- PwC report shows 80% of Australian CEOs think organisations are likely to compete in new sectors over the next three years
- The technology sector was identified as being ‘most likely’ for emerging competition
- Almost one in five Australian businesses are looking to move into the technology space
According to PwC’s CEO Survey, technology is creating levels of disruption never seen before. Competition is no longer safely contained within the boundaries of a business’ industry – serious contenders are swooping in from all angles.
There’s no shortage of high profile examples. Amazon started out as a bookseller; it moved on to become the world’s first public cloud provider, with 1.4 million servers muscling in on what looked like the territory of HP, IBM and Microsoft. Google’s dawn as a search engine seems a mere memory as we watch it unveil mobile phones, wearable devices and driverless cars (the likes of which could be seen in Australia fairly soon). And what about taxi companies and hoteliers? Did they ever imagine apps like Uber and Airbnb would be their biggest threat?
Australian CEOs are well aware of this phenomenon. PwC’s Annual Global CEO Survey, A marketplace without boundaries? Responding to disruption reveals that Australian leaders – much more so than their major international counterparts – believe that organisations will increasingly compete outside their own sectors within three years. A mighty 80% considered this possibility to be very or quite likely. Japan’s business leaders are almost in agreement, with 69% of survey respondents saying the same; while just 36% of CEOs canvassed in China thought disruption from outside the industry a likely proposition.
Digital disruptors lead cross-industry pollination
Technology is what Australians are watching closely, with 45% of our surveyed CEOs (compared to 32% globally) flagging this as the prime industry – outside their own – from which a significant competitor has or could emerge. This trails ahead of financial services, which sits on the second rung with 29% of respondents viewing it as the potential space from which to uncover rivals.
The Australian market has become acutely aware of digital disruption over the last two to three years, with many examples of technology companies moving into new industries and disrupting them. We are already seeing the banks take digital payments seriously, retailers move to a connected retail business model, governments determining how to deliver a single view of the citizen through self-service and the health industry adopt a technology enabled patient care model.
Given its geographic location, the Australian market’s traditional high barriers to entry have been swept away by digital technologies, allowing international organisations to enter without physically being here. The demographics and maturity of the population are an attractive prospect to international businesses wanting to expand for growth, increasing the competition further within a relatively small arena.
But where disruption enables threat, it also facilitates opportunity – 18% of Australian CEOs said they had already moved their organisation into the technology industry or were considering doing so within the next three years. Access to new emerging technologies and the ability to strengthen innovative capabilities were also the survey’s most cited reasons for them to form joint ventures, strategic alliances or perform informal collaborations.
Keeping an eye on the competition requires extra depth of vision, considering that your biggest rivals may not even be in existence… yet. The average lifespan of a company in the 1920s was 67 years, but by 2012 this had narrowed to just 15 years, proving that the marketplace is turning over faster than ever. And while it used to take months or even years to get a business going, technology has enabled startups to hit the ground running at astonishing speed.