Summary
Technology Disruptions like block chain, 3D printing, VR etc will change business models but will also have a social impact. This blog looks at the changes in traditional business models by these “DISRUPTORS”.
The entire global business eco system is bracing up for the “Technology Disruptions” like 3D printing, block chain, virtual and augmented reality. These changes will be earth-shattering, like the impact of shale oil to the OPEC oil, and also completely change the business models globally. Products will be conceptualized, manufactured and delivered in a very different way as compared to in the traditional business models. Automation has already entrenched itself deeply with many human jobs being taken over by machines like in the banks. These disruptions will have major advantages in productivity but also probably have an adverse impact on the human social capital if not addressed to properly.
Technology disruptions has led to human and location agnostic manufacturing models...
Let’s take a firm say ABC Inc. which is in the business of manufacturing consumer goods. At present the operations are done by humans manning the machinery. In the future, artificial intelligence, robotics and automation will ensure a very minimal human intervention not only in the production space but also in allied activities like planning, procurement and supply chain processes. Advanced algorithms will ensure that nuances and changes as per market needs are captured without human filters.
The core activity of ABC Inc. – production operations – will be massively affected by advanced automation, robotics and 3D printing. Industrial robots are expected to take over from humans especially in extreme conditions like in nuclear plants, etc. Robots are like high efficiency and high productivity employees with no emotions – something which every boss would like to have. Imagine having an employee who doesn`t get fatigued out, doesn’t take leaves and works at same productivity all through the day and night!
3D printing is a major disruptor in the manufacturing process which has made the manufacturing place location agnostic. The 3D printing machines can print all types of intricate parts with high productivity and can use all types of material like metals, plastics, etc. due to which labour cost arbitrage across countries is wiped out. Thus, the manufacturing process can move anywhere and when combined with automation and robotics will change the complexion of manufacturing processes across industries.
Blockchain, big data and social media add to the disruptive forces …
Blockchain will massively change and disrupt the financial transactions. This disruption is so massive that traditional financial institutions and intermediaries like banks, credit card firms and payment channels, etc. will become redundant and will be forced to change its business models to survive. A block chain of a process created is so secure that the traditional security of financial institutions will not be required!
Marketing has been disrupted in a significant way by the social media which has ensured that firms can reach consumer directly. Online data analytics which collects and analyses consumer behavior has altered market research functions. Customer support too has been automated with repetitive functions like customer calls being taken over by automation.
HR function will have more interactions with machines rather than humans...
All human interactions are going to decrease with all the disruptions but what will the HR functions do when human count itself will be reduced? The HR department will have to deal with a different workplace which has both humans and machines and faced with not only human-human interactions but also human-machine interactions!
The major impact will be lesser number of workers….. Jobs!
Very soon, ABC Inc. will mostly have robots running their manufacturing operations using 3D printers and automated lines, machines taking care of procurement and supply chain and all systems manned by a central control room with very few humans! Sounds strange but it’s going to be true!
A World Bank report estimates that 62% of the jobs globally are under threat due to automation and disruptive technologies with the developing nations being affected the most. A situation, where a significant portion of the workforce will be without jobs and in many cases unemployable, will stare at many countries leading to profound implications on the social fabric of the society.
Countries like Switzerland are experimenting with concepts like “Universal Basic Income” for a basic minimum social security income for its citizens which is based on the presumption that the advanced level of revenues generated for the countries, due to these technology disruptions, will take care of the social costs as well. This may work in highly developed nations with aged populations but developing nations and countries with high population like India will find the going difficult.
A social backlash can derail implementation of the disruptive technologies
The technological changes sweeping the global businesses will no doubt change the way business is done in a very positive manner but the social impact will have to be managed else it will prove to be a disruption to the technology disruptions!
Public backlash against globalization brought a wave of nationalistic forces like Donald Trump`s election victory in USA, Brexit, etc. which are threatening to disrupt the global integration. The US government`s actions in pulling out of TPP, Paris Accord, etc. have created a havoc in the global arena but have struck a chord with the local people. Similarly, leaders like Marie Le Pen and Boris Johnson, despite being loathed by many people globally, have a popular base by playing on the people`s fear of being affected adversely by globalization and hence are popular. A similar backlash against technological changes can disrupt the technological changes.
Is there a way out ??
Gary Kasparov, the former world chess champion, has said that humans should not fear automation but rather work with the machines for higher productivity and output citing a personal example of playing chess with the IBM Deep Blue computer.
To do this, it would require a huge amount of skill set training and mindset change so that the new wave of working population can be deployed in other value-added and skilled jobs. Education systems will have to be aligned to build up workforces with skill sets to handle these changes. Firms will need to train people to handle the new workplaces.
Thus, disruptive technological changes will need to affect people positively else the social backlash can be disastrous and prove to be the “DISRUPTOR” to these “DISRUPTIONS”.
