Will Your Business Disrupt—or Be Disrupted?
Digital transformation may sound like a buzzword, but the drivers behind it are very real. In an era where technology is reshaping businesses and industries, companies that harness technology can reap big advantages over those that don’t. Businesses must first determine how to adapt their businesses for the digital age and then put technology to work to bring these changes to life.
As the rate of technological innovation increases, the pace at which businesses rise and fall—known as the “creative destruction cycle”—speeds up too. In 1965, the average tenure of companies on the S&P 500 was 33 years. By 1990, it was 20 years. And it’s forecast to shrink to 14 years by 2026. If this forecasted churn rate holds, 50% of today’s S&P 500 will replaced over the next 10 years.
Established companies that can’t keep up will be pushed out of the market by more agile companies that disrupt established business models. Put another way, “The fast will eat the slow.”
We all know that Amazon gets this! Its business model is based on using technology and data to disrupt entire industries—providing more convenience, lower prices, instant and nearly-instant fulfillment to consumers. Amazon’s objective isn’t to meet customer expectations—it’s to reset them and disrupt incumbents.
This phenomenon is occurring everywhere in every industry—think about the impact of Uber and Lyft on the taxi industry, Airbnb in hospitality, or StitchFix in the fashion world.
SMBs increasingly understand the ever-more critical link between technology and business success. SMB Group research indicates that 82% agree that using new technology effectively is key to business growth, and over 80% agree that technological changes are reshaping their businesses, culture, and industries.
SMBs are also becoming more familiar with what digital transformation is. 57% of SMB respondents now say they’ve heard of the term and think they know what it means—up from 33% when we asked the same question in 2017.
But not all SMBs are equally proactive in this area. Our research reveals that younger businesses are considerably more progressive in their technology views and actions than their older counterparts.
For instance, compared to SMBs that have been in business for more than 10 years, SMBs that have been in business fewer than 10 years are roughly twice as likely to be planning to increase their technology spending as older firms and are 1.
