Disruptive Technologies

E-commerce is evolving

  • the technologies will either evolve or have a limited lifespan
  • a challenge is to determine what new technologies are relevant and what they might contribute to the future especially of e-commerce
  • definition of technology
    • the application of science, math, engineering, art, and other fields of knowledge to create tools and implementations deemed useful by a society

Adoption of disruptive technologies

  • a new disruptive technology
    • initially underperforms the dominant one along the dimensions mainstream customers in major markets have historically valued
    • has other features a few fringe (and generally new) customers value
  • products based on disruptive technologies are typically
    • cheaper
    • simpler
    • smaller
    • more convenient than those established on the dominant technology
  • the most profitable customers generally do not want and initially cannot use products based on disruptive technologies
  • first commercialized in engaging or insignificant markets
  • incumbents conclude that investment is not a rational financial decision
  • the new disruptive technology
    • steadily improves in performance
    • until it meets the standards of performance demanded by the mainstream market
  • finally
    • the new technology displaces the dominant one
    • the new entrant displaces the dominant one in the mainstream market
  • example
    • Barnes & Noble (1873) (MC: $0.475B) vs Amazon (1995) (MC: $878B) - only 0.06%

Development path and current technology

  • the long nose of innovation
    • the bulk of innovation is low-amplitude and takes place over a long period
    • technologists should focus on refining existing technologies as much as on creation new ones
    • therefore, most technology likely to have an impact in the next five years is already at least 15 years old and unrecognized
    • examples: IoT and AI
  • current technology landscape
    • internet connecting the whole world at low cost
    • cheap, small, dense data storage – hence big data possible
    • high speed networks; ubiquitous WiFi and mobile network
    • access to almost unlimited processing power at low cost
    • Moore’s law leads to cheap, small processors and sensors
      • embedded systems
      • smart devices
    • advancements in energy efficiency – yet more innovation needed
    • a good example of disruptive technology is Internet of Things (IoT) and Artificial Intelligence (AI)
  • disruptive digital technologies
    • technologies which offer opportunities for business for new products and services for customers and can transform internal business processes
    • a technology that changes the bases of competition by changing the performance metrics along which firms compete
    • technology based on customer needs that drive customers to seek certain benefits in the products they use and form the basis for customer choices between competing products
    • for IoT, we have the capability to fully connect and integrate a wide diversity of devices and objects into the online environment and interact with them
    • for AI, we have Big Data and powerful cloud processing power to support it

IoT

IoT “worlds”

  • tagging world
    • is about identifying things
    • identifiers such as RFIDs are attached to things (e.g., packages) to enable their automatic identification and tracking
    • based on ID, the information about things can be accessed from a database or from the web
  • sensors world
    • is about sensing things
    • “second hand” access to the properties of things, that can be perceived from the outside using a variety of available sensors
  • embedded systems world
    • is about reading things
    • “first-hand” access to data possessed by things
    • e.g., industrial machines or home electronics, already embedded with some processing and data storage capabilities

IoT strategic areas

  • transport (e.g., smart cars, smart traffic)
  • energy
  • healthcare
  • agriculture
  • buildings
  • smart city

4-stages of IoT architecture

AI

Neural networks

  • neurons
  • example

Additional Reading