LONDON–(BUSINESS WIRE)–Half of all UK business leaders (50%) fear that their industries face
significant digital disruption within the next two years, according to new
research published by Microsoft today. The financial services
sector, which employs 2.2 million people and contributes £66bn in taxes
to the UK economy, is demonstrating the highest level of anxiety, with
two-thirds (65%) of respondents fearing the impact of disruption on
their markets over the course of the next 24 months.
The report, the most extensive of its kind to date, finds that whilst
disruption is imminent for a wide range of industries, the shelf life of
current business models is also extremely limited – nearly half of UK
business leaders (44%) say their existing business models will cease to
exist within the next five years.
Despite the potential threats such disruption will mean for British
businesses, many organisations seem unwilling to face the coming
changes. Almost half (46%) of business decision makers say senior
leaders in their organisations are unwilling to disrupt their existing
businesses to grow and compete.
“The dawn of the fourth industrial revolution is a massive opportunity
for British businesses but many are still living in an age of innocence
or inertia when they need to be innovating,” says Nicola Hodson, General
Manager, Marketing & Operations, Microsoft UK. “Whilst this research
indicates that business models are breaking, many business leaders
appear unwilling to address them.”
The Microsoft study, Digital
Transformation: The Age of Innocence, Inertia or Innovation?,
examines how organisations across vertical sectors plan to compete and
‘survive’ in response to this unprecedented pace of change. The
research, which was fielded by YouGov on behalf of Microsoft,
consolidates the views of more than 1,000 UK business and IT leaders
from large UK organisations and represents the most extensive research
into the state of digital transformation in the UK.
Speaking about the seismic levels of disruption occurring in the UK and
around the globe, Hodson added, “New challengers, many who are digitally
savvy start-ups, are disrupting established markets by deploying new
technologies quickly, and luring expectant customers away from
established competitors. For many larger organisations, the challenge is
how to react to this market disruption in a considered way and how they
maintain competitiveness in a rapidly shifting landscape.”
Financial Services – a battleground for digital disruption
The financial services sector, which represents a huge contribution to
UK jobs and growth, fears that the biggest disruption will come from
entirely new market entrants (33%) – significantly higher than other
sectors including retail (10%) and manufacturing (10%). As a result,
financial organisations are more focused on the future, with two-thirds
(64%) stating that they have a formal digital strategy in place.
Public Sector Challenges
Meanwhile, the public sector faces an even bigger hurdle and has been
the slowest to apply digital technologies to business challenges, with
only a third (35%) saying they have a formal strategy in place and one
quarter (26%) actively stating that no such strategy exists at all. Fear
of cultural change and leadership are driving this uncertainty – only
35% of public sector respondents believe they have a digitally literate
leadership team, despite their belief it is a critical element to
implementing a successful digital strategy.
A brave new world
UK business leaders remain cautious of the long term societal impact of
rapid digital transformation – 51% say they are anxious it will raise
more concerns about privacy and security. Those in the public sector are
most worried (56%), compared to those in financial services (48%) and
retail (47%), yet the figures are relatively high across industries. In
addition, a third (33%) think that older generations of workers will get
left behind in some ways, rising to over 40% from those in retail,
pointing to cultural change as a potential barrier.
This points to a need for government and business to work together to
address privacy and security concerns for the benefit of all, putting
people first. Education on how data is used and empowering citizens to
take ownership of their data is also fundamental if society is to truly
benefit from the promise of digital transformation.
A full copy of the findings can be found on Microsoft’s website here.
Microsoft (Nasdaq “MSFT” @microsoft) is the leading platform and
productivity company for the mobile-first, cloud-first world, and its
mission is to empower every person and every organization on the planet
to achieve more.
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