8 Digital trends
Disruptive events affecting Australian industries are coming faster and
becoming less predictable than ever before, especially for industries where the pace of technological evolution is confronting traditional business models head-on.
Both businesses and government need to embrace these trends and the innovation opportunities they provide.
Knowledge is commoditising, but data is increasing in value
Data is growing at a rate of 50% per year
These global players have been at the forefront of harvesting data
...but there are also significant opportunities for traditional business
Applying machine learning to drive online conversion
The largest retailer in the world has plenty of scope for analysing data – in light of this, the company developed and launched its own search engine 'Polaris' in 2012. which powers its web and mobile sites.
Polaris serves to not only provide Walmart customers with a more robust search function, but the algorithm has been desiged with the following capability to deliver value back to the retailer:
- A machine learning semantic search capability that allows it to 'understand' how items are related
- Product and category-related 'engagement scoring' which takes into account a customer's journey beyond a search query, assimilating this data to improve future delivery of search results
- A 'product popularity score' that takes into consideration social media data (e.g. Facebook Likes)
The retailer has already witnesseed a 10 - 15% increase in online shoppers completing a purchase using Polaris.
Reference: Semantic Search Technology Increases Shopper Conversion Rate, August 2012 and Walmart - http://news.walmart.com/news-archive/2012/08/30/walmart-announces-new-search-engine-to-power-walmartcom
The Climate Corporation
Applying data science to farming
Taking the unpredictablity out of farming, The Climate Corporation built one of the agriculture industry’s most advanced technology platform combining 30 trillion data points with:
- hyper-local weather monitoring
- agronomic data modeling and
- high-resolution weather simulations
to deliver a complete suite of full-season monitoring, analytics and risk-management products.
The company out competes its competitors who cannot assess risk at that the same level of local specificity. In October 2013, global provider of technology-based solutions and agricultural products Monsanto Company announced an acquisition of The Climate Corporation for a cash purchase price of approximately $930 million1.
1. The Financial Times, 'What Big Data means for business', 6 May 2013 and http://news.monsanto.com/press-release/corporate/monsanto-acquire-climate-corporation-combination-provide-farmers-broad-suite#sthash.artrNxpR.dpuf
Consumers are more digitally savvy than organisations
Customers are meshing together the next wave of
digital innovation to suit their everyday lives
Digital adoption amongst older generations is increasing
|% of internet users in each age group who use social networking sites|
Australian Communication and Media Authority, 'Smartphones and tablets: Take-up and use in Australia' 2012, October 2013
Today businesses are challenged by engaging three different generations
Tomorrow they will need to respond to the rise of Digital Natives
Applying machine learning to drive online conversion
Social platforms are driving the world
Social networks are playing an increasingly critical role in driving sales, often without the influence of retailers
1 million likes
Embedding enterprise social platforms can deliver large productivity gains and increase employee satisfaction
Your competitors are no longer just down the road
Opening education opportunities to all
Education is changing. Driven by a need for greater flexibility, customisation and a desire among knowledge workers to upgrade skills, the Massive Open Online Courses (MOOC) trend has gathered tremendous pace in the last few years. Coursera has benefited from this huge demand for online, free education having started with courses mostly in the IT space but quickly expanding into science, business, law, and many other fields. Within just two years the Coursera has amassed 7 million users and as of December 2013 raised $US85 million in venture capital. Locally, University of Melbourne vice-chancellor Glyn Davishas stated that "We took 160 years to build up a student body of 47,000 on our campus and in 10 months we recruited 300,000 people online. That’s the speed of change."1
This trend will continue to intensify local competition as global education institutions are able to serve previously unreachable segments and geographies. By providing college credits at a more affordable price and opening up information to new participants, MOOC platforms are disrupting the world of education.
Opening up the silk road to SMBs
Over the past 15 years, Alibaba has grown to become one of the world's leaders in ecommerce and B2B transactions - handling more than US$170 billion in sales across its various divisions.
Alibaba's strength lies in enabling SMBs to source inputs and products directly from Chinese manufacturers. Using its marketplace platofrm, Alibaba acts as a gateway into a market that otherwise would not be as readily accessible to many SMBs around the world. In Australia, the company has over 600K registered members and increasingly, large retailers are beginning to use the platform to reduce sourcing costs. Globally its revenue exceeds US$4 billion.
Reference: Alibaba @ CeBIT Australia presentation 2011
Facilitating 'collaborative consumption' across travel
'Collaborative consumption' and the 'sharing economy' has transformed the way consumers source and procure services. Taking advantage of this growing trend, Airbnb is disrupting the accommodation industry by connecting people across the world to rent rooms and homes from each other at a fraction of the cost of a hotel. Airbnb's platform is providing access to a growing global audience and enabling users to become their own entrepreneurs.
Launched in August 2008, recent valuations estimate its worth at approximately US$10 billion, meaning it would be worth more than some large global hotel companies such as Wyndham Worldwide and Hyatt Hotels (Mashable - http://mashable.com/2014/03/20/airbnb-10-billion/).
In Australia, Airbnb is gaining significant popularity with over 13,000 listings in 2013 and over 100,000 Australians having used the service locally and abroad. Globally, this disruptive force shows no signs of slowing with a total user base in excess of 11 million across 192 countries.
Productivity and efficiency impacting jobs
Productivity and employment in the United States
- Private Employment
- Time to return to peak private employment after post world war II recession