Uncharted territory: The advent of new digital industries

The role of technology is evolving at a rapid pace. With the rate of change and innovation continuing to accelerate, it’s no surprise that technology is completely reshaping the way we live and work and, in doing so, creating limitless opportunities.

Today, the world’s largest car hire firm, Uber, doesn’t own any cars. The world’s largest accommodation provider, Airbnb, doesn’t own property. Breaking boundaries and forging into unexplored territory, these examples illustrate the shift from traditional products, services and customer experiences to those delivered through digital platforms that form part of a broader ecosystem and ultimately new digital industries.

Traditional business structures and norms have not only been redefined, they are being rewritten. In fact, the transformation is so great that policy makers and regulatory bodies have been unable to keep pace with the changes emerging in these new digital industries. As a result, their policies often lag behind the industries they are required to regulate.

In an era of flux, pioneering companies have an opportunity to take the lead in this new environment. Participating in the prevailing markets is not enough. In order to grow through their digital strategies and continue to be relevant, companies must clearly mark their place in their ecosystem and work to shape the digital markets of tomorrow.

Partnership driving innovation

To fulfil their digital ambitions, companies must take on a leadership role to help shape the new rules of the game. Those who take the lead will find a place at or near the centre of their new ecosystem, while those who don’t risk being left behind.

By establishing best practices for their entire industry, businesses can define the standards and expectations in the new market while also lessening the need for external regulation. Technical and non-technical enterprises have the opportunity to work together with regulators and their stakeholders to educate, collaborate and define the new rules and ethics of uncharted digital industries.

This has already been seen in the collaboration between Alphabet, Amazon, Accenture, Facebook, IBM and Microsoft, who together are defining a standard of ethics for advancements in the artificial intelligence (AI) industry. In 2016, these companies formed the Partnership on AI, which is a technology industry consortium focused on establishing best practices for AI systems and to educate the public about AI.

Despite their commercial competitiveness, these businesses understand the importance of a strong framework that defines the entire ecosystem of AI pioneers. Collectively setting the rules for this rapidly evolving industry, they are able to mitigate the risks of complex external oversight, prevent harm to consumers and accelerate innovation.

Regardless of the circumstances that lead to the formation of a new industry, the partnerships within it will define the contours of what’s to come. New digital industries can be used as a tool to foster new collaborations and establish true partnerships with governments, stakeholders and customers; fostering continued growth into the future.

The technology of digital trust

The ripples created from a new digital industry can turn into disruption at all levels of society. Security, privacy and ethics, must be at the core of any digital industry strategy in order to drive governance and accountability. Getting digital trust right requires taking a human approach and having people front and centre.

As leading companies refine these strategies, it is important to note that the future of business will not see organisations implementing governance strategies through offline activities like boards and committees; they’ll be digitally replicating these approaches by embedding rules and standards within technologies themselves.

A plethora of emerging technologies provide a new arsenal of tools for organisations to begin to address issues around governance, accountability and digital trust. The most mature of these emerging technologies is the distributed database known as blockchain. Blockchains deliver built-in solutions to many historical challenges of governance: transparency, a guarantee that records have not been changed, and the ability to operate in a distributed fashion.

With the relentless change of pace across industries, businesses must decide how to apply blockchain and other emerging technologies such as differential privacy, smart contract technology and homomorphic encryption to shape the new rules of engagement in the digital ecosystem.

Defining the rules for new digital industries is the new frontier in corporate social responsibility. By acting now, businesses can establish the rules for any new challengers in industries and ecosystems that are still emerging. And by demonstrating leadership in this space to customers, partners and external agencies, your organisation will enjoy expanded freedom and opportunities to innovate.