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Exponential Advancement of Technology

IBM, Yahoo, Motorola, and Blackberry are few big companies that failed in past decades. It happened due to a lack of innovation and improper adaptation of technology in their products. Therefore, technology plays a significant role in uplifting businesses. But the major challenge of technology is its evolving nature. For example, in the history of telecommunication, the transition is seen from the discovery of the telegraph to radio, television, fax, telephone, mobile, and then the internet. These technologies grew exponentially like the human population, microorganisms, and compound interests. And this rapid change in technology impacts businesses extensively. The exponential growth of technology and its effect on business can be elucidated by three laws. Firstly, Moore's law states that every second year capacity of transistors in a microchip gets doubled. Thus, it doubles the processing power, speed, and efficiency of microchips exponentially. Microchips are used in smartphones, laptops, automotive, and other industries. It mandates businesses to renovate their products at least every 2nd year. And companies that are not following the order fail to succeed. Secondly, Butter's law states that every nine months passage of data in fiber optics cable doubles. Due to these cables, we encountered 2G, 3G, 4G, and recently 5G. In the upcoming years, 5G will work on almost every device, and updates in various businesses are mandatory. It might be challenging for businesses to get updated with exponentially growing technologies, but the companies that fail to do so would lag in the race. Lastly, Kryder's law says that data stored per centimeter in a hard drive doubles every 18 months exponentially. It leads to technological development and customer cost reduction through cheaper computers and internet connections. Therefore, industries should also update technologies and make their products cost-effective. And if changes are not made in a few years, the company would fall. Our mind is familiar with linear growth, and we miscalculate the results of exponentially growing technologies. Thus when a company grows linearly, and technology grows exponentially, a gap is created between products' actual value delivery and significance technology-wise. Various innovative startups attempt to fill these gaps using the latest technology to satisfy customer needs. But companies failing to fill the gaps would fall eventually.

Deconstruction of Business Model

The digital advancements have set a base for all existing and upcoming companies. Along with the technological evolution, we can see transformation in the business architecture as well. The industry architecture determines the structure, process, and business strategy of a company. A vertically assimilated flow that determines how the business is organized in an industry is a value chain. The industries often work through a chain of suppliers, producers, and distributors. They perform every single step at a time to convert raw material to a commercialized product. Deconstruction means the breaking down of complex structures into small subsystems to understand them in a better way. Multiple steps being fused in the value chain so that a company becomes a member of the elite with few other vertically assimilated competitors. Vertical assimilation was the best way to direct the flow of goods and information. The reason behind this is the high transaction costs of a company that needed a lot of resources and time to arrange its value chain, to collaborate with multiple suppliers, distributors, and above all, to figure out the best price or quality standards. Thus, the value chain with fewer transactions meant lower costs and a faster time to market the product. This deconstruction of the value chain aided players in each layer to resolve issues related to their specific functions. However, the success factor at the bottom was the scale, and at the top was an innovation. However, start-ups can either flourish or die without any impact on lower stacks. Therefore, the stacked architecture allows new business models to attack the work of reigning service providers. Thus, deconstruction is seen in many industries like the telecommunication and banking sectors. The technological unrest of the most recent 20 years has generally changed the manners in which organizations work with one another, their clients, their suppliers, and colleagues. How clients find a business’s goods and services are not, at this point limited by topography. While inspecting what technology influences the performance of explicit organizations, we need to consider the famous paradox called the Solow Computer Paradox. New advancements in the fields of artificial intelligence or mechanical technology are getting significant consideration from organizations, as they guarantee shocking increases in proficiency measures—starting a flood of corporate interests in digital technologies. However, firms didn't get as profitable as labor productivity development in different industrial countries as of late. The way the selection of innovative technologies isn't joined by productivity increments has effectively been seen during the beginning of the computer age and became known as Solow's Paradox. For a better understanding, we can split our analysis into theoretical and empirical segments. We should take a look at various and significant attempts to address Solow's paradox. The First attempt says that technology had a helpful effect, just not economic productivity and GDP which is a narrow measure. The second attempt observes that maybe it emphatically affected GDP, however, it will just show after quite a while. Lastly, the third one says increased complexity in organizations can counterbalance the positive effect of technology on productivity measures. Additionally, there are sure empirical shreds of evidence that reveal “ digital technology creates value”. Firstly, there is a positive connection between technology investment and gross margins. Secondly, digital leaders outflank digital slowpokes in customer loyalty and revenue growth. In a nutshell, Although we don't really find efficiency numbers, digital technology does affect business performance. In spite of the apparent paradox at the macro level, making the correct technology investment quantifiably affects both revenue growth and productivity.

