A recent report by Bank of America Merrill Lynch sheds more light on our future focus. The authors see cyclical and secular trends transforming the world at a rapid and meaningful pace. They find a common denominator in the form of three Ecosystems of Creative Disruption, and see them reducing barriers to entry for new businesses. These ecosystems allow companies to improve productivity and time-to-market while allowing broader customer reach. In a big shift, the ecosystems redefine competitive advantage by leveling the playing field between large and small companies. Success is therefore dictated by imagination and ability to maximize the ecosystem. The three ecosystems are:
The Internet-of-Things (IoT) is expected to be a $7 trillion industry by 2020, as the explosion in connected devices is laying the foundation for IoT disruption. As a result, the authors estimate that connected devices will double in the next three years to reach 20 billion by 2018.
The Sharing Economy presents a market opportunity of over $450 billion. The authors believe that due to the ease of smartphone use, the Sharing Economy likely will capture a larger piece of the combined $400 billion spending on hotel, car rental, taxi, luxury goods, self-storage, and parking and transportation services each year in the US. The authors segmented the sharing economy into the following four large groups: room sharing, ride and auto sharing, property sharing, and asset sharing.
On-Line Services is potentially a $500 billion industry, and social networking is primed to drive services beyond on-line eCommerce. The information dissemination aspect of social networking has allowed this medium to rapidly gain trust among users, which is a key aspect of getting people to change their behavior. This nuance is sometimes lost when we consider the pace of disruption. Technology has enabled a change in behaviors, which in turn as accelerated adoption of disruptive innovation.
Here is a very good visual that describes these ecosystems.
The report also explores the impact of creative disruption on markets, the earth, people, government, and innovation. A very good report that provides more input into our analysis of future scenarios