Alison Kay, EY Global Vice Chair for Industry, leads a team that helps companies navigate disruption and the convergence of industries. Kay uses her experience to guide companies through rapid technological shifts — addressing the commercial impact of emerging disruptive technologies and forecasting where the next tectonic shifts will be. Here, she explains the implications of sector convergence, how artificial intelligence will reinvent city life and why the latest technology just might re-imagine entire industries.
Q: How has disruption blurred the lines between different industries?
Industry disruption is largely the outcome of evolutions from key technology advancement and consumer behavior. Against a backdrop of digitalization and hyper-connectivity, disruption creates convergence nodes between previously separate industries.
It can be difficult to assess the impact of certain disruptive technologies approaching maturity. For example, the 2,000% growth of the use of private and commercial robots from 2015 to 2030 could create a US$190b market. Smart health brings together very different stakeholders in new digital ecosystems: Governments, insurers, care providers, consumers and life-sciences companies have now become inextricably linked.
The first sectors impacted were technology, telecoms and media companies. For years now, we have been subscribing to television content through telecommunications companies, making phone calls through cable TV providers and buying books and music through technology companies. Today convergence is redefining another wave of industries, including health care, consumer products and insurance.
Q: What are the economic ripple effects of convergence?
The unprecedented pace of industry disruption and convergence creates ripple effects across all industries. For example, by 2030 the world’s 750 largest cities are projected to account for 61% of global GDP. Smart cities will be technologically enabled, connected and resilient to environmental, social and economic challenges.
Artificial intelligence will eventually orchestrate and optimize flow of traffic and allocation of energy throughout those megacities. Urban planning will need to account for new developments in health care, education and mobility — and make better use of public funds with more efficient models. Los Angeles has already saved US$8m by switching street lamps to LED with mobile sensors.
Convergence also creates new markets and opportunities for companies or governments to grow and compete in a connected world. Industries traditionally ruled by a few corporations have seen new entrants from other sectors. Supplier and customer relationships will continue to be challenged by new digitally enabled business models.