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Advances in technology are poised to disrupt Canada’s economy- yet more than four out of five Canadian businesses aren’t ready for it

Disruption

Posted on May 22, 2015

The way Canadians live and work is about to go through a profound change. Rapid advances in key technologies are poised to disrupt many of the industries that anchor our economy, and the impact will be felt across the country. Yet the majority of Canadian businesses aren’t prepared for the coming age of disruption – and many of the unprepared won’t survive. For over a year, Deloitte has studied the Canadian economy and surveyed 700 business leaders across the country to better understand whether Canadian businesses are prepared to withstand (and even embrace) the potentially disruptive power of new technologies and to thrive in the aftermath.

We anticipated that Canadian businesses were ill-prepared for the challenges of disruption. Our prior research into this country’s stubborn productivity challenges showed that Canadian companies are, on average, more risk-averse than those in the United States, that they struggle to maintain a high rate of growth and that many have little to no idea that they’re investing less than their peers in technology and R&D. After evaluating performance in four key areas associated with disruption preparedness – awareness, culture, organizational agility and resources – our initial fears were confirmed. Very few Canadian organizations are ready to withstand the disruption that is rushing towards them.

However, our research also uncovered traits shared by those Canadian companies that are well-prepared to adapt and evolve in the face of industry disruption. These highly prepared companies achieve rapid revenue growth, sustain innovation successfully and make significant investments in R&D – all indicators of very productive businesses.

The implication is clear: companies that invest in productivity improvements today will be far better prepared for the disruption to come. Those that don’t may find themselves quickly overwhelmed by the coming change.

One such change is the trend towards collaborative connected platforms. The Internet has revolutionized how we communicate and interact with each other. Today, we take for granted our ability to connect with people and participate in activities thousands of kilometres away. Increased connectivity and Internet capacity have made crowdsourcing, crowdfunding and cloud computing possible, giving people and organizations alike access to skills, knowledge, funds and resources in ways that were never before possible.

For businesses, the advent of collaborative connected platforms is providing the opportunity to tap into expertise and analytical ability outside their organizations – and in some cases transcend industries and areas of expertise. More and more companies are using crowdsourcing to find solutions to complex business problems more quickly and cheaply than using traditional methods. In fact, the Canadian Securities Administrators have recently announced that certain securities regulators adopted certain start-up crowdfunding exemptions (see our “Securities insights” section below). Meanwhile, workers themselves are discovering that these platforms enable more of them to work as independent contractors rather than remain with a single company for years.

Why collaborative connected platforms will disrupt businesses

Thanks to the increasing speed and capacity of the Internet, collaborative connected platforms are growing rapidly: In 2010, Kickstarter, a crowdfunding platform for creative projects, raised $2 million per month in pledges; by 2014, it was raising $44 million per month. As Internet capacity continues to increase and the number of people connected to it continues to grow, companies will use these platforms more and more.

TopCoder, a platform that brings together more than 750,000 members to grapple with complex data-coding challenges, already organizes contests in computer programming, and together with NASA has held multiple contests to enhance asteroid tracking, deep-space networking and astronaut health. General Electric (GE) engaged Kaggle, the world’s largest community of data scientists, to predict runway and gate arrival times for domestic flights in the United States using multi-source flight and weather data. GE offered a prize of US$250,000, and over four months it received 3,067 entries. The winners produced a 40% accuracy improvement over industry standards – equivalent to saving five minutes at the gate per flight, or an annual savings of US$6.2 million for a mid-sized airline.

How collaborative connected platforms will disrupt businesses

Increased connectivity has helped businesses in many sectors achieve superior results. It enables companies to easily collaborate with colleagues around the world – as well as with a new cadre of independent workers that choose who they work with. The sheer number of people a firm can now inexpensively access is staggering. Canadian companies that don’t seize the opportunity to use these new collaborative platforms to access resources and talent risk being outrun by competitors that do. This will require a rethinking of how work is done and of the workplace needed to support this new way of working.

For more on the Age of Disruption and the Future of Canada, visit our website and download the full report.

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