Does industry collision shatter or shape our future thinking?

By

Bryan Pearce

Former EY Global Entrepreneurship and Start-ups Leader

Helping entrepreneurs add value to businesses, connect with each other and make the world a better place. Passionate about traveling and building lasting relationships with people around the world.

7 minute read 7 Aug 2018
Related topics Entrepreneurship Growth

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The world is changing faster than anyone can imagine. Collaboration across sectors will be key to solving complex challenges.

Industry convergence is rapidly changing how we do business, in both somewhat predictable and yet completely unexpected ways. Telecommunications companies are entering the banking sector, automotive manufacturers are moving into energy with electric vehicles, and sports companies are looking at health care insurance — just to name a few.

At the EY World Entrepreneur Of The Year™ 2018 Forum, prominent CEOs, EY sector thought leaders, EY Entrepreneur Of The Year™ alumni from around the world and attendees from a variety of industries grappled with our new disruptive reality in panel discussions and sessions that explored possible futures.

“We are only constrained by our imagination,” said Rohan Malik, EY Global Industry Strategic Growth Leader and EY Global Government and Public Sector Emerging Markets Leader. “Boundaries as we know them today are blurring,” he added, noting that 75% of companies will soon face competition from outside their sector — if they haven’t already.

At the Forum, much of the discussion centered on urbanization, health care and changing consumer behaviors. Entrepreneurs weighed in on which industries and sectors were most likely to wring value from convergence, proposing potential business models that could thrive in the world of tomorrow.

EY World Entrepreneur Of The Year 

Highlights from the EY World Entrepreneur Of The Year 2018 Forum 

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Entrepreneurs, including EY Entrepreneur Of The Year™ alumni, gather in highly interactive convergence sessions to discuss the emerging business models that are more likely to thrive in the future.

Urbanization is driving change

With more than two-thirds of the world’s population expected to live in cities over the next 15 years, urbanization will drive change in many sectors. “To create a city that will grow and thrive, people need access to traffic, education and jobs,” said Elizabeth Yee, Vice President, Resilience Finance for 100 Resilient Cities. “Cities need to focus on the challenges of globalization, urbanization and climate change.”

As cities grow, one of the most serious challenges is affordability. Many people can’t afford to buy homes — and this unfortunate reality inspired Rubens Menin, the EY World Entrepreneur Of The Year 2018 Award winner, to found a company to help meet this need. Today MRV Engenharia is Latin America’s largest residential real estate developer and Brazil’s leading low-income housing builder, enabling countless Brazilian families to take their first step on the property ladder.

Throughout my life, I have pursued the purpose of bringing the dignity of homeownership to people for whom this is an unobtainable dream. The construction industry is well-positioned to further enact positive civil impact.
Rubens Menin
Chairman of MRV Engenharia, EY World Entrepreneur Of The Year™ 2018

“Throughout my life, I have pursued the purpose of bringing the dignity of homeownership to people for whom this is an unobtainable dream,” said Menin, Chairman of MRV Engenharia. “The construction industry is well-positioned to further enact positive civil impact.”

The Forum’s convergence session participants also highlighted the construction industry’s potential, noting that 3D printing, artificial intelligence (AI) and the Internet of Things are helping developers create greener, more sustainable and stronger buildings. One said, “Lighter building materials represent a big shift for the construction and infrastructure industries — steel is being disrupted, concrete is being disrupted, and there are new ways to put plastics and chemicals and new technologies to use.”

Cities need to focus on the challenges of globalization, urbanization and climate change.

Elizabeth Yee

Vice President, Resilience Finance for 100 Resilient Cities

 

Beyond buildings, the entrepreneurs brainstormed ways to increase housing accessibility. One suggestion was to create a co-sharing approach in which banks, financial investors and real estate agencies help to subsidize property through matched funding. They then could provide a number of homes that could be shared with people.

This search for innovation was echoed by Maria Vassilakou, Deputy Mayor and Deputy Governor of Vienna, where 62% of residents are in social housing.

“Cities with affluent budgets tend not to be the most innovative. What’s not economically sustainable won’t last in the long term,” Vassilakou said, noting that the City of Vienna buys land and sells it to developers at below-market rates. Developers are then required to offer highly affordable rents.

Adaptive reuse is key

As cities change, assets and infrastructure will need to be repurposed. “Public space will be shared differently. Humans will find a different space in the city,” said Albert Asséraf, Executive Vice-President, Strategy, Data and User Innovation for JCDecaux France.

Entrepreneurs are prepared for this challenge as well, pondering what to do with underutilized buildings in a world where many work remotely and most shopping is done online. Their suggestion: create communities in the space, such as charter schools, that would be created by public-private partnerships. Companies could then fund the schools to develop needed skills within the next generation of students.

Of course, the changes brought by increased urbanizations may be unpredictable, and cities will have to make room for experimentation. “We need to create safe spaces where innovation can thrive,” said Sebastian Peck, Managing Director of InMotion Ventures. “Let people take risks, and don’t create an environment where people fear reprisal.”

