Never in the history of business the survival of a company, regardless of its size, had faced so much level of risk to the extent that in the next years 40% of the companies of the Standard & Poors 500 will cease to exist, explained exclusively David Roberts, one of the leading experts in technology disruption, artificial intelligence, innovation and exponential leadership at Singularity University.
Roberts, who will be a keynote speaker at Expansión Summit 2018, commented that Mexican companies and the rest of the world face the challenge of understanding and adapting to the fact that disruption will be the operating norm for the next 20 years.
Here the conversation that Expansión had with Roberts.
David Roberts (DR): In the next 20 years, the biggest challenge facing companies is that disruption and disruption becomes the norm. In the twentieth century, disruption was not the norm, in fact it happened so little that when it happened everyone noticed it.
Now, in the next 20 years, there are no industries that are not subject to some kind of drastic change. All those companies that have been operating traditionally for decades will see or suffer as technology will fundamentally change them, even to companies as old as mining.
So we have to understand disruption, and the key to understanding disruption is that it’s different from innovation.
Innovation is about small gradual changes and all companies have to be good at that. But just because you’re good at innovation does not protect you from market disruptions.
When a disruption occurs, the business model itself also begins to change. It is not just that the product improves or the service improves, but that the business model itself changes completely.
To give an idea, in the 1920s the average of the 500 largest companies in the world had an average age of around 67 years. Today the average is 15 years. And if you look at the list of Fortune 500 companies in 1955, 90% of those companies are no longer on the list. In the next 10 years, 40% of the S & P 500 will disappear from the list.
Those who do not know how to approach and prosper in the face of disruption will cease to exist.