if every established business is being blindsided by a slick new upstart coming at it from leftfield. But how widespread is disruption? Try this exercise at home. Consider where you currently spend your money, and how much impact disruption has had or seems likely to have on that. Start with housing. What is striking is how little impact information technology has had. Whether you own or rent, you probably found your place via an estate agent. Now these people are intermediaries, who were supposed to have been disintermediated long ago. But there are more of them than ever. Next, consider food. You may very well order most of your groceries online, but the firms delivering them are the same as they always were. What about your car? The manufacturer has almost certainly been in business for 30 years or more. When will we see driverless cars? I predict that whoever makes the software, driverless vehicles will come from an existing manufacturer. And what about your job? The recruitment business is another of those industries that was supposed to be disintermediated out of existence. I asked one recruitment consultant if he worried about LinkedIn making him obsolete. “Not at all,” he replied. “LinkedIn is a good tool for me.” If you look below the surface of the disruption chatter you see some significant continuities. Some businesses – banking, insurance, music, publishing – are inherently weightless, in that they can be reduced to bits and bytes and so are susceptible to technological disruption. Other sectors are rooted in the physical world and are very hard to disrupt via technology, if only because the existing players are themselves very good at using it to maintain their positions.

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