The McKinsey Global Institute recently listed a dozen technologies with the potential to be so material as to disrupt the entire economy, over the next decade (see Disruptive Technologies: Advances that will transform life, business and the global economy):
1. Mobile internet
2. Automation of knowledge work
3. Internet of things
4. Cloud technology
5. Advanced robotics
6. Autonomous and near autonomous vehicles
7. Next-generation genomics (including synthetic biology)
8. Energy storage
9. 3D printing
10. Advanced materials
11. Advanced oil and gas exploration and discovery
12. Renewable energy.
If these developments really do have the potential to be economically disruptive, it follows that their impact on individual sectors (and businesses) could be colossal. Even on cursory reflection a number of them may have transformational impact on the travel sector (some of which we flagged up over a year ago).
Mobile Internet and cloud technology, combined with near universal connectivity, will mean that the tourist of the near future is going to be traveling with technology that knows where he is, can inspire him, entertain him and tell him all he needs to know. He’ll be accessing content that someone is providing, through channels that someone is curating.
Automation of knowledge work combined with demographic, generational advance may, amongst other things, be the final nail in the coffin for the high street travel agent. There are a number of reasons why structural decline in this segment has been slower than many expected, one of which is that the piece of wetware sitting in front of the viewdata screen turned out to be more important than online evangelists thought. OTA’s and the like have had to make some simplifying assumptions about why people have come to their site in the first place. Human travel agents are much better at diagnosing what problem the customer is trying to solve, within what constraints, and quickly suggesting flexible and inspiring (if not always objective or optimal) solutions. A smart OTA front end might conceivably provide an equivalent service to the maturing web kids. Why would they then travel to a shop to buy something they can’t even walk out with?
As next generation genomics potentially extends the travelling life of the wealthier global citizens, autonomous vehicles may have nuclear consequences for taxi drivers (and transfer reps) and revolutionise the car hire business. Meanwhile, advances in oil and gas exploration, and renewable technology, have complex consequences, but no one has yet developed a commercial aircraft that can fly on shale gas.
McKinsey conclude:
“Business leaders should keep their organizational strategies updated in the face of continually evolving technologies, ensure that their organizations continue to look ahead, and use technologies to improve internal performance. Disruptive technologies can change the game for businesses, creating entirely new products and services, as well as shifting pools of value between producers or from producers to consumers. Organizations will often need to use business-model innovations to capture some of that value. Leaders need to plan for a range of scenarios, abandoning assumptions about where competition and risk could come from, and not be afraid to look beyond long-established models. Organizations will also need to keep their employees’ skills up-to-date and balance the potential benefits of emerging technologies with the risks they sometimes pose.”
Well they would, wouldn’t they. But we concur.
4 thoughts on “Disrupting your travel plans”
Hello Chris,
Thanks for the article. Yes, there are indeed many disruptive technologies that may arise in the future. And I really the list you provide. I certainly concur with McKinsey that disruptive technologies, by their very nature, change how value is shared in an industry.
One of the toughest questions is: how do we know which disruptive technology will really turn the market upside down?
I guess the most important thing to keep in mind is that consumers will be trying to accomplish the same things tomorow as they are today. In other words, the jobs consumers will be trying to get done, will remain unchanged despite a change in our technological environment. Any technology that can help consumers make their life easier, that is any technology that can help consumers get their jobs done faster and better, will find its market. And they will indeed turn value sharing upside down.
Other technologies will remain inventions, more than innovations.
Thanks for the post!
Regards,
Guillaume Villon de Benveniste
TheInnovationAndStrategyBlog
Hello Chris,
I’m glad you flagged this report, Anne Niesen brought it to my attention and I’ve been looking at it over the last couple of weeks and McKinsey’s get some things right however they show a lack of understanding in some areas.
What the researchers seem to have done is rely on an analysis of existing data and wow the audience with a range of headline facts and figures rather than a genuine attempt to ask the ‘So What’ questions that drive independent original thinking.
For example, in their piece on energy storage they do seem to accept unquestioningly the development of battery technology based on price. They seem to have overlooked the trend for energy density storage and predict a brighter future for battery driven vehicles than would a more critical observer.
They are on firmer ground when talking about economic value. I agree with their view of oil prices to 2025 being in the range $50 to $150 per barrel, giving an average price of $100 per barrel going forward which matches our own analysis.
When one reads their analysis of advanced oil and gas discovery it does seem apparent that the future is more gas than oil. As you point out, no-one has yet developed an aircraft that can fly on shale gas. The reason for this is, if you built an aircraft that flew on compressed natural gas (200 times atmospheric pressure) it would be able to fly only 20% of the distance. This brings a new perspective on the term range anxiety.
Good blog post, keep them coming.
Adrian
Hi Chris,
Thanks for sharing this.
I think you’re right to flag up the disruptive nature of universal connectivity and the mobile internet.
Yes, this means that someone somewhere will be curating and publishing the content that everyone will be accessing.
The biggest challenge now, however, is not curating and publishing but dealing with the demand for live, interactive content.
During the power cut at the Super Bowl earlier this year, for example, Oreo’s social media team sent out a “You can still dunk in the dark” promotion and got 15,000 retweets and 20,000 Facebook likes within minutes (read the full story here http://www.wired.com/underwire/2013/02/oreo-twitter-super-bowl/).
That’s market disruption in action: moving from a carefully planned marketing schedule to a team of social media marketers watching for opportunities in real time and generating off-the-cuff content to exploit them.
Employ some Web Kids, quick!
Alun
Thank you for your very high quality input gentlemen.
@Gullaume
I like your distinction between invention and innovation, but I also wonder about the ‘needs’ I now have as a customer that I didn’t have (or didn’t know that I had) ten years ago. Does radical innovation give birth to new ‘needs’ ? (As an aside I’ve never really liked that word in the consumer context – as consumers we have lots of wants but very few real needs…)
@Adrian
I left the energy density point alone precisely because I knew you’d do a far better job than me in picking up on it, as in http://www.nixor.co.uk/index.php/blog…
@Alun,
Absolutely. Reminds me of something…
https://www.thestrategyexchange.co.uk/2012/04/the-near-future-of-experiential-travel/