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Disruptive Technologies DISRUPTIVE TECHNOLOGIES A Disruptive Technology is a technology or innovation, which is initially a combination of niche technologies or innovative ideas to create a high end product or service, typically such which the existing market does not expect; and when the technology becomes affordable and accessible, it eventually ends up disrupting the existing consumer market and creating a market of its own. DIAGRAM 1: Big Bang Market Adoption FIGURE 1: Different types of theories used to describe the market response to Disruptive Technologies. The Rogers’ theory explains this response in the form of a bell curve (grey), while the recent Big Bang theory explains it in the form of a shark fin curve (orange) • Sustaining Technologies are different from Disruptive Technologies in such that they only rely on evolutions and advancements in existing products, thus making firms compete against one another leveraging the improvements each firm can make in their product • In the nascent stage of a disruptive innovation, the market is largely exploratory and mostly led by smaller, innovation driven and entrepreneurial firms. Larger firms tend to stay away from disruptive innovations because either the margins are too tight for them; or their business structure is such that even willingly, they cannot enter the disruptive innovation market due to potential tradeoffs such as cannibalization • Every product market is dynamic and bound to encounter disruptions at some stage or the other. Disruptive innovations can even hurt successful, well managed companies that are responsive to their customers and have excellent R&D. Hence incumbent firms must constantly try to innovate and keep their products relevant in the market Source: KPMG, McKinsey & Company, Accenture THE NEED TO ACKNOWLEDGE DISRUPTIVE TECHNOLOGIES FIGURE 2: Expected Potential Impact of Selected Disruptive Technologies by 2016 • In today’s age, technological advancements, speedy internet, super computing and so on are shaping the course of our economies, in addition to enabling us to enjoy highly comfortable lives, with the knowledge of the world literally at our fingertips • We are today at the cusp of a probable technological revolution which might not only solve existing global problems, but could also transform the world as we see it and our lives as we live them • The world needs solutions to overcome a breadth of interconnected challenges, ranging from the economic to social issues, which could together result in an improvement in the quality of lives globally, if addressed properly • In such a dynamic environment, it could be potentially disastrous for individuals, companies, and even governments who refuse to embrace the emergence of the disruptive way of thinking, since many of these disruptive technologies possess the potential to trigger the solutions to our global problems • Innovators and investors, who recognize and attempt to seize the various opportunities in the development of disruptive technologies, stand to reap a first – mover advantage once these technologies manages to disrupt the existing market and capture the fancy of users around the world Major sectors which could be influenced by the Disruptive Technologies presented in this document include Manufacturing, Infrastructure, Energy, Healthcare, Education, Retail and Entertainment What follows is a list of 50 major Disruptive Technologies/ Innovations/ Products that currently exist in markets around the world; and have either caused disruptions in their corresponding sectors or are on the cusp of doing so Source: ‘Six Converging Technology Trends’, KPMG India and Nasscom, 2013 #1: 3D PRINTING Concept: 3D printing is basically an additive manufacturing process in which objects are built layer by layer rather than through moulding or subtractive techniques. This technology allows the user to build real objects from virtual 3D objects. This is done by ‘cutting’ the virtual object in 2D slices and printing the real object slice by slice. Industry Application Consumer markets •Certain consumer product categories are relatively easy to make using this technology Manufacturing (General) •Cost cutting through elimination of tooling costs, reduction in wasted material, and reduced handling costs Manufacturing (Mold's) •Shortening setup times, eliminating tooling errors and high efficient moulding process Current Stage: • 3D printing could generate an economic impact of USD 230 Billion to USD 550 Billion per year by 2025 • Major techniques include selective laser sintering, direct metal laser sintering, fused deposition modeling, stereo lithography and inkjet bio-printing • The biggest advantage of this technology is that it provides instant modeling to get an idea of the final product, which