New technologies such as AI, 5G, IoT and blockchain first adopted in consumer markets
Source: Elvina Yang
Several emerging technologies, such as artificial intelligence
, the Internet of Things
and Video Everywhere, are expected to fundamentally change and disrupt the business and industry world. The term "transformative technologies" has been used by IHS Markit to label these technologies.
"Disruptive by their very nature, transformative technologies change the status quo, with disruption often taking effect very rapidly,” said Josh Builta, Senior Principal Analyst, Transformative Technologies at IHS Markit.
According to the firm's Digital Orbit Key Influencer Survey, 56% of business leader respondents believed that transformative technologies will have a high-to-significant disruptive impact on their industry in the next three years, while only 4% said there will be little or no disruption.
Consumer market leads
The survey asked business leaders across the industries on how they see six transformative technologies, including 5G, Video Everywhere, IoT, Cloud & Virtualization, Blockchain and Artificial Intelligence, with five measuring variables. Variables on whether the new technologies can open new market opportunities, restructure business models, disrupt organizational structures, disruption economics and competitive dynamics.
The result shows that the consumer industry is expected to experience the greatest amount of disruption from transformative technologies. The consumer industry is listed at the top among; automotive, manufacturing, healthcare, telecommunications and the energy industry
because it has adopted most of the transformative technologies, said Builta.
50% of the current IoT installed base is in the consumer segment, if smartphones are counted; the consumer segment in Video Everywhere technology received US$500 billion in revenue in 2018; AI smart speakers have taken the highest volume applications to data with 39 million units shipped in 2018; and the consumer industry will be the first to adopt 5G technology.
"Product development is quicker and replacement cycles are shorter in the consumer segment, compared to the much longer times involved in the industrial sector because of its relatively conservative nature. Moreover, concerns related to privacy and liability are far less burdensome in the consumer arena than in the industrial space," said Jenalea Howell, director of transformative technologies at IHS Markit.
In the automotive and healthcare industries, for example, adopting a premature technology which subsequently fails could cause public health and safety concerns.
Furthermore, the healthcare sector is highly regulated so that companies are often required to fulfill the standards of international, federal, and local regulatory units. Liability concerns and regulatory compliance, very often, slow down the speed of adopting new technologies.
"While the consumer segment has been quicker than the industrial sector in adopting transformative technologies, the tide will start to change soon for some technologies," said Howell.
IHS Markit expects, for instance, the consumer market for IoT applications will be saturated by 2020 to 2030, while 17% of the compound annual growth rate (CAGR) for consumer devices during this period.
At the same time, IoT and other transformative technologies will start to be adopted in other segments like energy and manufacturing. During the same 10-year period, the CAGR for industrial-related devices will reach 25%.
Blockchain sees great potential
Blockchain is the least mature of the six transformative technologies listed by IHS Markit, however, it holds the power to change several industries profoundly, especially on those that require high data security and integrity.
In healthcare, for example, blockchain can create a common health information database accessible to doctors and healthcare providers regardless of the medical systems used; in the power and energy sector, blockchain can help reduce the chances of fraud in energy trading and process optimization.
Although financial leads in blockchain applications currently, IHS Markit believes that other industries will be the biggest drivers in the upcoming days. By 2030, the blockchain market will be worth around US$2 trillion.