Health care power is shifting

Much like cities, health care is being reimagined by companies from a variety of sectors. They are fusing the biological, digital and physical worlds through data and analytics, shifting power from traditional health care incumbents to consumers, payers and new entrants.

Advancements in technology, data analytics and AI are revolutionizing how we live and stay healthy. “Technology plays a big role in social change — it’s a great equalizer,” said Ambarish Mitra, CEO and Co-Founder of Blippar and an EY Entrepreneur Of The Year™  UK Award winner.

The equalization of health care is evident as people turn to technology, such as voice-activated digital assistants for their homes. “They could identify the starts of infections or, for example, dangerous levels of mold, which leads to severe health implications,” said Steve Papermaster, Chairman and Co-CEO of Nano Vision.

Many people so far are on board, said Hanneke Faber, President, Europe for Unilever. Consumers are taking more responsibility for their own health than they ever have done in the past,” she said. “They’re more aware than ever of how to prevent illness — and they’re aided by wearables.”

Technology plays a big role in social change — it’s a great equalizer.

Ambarish Mitra

CEO and Co-Founder, Blippar, EY Entrepreneur Of The Year™  2016 UK

 

Data and privacy are at a premium

Convergence session participants agreed, noting that consumers are becoming more aware of their health care and therefore more demanding. This trend is forcing companies to review their business models to keep up with the market. And they are placing a greater premium on data to do so.

“The value of data is going to be more important than the product or service itself,” said Pamela Spence, EY Global Life Sciences Leader, noting that businesses need to account for cultural differences surrounding data usage by third parties. She said that in the US, consumers want to be paid for their data; Europeans are nervous about sharing information; and Asians are more open to their data being used.

Of course, the extensive growth of health monitoring and reporting raises questions about privacy. In fact, discussion within the convergence sessions went from preventive health care to trust quite quickly. Entrepreneurs feared that if people share their data, it could be used against them. But Mitra said there may be a resolution in sight: “At some point we’ll break down the walls. The consumer will take control back and decide how personal data should be used.”

The sway of brands is changing

Data has brought consumer industries to a tipping point as well. As every part of the value chain becomes digitized, algorithms are enabling more companies in more sectors to smartly fulfill individual consumer needs. Competition is likely to increase significantly as more products become commoditized. 

“In the future, the value of brands is going to become diluted as AI curates for you and consumer brand loyalty is reduced,” said Kristina Rogers, EY Global Consumer Products and Retail Leader. “You may need to collaborate with other brands to stay relevant.”

Technology is helping individuals understand themselves and what they need, so there is a challenge for brands to be more influential. One approach was described by Tassapon Bijleveld, CEO of AirAsia Thailand. By paying attention to branding, AirAsia stays focused on managing people’s expectations. “We run AirAsia as a consumer product company, and marketing is a huge focus,” he said. “We look at customers first — we make sure AirAsia is a global brand. Branding is everything to us.”

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Elle Macpherson relies on social media and fan interaction to maintain her brand. 

Branding also has been key to the career of Elle Macpherson, whose fame as a 1980s supermodel garnered the attention of a New Zealand lingerie company that wanted to license her name and image. Today she is the Co-Founder of WelleCo, an Australia-based global company that sells supplements featuring premium absorbable whole-food nutrients.

“I was captivated by the idea of merging wellness and beauty,” Macpherson said. She noted that the company’s success, which owes a debt to sharing images on social media and interacting with fans, is an evolution from her early career, when being less approachable led a to more iconic status.

Consumers search for transparency

In contemplating the future consumer, entrepreneurs in convergence sessions were in favor of a traceability ecosystem that would allow consumers to learn details about every brand they buy, including where it comes from and how it’s made. This would provide consumers the power to more effectively choose products based on a greater understanding of their personal data.

Much like the health care discussion, attendees also sought to safeguard consumer data. They proposed storing personal data and buying habits on a blockchain platform to which consumers controlled access — they could then “rent” their data to vendors. This approach could help companies bring goods directly to the consumer, avoiding intermediaries whenever possible to better control both service and experience.

As businesses prepare for this very different future, it’s important not to be too worried. “The fear of all the things that could go wrong overwhelms the entrepreneurial process,” said Nano Vision’s Papermaster, an EY Entrepreneur Of The Year™ Award winner who is now a member of the program’s Global Alumni Council.

EY’s Rohan Malik agreed: “Think big, start small and build on your ideas.”

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Summary

Dramatic changes are coming to cities, health care and consumer behavior. At the EY World Entrepreneur Of The Year™ 2018 Forum, prominent CEOs, EY sector thought leaders, EY Entrepreneur Of The Year™ alumni from around the world and attendees from a variety of industries grappled with our new disruptive reality to explore possible futures.

About this article

By

Bryan Pearce

Former EY Global Entrepreneurship and Start-ups Leader

Helping entrepreneurs add value to businesses, connect with each other and make the world a better place. Passionate about traveling and building lasting relationships with people around the world.

Related topics Entrepreneurship Growth