A study by the Global Center for Digital Business Transformation “” an initiative between Cisco and the IMD business school “” says digital disruption could supplant 40 percent of incumbent firms within the next five years.
Cisco said Wednesday the researchers sought the outlook of 941 business leaders across 12 industries on the impact of digital disruption in reshaping markets and displacing incumbents.
“Every country, every city and every business will be required to become digital in order to thrive and survive in the new digital economy,” said Martin McPhee, senior vice president of Cisco’s consulting services arm.
The “Digital Vortex: How Digital Disruption is Redefining Industries” report says 75 percent of respondents see digitization as a progressive move for the business to bolster customer value and individual empowerment.
Forty-five percent of the executives do not view digital disruption as a board-level concern and 43 percent do not acknowledge or sufficiently address the potential risks.
Cisco said the technology products and services industry has the highest disruption potential in the next five years, followed by data-driven industries such as media and entertainment, retail, telecommunications and financial services.
“As industries move toward the center of the ‘Digital Vortex,’ physical components “” to the extent that they inhibit competitive advantage “” are shed,” said Michael Wade, director of the DBT Center and a professor of innovation and strategy at IMD.
“The most successful disruptors employ what we refer to as ‘combinatorial disruption,’ in which multiple sources of value “” cost, experience and platform “” are fused to create disruptive new business models and exponential gains.”