Understanding Disruption

The term disruption is the base of digital transformation. Digital transformation has the potential to interrupt numerous markets and industries. In the 1930s, Joseph Schumpeter referred to the gales of creative destruction. He was interested in the disruption potential of markets. In particular, he saw this disruption as a hallmark of the market economies. But disruption doesn't mean to be about changes in technology. So, disruption shouldn't be feared, rather it should be embraced as a good approach towards change, an opportunity for bringing new ideas into existing technology. We can understand the term disruption with the help of an example; The Sony Walkman came out just by utilizing the existing technology that existed in different types of cassette players and the like. But they redefined the form by shrinking it and then making it a portable player that one could wear on their side while walking around. So, while the underlying technology didn't change, the way how they organized and its value proportion also didn't change very much. It was the invention of an important aspect of technology that would change how the world works completely. In the late 1950s, the invention of the microchip and micro conductor is still used today. In the 1970s home computers and data entry were very much into existence. By the 2000s the internet and mobile phones were omnipresent all over the world. Digital Transformation is a vigorously discussed theme these days, but this was also valid in the 1990s and then in the middle of the 2000s. With the beginning of the World Wide Web (W3), the scope, distinction, ranking, momentum, and findings of digitalization virtually changed, prevailing in a high burden on the societal transformation method. Corporations containing Dell were soon to take the privilege of the World Wide Web from 1996 to 1997. They were disorganizing basic PC manufacturing corporations like International Business Machines (IBM) by trading directly to customers rather than through the trader systems or hobby marts, and important ideas into customer behavior as they guided the website. In the year 2000, digitalization proceeded to be utilized more widely as a theory and debate for an all-around governmental preface of IT, an enhanced procedure of the internet, and IT in all phases. A parallel growth began in the common industry environment to raise awareness considering the matter and relief. For example, in the European Union (EU), an enterprise named the Digital Single Market was cultivated with direction for nationwide digital policies. It must consciously and firmly participate in the future societal transformation, with new growth of societies, structures and to build a purpose for e-governance and communication community. Hence, the discussion enclosing digitalization earned improved reasonable significance for politics, industry, and sociable problems. It connects political work matters for the society growth, fresh modifications in the logical industry approach, productive chances for organizations in functional and industry procedure growth, with the outcome on inner and outer efficiency of IT to name a rare. When we talk about Business model disruption, Zipcar is an example of redefining a business model. Now, rather than a traditional rental car model where one had to go to the rental car agency to rent a car, they proposed a world in which no one can use a car for a couple of hours only by putting a code and entering a car while walking on the street. There are some high-end disruptions like the iPhone came with a different set of features but the same base at a high end of the market. When we think about low-end disruption, Wikipedia is one of the foremost examples. It takes over large parts of the Encyclopedia market. Wikipedia is arguably not of the quality of an Encyclopedia Britannica, but its new model of using crowdsourced information allowed it to have a free entry for usage by individuals. Also, there are some new market disruptions such as the Word Processor disrupting the whole typewriter industry. The automobile is redefining the transportation industry on a large scale. Similarly, smartphones are redefining sets of different industries including cameras, music, maps, and the like. Therefore, disruption is said to be a part of the value chain that ends up impacting a whole industry in another part of the value chain.

