By Carolyn Fairbairn, Director-General, CBI
The pace of change in the business environment is accelerating. It is no longer the strongest businesses that survive and thrive - but rather the ones that adapt. A perfect concoction of technological advances and evolving customer behaviour means businesses across all sectors must be prepared to change.
Firms that are disrupting their own business models are crucial to the entrepreneurial health of the economy. Disruptive innovation brings new ideas, drives competition and generates investment from around the world.
So how can disruptive innovation become a competitive advantage for UK firms?
Above all, innovation needs to be at the core of companies’ business models. One of the biggest challenges for firms is how they retain their innovative roots as they grow so that they can disrupt, adopt and adapt early.
The UK has some fantastic success stories of companies that are disrupting their own business models. Three examples, all from different sectors, spring to mind:
In the automotive industry, manufacturers are investing heavily in software and collaborating with technology companies to develop connected cars. This huge investment marks a shift from a core focus on the product to the opportunities and added-value that services like autonomous driving and hyper-connectivity can provide.
In the tech sector, UK companies like Busuu are taking the world by storm. Founded in 2008, this online network to learn a language was originally a web-based business. But with the huge uptake in smartphones the CEO made the decision to disrupt its original business model and pour technical resources into developing the mobile app. Now the firm has over 55+ million users and is reaching into new markets.
Finally, in the field of education, an area in which the core interaction between students and teachers has not changed markedly for hundreds of years – we are starting to see the potential of interactive online learning. Platforms such as EdX are allowing UK universities to pioneer virtual laboratories, interactive video based lectures and easily accessible content to improve and democratise the higher education experience.
The central theme from these examples is that businesses and sectors that are prepared to implement fundamental change often reap the rewards. Firms that are up to the challenge of adopting new technologies, using alternative forms of finance and investing in higher skills can navigate a successful course in this business environment.
The CBI is working closely with government to shape a policy environment that enables new ideas and disruptive business models to thrive. Key to achieving this is for the UK to be an innovation leader, for us to develop nimble regulatory frameworks and for there to be a joined-up approach between industry and government to industrial strategy.
Looking to the future, technological developments such as automation, blockchain and cloud technology are opening up exciting opportunities for productivity improvements and new avenues for growth.
I’m looking forward to our CBI Annual Conference, in partnership with Deloitte and Hays, where disruptive innovation will be front and centre. We will bring together the leading names from the worlds of business and politics to look at the future of the UK economy and how business can step up to the challenge.
To find out about how to unlock possibilities to harness disruption for strategic advantage, please contact the author of this post – Carolyn Fairbairn, Director-General of Confederation of British Industry, or Vimi Grewal-Carr, Managing Partner for Innovation at Deloitte.