Disruptive technologies: Advances that will transform life, business, and the global economy

In May of 2013 global management consulting firm McKinsey and Company published a white paper titled Disruptive technologies: Advances that will transform life, business, and the global economy. Technological advances on every front are billed as game changers but the paper claims that some have the potential to disrupt the status quo.

Going through each in detail, the paper outlines the 12 technologies McKinsey deems most disruptive, by outlining the technologies current uses, it’s potential applications and then analysing the possible range of economic impacts. A few examples are mobile internet, advanced robotics, energy storage, 3D printing and advanced oil and gas recovery and exploration. We have seen a number of the technologies discussed in the paper already causing significant changes to industry, decimating some while providing the environment for the birth of new businesses. In our opinion, one of the most important quotes in the paper is:

“Business leaders can’t wait until evolving technologies are having these effects to determine which developments are truly big things. They need to understand how the competitive advantages on which they have based strategy might erode or be enhanced a decade from now by emerging technologies – how technologies might bring them new customers or force them to defend their existing bases or inspire them to invest their new strategies.”

We believe a number of investments in the funds stand prepared to benefit from these changes yet we remain wary of the potential for established businesses to be side swiped by new technologies, especially where management refuses to invest in or explore the new technologies as they present themselves. Fairfax is the perfect example of a business which failed to understand and refused to adapt to shifting landscapes and consumer preferences as people abandoned traditional classifieds such as the Trading Post in favour of online classifieds such as Carsales.com.

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