The Competitive Life Cycle

Disruption and transformation of industries for digital adaptation led to the rise of the competitive life cycle. S curve of the competitive life cycle illustrates the profit and sales of the industry by analyzing the environment associated with it. The most questionable part of the competitive life cycle is margin or profit which comes along with various factors. On the early edges, the margin might be negative or negligible but as the industry starts to grow margin increases. And as margin increases, lots of competitors again enter which leads to compressed margin. From the Industrial Revolution of the 18th century to now, automobile and communication technology manufacturers and others faced revenue variants. For example, earlier we had portable CD players, which were, later on, replaced by iPod and then finally by smartphone. So, one after other industries of CD player and iPod faced shakeouts and kept on evolving as per market demand following the S curve. Hence, the competitive life cycle moves around with a common footprint among industries and is useful in interpreting the essence of digital transformation. Innovation cannot be suppressed as most of the time is incessantly spent on research and development. When a new product or industry is launched, people look for a dominant design that has not been established in the market yet. Thus, we can see fierce competition between several players in the industry. Some entrepreneurial industries flourish with profits as soon as they step into the business. Let’s take the automobile sector as an example, especially 100 years ago when it was first evolved from the fragments of the carriage industry. With the emergence of the automobile industry, hundreds of players started competing in the industry. In the US, the Studebaker brothers were the most successful manufacturers of horse-drawn carriages. They further saw transition and jumped into the automobile industry when others like the bicycle industry came into existence. Eventually, different drive trains were launched in the industry, using steam power engines, kerosene-powered engines, and gasoline internal combustion engines. All contended to become a dominant technology in the industry. This is where innovation shifted towards experimentation. It is not necessary that the best technology or the initial entrant of the new technology may guarantee long-term success. There are a lot of other factors that determine the dominance of one technology over another. During the late 1930s or 1940s, electric vehicles were in use across different cities throughout the world. The industry saw even more efficiency of production with the outset of big giants like Ford, General Motors, and Chrysler. Such big companies strategize to acquire other ventures of the industry, with more efficiency and dominance. Studebaker brothers were initially good and made history, but it has now gone away. The industry is currently driven by another disruption of exploring electric vehicles and autonomous vehicles. Tesla, Volvo, and General Motors are some companies that are working on the production of new-generation vehicles. Therefore, the market matures after reaching a dominant design that sows seeds for future disruption.

Incumbency and Innovation

Digital transformation can possibly disrupt various business sectors and enterprises. Disruption implies conventional wellsprings of competitive advantage are substantially fading. One of the domain’s old competitive advantages that are in danger is the economies of scale. Another territory that was a competitive advantage is learning curves. Given that the customary wellsprings of the competitive advantage are getting delicate, organizations struggle to craft their systems in such new conditions. Innovation or technological change has a high disruptive potential. In many cases, technology neglects to overwhelm the old, however, at times, it does. Let's start with why incumbent firms fail when confronted with these disturbances. Innovation renders existing abilities useless, either technologically, authoritatively, or market-wise. The older established firms can fundamentally be more awful than new participants in the business. Incumbent firms may neglect to see the worth of the new advancements. To add on, a few firms basically select not to change. They stress over cannibalizing their own items. This generally winds up with the organization, in the long run, escaping business. Now, let us take a gander at the reasons why some incumbent firms succeed then? In the first place, innovation requires broad capital and expertise, in different terms, it could require R&D, which just an enormous incumbent firm with assets can deal with. Also, incumbent firms may use some sort of integral resource or the ability for their potential benefit. For BMW, for example, it very well may be their assembling capacities that will permit them to endure and flourish in a universe of self-sufficient and electrical vehicles. Finally, a few organizations simply can conform to changing business conditions, this is the thing that we allude to as a unique ability. Likely, a prototypical illustration of this in the new years has been Apple. To finish up, business pioneers need to for all time pick the blend of approaches for their businesses’ needs and run them at the same time. In economics, it is widely accepted that technology accelerates economic growth. It allows for more efficiency in the system, upon which prosperity depends. As computing power improves dramatically and more and more people around the world participate in the economy, we should think carefully on how to devise the policies that allow us to exploit the digital transformation. In extremely remarkable minor years, digital transformation has prompted every element of our existence. Most notably, technical progress and invention have had a significant consequence on our economy, remaking the cover of manufacturing, production, the supply chain, and more. Generally, manufacturing and harvest change at the notion of customer command. Customers are always gazing for something good, sooner, and unique. Customers now expect commodities that are bound, responsive, and generous, a lot more reasonable than they are. The growth of reasonable commodities means we can trace our exercise patterns and how much we consume, discover the explanation to nearly anything on the internet within instants, and just put the container on before we open our front doors. Supply chain industrialization is modifying the connection between customers and corporations at a document velocity. Radio Frequency Identification (RFID), used to designate and following entities, is often commonly perceived and nurtured to make the supply chain of miscellaneous corporations more productive. The global organization uses RFID brands to assure immediate and precise deliveries of food, clothes, and blossoms. By investigating the supply chain, the inclusive entity to the buying protocol is intense, logical, and further accurate, enlarging consumer duties and prevalent client hardships.

