As the Networked Society comes to life, ICT can transform a wide range of industries. Transport, utilities and music are already seeing big changes – and banking is next.
How many times have you used Spotify in the past week? The idea of being able to stream music to a connected device anywhere, anytime might seem a simple one, but it’s a great example of how ICT has the power to transform an industry – in this case the music business – almost overnight.
Spotify uses three ICT elements – broadband, mobility and the cloud – to create an entirely new service that displaces previous offerings (physical media, such as CDs), and drives existing players (record companies) to rethink their business models. It’s the combination that makes the difference – broadband makes streaming music possible, mobility enables consumers to enjoy the service anywhere, and the cloud means they can access their playlists from any device.
Take just one of these elements away, and suddenly Spotify isn’t much of an improvement over cassettes and bulky home hi-fi systems.
"Broadband, mobility and the cloud are the pillars that enable the Networked Society," says Erik Kruse, Strategic Marketing Manager, Networked Society Evangelist and the author of a new report on industry transformation.
"The combination of these three elements is a radically disruptive force that enables new ways of doing business, stimulates innovation and changes the competitive landscape for entire industries."
By rewriting the rules for a whole industry, Spotify clearly highlights ICT’s potential as a service disruptor. However, this isn’t the only way that ICT transforms industries. Broadband, mobility and the cloud can also be used to improve efficiency and optimize processes for existing services.
For example, Maersk, the world’s largest shipping company, relies on real-time connectivity to manage delivery times and improve energy efficiency. Utility company E.ON Elnät Sverige, meanwhile, is using smart grids to manage infrastructure and offer customers up-to-date information on their energy consumption.
Of course, different industries transform at different paces. The process is particularly advanced in the music industry, while the transport and utility sectors are still exploring the possibilities. But ICT has the potential to disrupt just about every business – and the pace of change will never be as slow as it is today. So which industry is next?
"One particularly interesting sector is banking," Kruse says. "It’s clear that the freedom to send, spend and receive money with a mobile phone is quickly becoming an essential part of life for billions of people.
"Today’s payment networks need to be connected and interoperable, and this creates a unique opportunity for ICT to disrupt existing business models and support the launch of new and innovative services."
Ericsson’s new On the Money video, which is part of our Networked Society series, discusses some of the hottest questions relating to the future of money. Among other issues, it looks at mobile money payments in Uganda, crowdfunding as an alternative to venture capital, and even the potential of trust and reputation as a currency. Click here to watch the video.
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