can cut costs and time significantly Source: McKinsey & Company, The Engineer Magazine #2: THE INTERNET OF THINGS Concept: The Internet of Things (IoT) is a concept of embedding every object or living being with sensors or actuators and generating their virtual representation on the internet. Identifying all objects in this unique manner can enable us to effectively track, monitor and even control them. Industry Application Manufacturing: • Identifying bottlenecks Current Stage: • Optimizing processes Healthcare: • Constant health monitoring • Has the potential to create economic impact of • Detecting counterfeit drugs USD 2.7 Trillion to USD 6.2 Trillion annually by Retail: • Keeping track of inventory levels 2025 • Product details • Currently around 8.7 Billion devices are Energy: • Smart Grid applications connected to internet and the number is Urban Development: • Traffic monitoring expected to touch 40 Billion by 2020 • Waste and Water management through smart meters and leak detection sensors • The major challenge is to make use of the flood Agriculture: • Soil sensors and Leaf sensors of the data that is provided by the sensors Source: McKinsey & Company, Cisco Systems, Cisco Internet Business Solutions Group #3: BIG DATA ANALYTICS Concept: Big Data means the data sets with sizes beyond capacities of commonly used software tools to capture, curate, manage, and process the data within a tolerable elapsed time. Big Data Analytics technology refers to storing and managing large chunk of data in a single location for analysis and evaluation at later stages. However, the term Big Data is quite variable in terms of data sizes ranging from few dozens terabytes to many petabytes of data in a single data set. Industry Application Retail • Improved marketing, merchandising, operations, supply chain and after sales service Current Stage: Healthcare •Real-time exploration and predictive • The global market of big data is expected to increase from USD 5.4 analytics of clinical data for R & D Billion in 2012 to USD 48 Billion till 2016 Telecom •Measure and analyze customer activities, customer churn, call handling at call centers • Clubbed with technologies like cloud computing, social media and mobile Finance Generate customer insight and reduce • internet; Big Data Analytics can offer fraudulent practices benefits to sectors like education, defense, aerospace, government services and several others Source: KPMG, International Journal of Internet Science, McKinsey & Company #4: CLOUD CO MPUTING Concept: Cloud computing means storing and accessing data and programs over the Internet instead of your computer's hard drive. Here cloud is simply the metaphor for internet. This technology can significantly reduce the need of the personal storage devices and hence can cut down user cost substantially. Industry Application Healthcare • Access and retrieve information stored in scattered systems in real time Telecom • Reduced cost in setting up infrastructure Retail • Data stored and accessed remotely for inventory reducing the time and cost Public Sector • Easy and fast access to data and applications remotely Information Technology • Cost cutting in infrastructure development as renting a cloud server is far cheaper than developing one Current Stage: • The total economic impact of cloud technology could be USD 1.7 Trillion to USD 6.2 Trillion annually by 2025 • Cloud technology is the cornerstone for some of the most promising disruptive technologies like mobile internet, automation of knowledge work, internet of things and big data • Some of the major research areas for this technology are network capacity, security of data and cultural resistance source: KPMG, McKinsey & Company #5: ADVANCED NANO-MATERIALS Concept: Any use or manipulation of materials at a scale of less than 100 nanometers (10-7 meters) can be termed as nanotechnology. Advanced nano-materials can be created by direct modification of molecular sized nano-particles using tools like atomic force microscopes, electron beam or laser lithography which are capable of dealing with nano-scale features. Industry Application Healthcare • Rapid, inexpensive electronic DNA sequencing Energy • Application in solar cells • For energy storage as supercapacitors Electronics • Integrated Circuits • Transparent conducting electrodes, which can be used as touchscreens; LCDs Current Stage: • For healthcare, which will be the most benefitted sector through this technology, advanced nano-materials could have a potential economic impact of USD 150 Billion to USD 500 Billion annually by 2025 • Graphene is the most promising advanced material. It is one sixth the weight of steel and 100 times stronger. The production of Graphene has been started, however at high cost and in limited quantities
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