Digital Drifts

The world is progressing faster than ever. In the last few decades, digital transformation is at its peak in adding an ample amount of digital data across the value chain. Let's take factory equipment as an example. Nowadays, factories are equipped with sensors to track the performance of machinery accessibility during the manufacturing process. In this way, digital technologies bring about a prodigious industrial and technological transformation that influences our lives in unanticipated ways. The world's stock of information is continuously growing and making ways for new digital technologies and services. Big data, the Internet of Things (IoT), mobility, cloud service, social media, and blockchain are some evident examples. These digital technologies help in driving industries to another level of digital customer engagement and IT-enabled business services. In recent years, Big Data has become a penetrative idea of the technological world. Big data can be defined as a collection of huge size data that grows exponentially with time. Roger Mougalas from O'Reilly Media discovered the term "Big Data" for the first time in 2005. Afterward, in the year 2006, they coined the term Web 2.0. Thus, Big data is a field that provides sources to extract information from complex data sets, which consists of big data. The different aspects of big data evaluate challenges like capturing data, data storage, data analysis, search, sharing, transfer, visualization, updating, and information privacy. Nowadays, big data cannot be stored or processed by traditional data management tools due to its complexity and larger size. Take, for example, Facebook can generate 500+ terabytes of new data ingested in the database of social media sites every day. A database of 10+ terabytes of data can be generated by a single jet engine in just 30 minutes of flight time. Also, the big data reaches Petabytes (10¹5 bytes) with thousands of flights per day. Some of the industries using big data applications are banking and securities, healthcare providers, insurance, transportation, retail and wholesale trade, media and entertainment, etc. Moreover, volume, variety, and velocity are the three main characteristics of big data. Volume:- Big data majorly depends upon the size of the data. The volume of data is a prominent factor to find whether data can be considered as big data or not. Velocity:- This term refers to the lightning speed of data at which big data is generated, processed, and analyzed. Variety:- The heterogeneous sources from which data is collected in the form of text, video, images, audio, etc. It also determines the nature of data, both structured and unstructured. Let's take an example of an analog and digital database to understand the better use of big data. In the 90s, an estimate of 95 percent of information was stored in analog format, only 5 percent of the stored information was digital. In the next century, a whole of 25 percent of the stored information data was digital at 55 exabytes (55×10¹8). By 2003, both digital and analog data equally accounted for 50 percent each. In 2007, 94% of the storage information of the world was digital at around 300 exabytes. An IDC and Seagate White paper forecasted that we will reach 40 zettabytes (40×10²¹) in stored digital information by the beginning of 2021. The business value of Big data:- Organizations and Industries are picking up strength by improving their data analytics efficiency. However, the ability to access the data from search engines and social sites enables organizations to utilize their outside intelligence for business strategies and also for transparent customer engagement. It also tends to bring enormous growth to existing businesses to the industries revolutions. Big data processing technologies are valuable for replacing old and traditional customer feedback systems. Big data can be presented in zettabytes (a unit of data information, 10²¹ bytes is equal to 1 zettabyte) of unstructured and fast-moving data that can be traced or analyzed to generate business values. Thus, it is a source of a long-lasting competitive advantage. Furthermore, we can take a look at the three different types of big data. The first is structured data, which can be accessed, stored, and processed in the form of a fixed format. An Employee table database is an example of Structured data. The Second is unstructured data, where the data is stored or processed in an unknown and unstructured form. However, a heterogeneous data source containing a combination of simple text, images, videos, etc, is also a type of unstructured big data. The third is semi-structured big data, both Structured and Unstructured data come under semi-structured data. XML file data is an example of Semi-structured data. However, it can be found in structured form yet undefined. The big data industry is presently worth $189 Billion and is predicted to proceed with further growth and reach $247 Billion by 2022. Some of the big data trends of 2020 are:- Investment in Big Data Analytics Multi-cloud and Hybrid are Setting Deep Roots Machine Learning will continue to be in Focus Actionable Data will Grow Continuous Intelligence In-Memory Computing Therefore, the digital revolution is considered a disruptive innovation in the field of technology advancement. All these digital trends have attracted particular attention from society and private defense stakeholders. Right from pharmaceutical to agriculture, technology disruption is a key ingredient of digital revolutionary trends in business that has the potential to change business practices, it’s processing, and services. Products like wearable technology or fashion technology, sensors enabling technology, or advanced technology such as the internet of things, artificial intelligence, systems as well as logistics technologies, robotics, computer simulation, nanotechnologies or neuroscience, etc., illustrate the impact of digital drift in almost every industry.

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