Last June, KPMG released a survey asking two things about the next four years of tech innovation: Where will it come from and which technologies will see the biggest disruptive influences? The survey asked questions of 668 entrepreneurial CEOs, angel and venture investors, and large company M&A and strategy executives in the US, China, Europe, Asia, the Middle East, and Africa.
The predictions are somewhat, forgive me, predictable:
- China and the US will share top spots in producing major consumer and business technology breakthroughs.
- India is expected to be a major player, too, but not as much as China and the US.
- Mobile and cloud computing will be the big innovation playgrounds in both consumer and business technologies.
No one has a crystal ball, but these predictions may well prove right. The timeline is relatively short, after all, so the hot topic of today could well be the hot topic in two years, which is all it would take to become the big influence on a four year time span.
The easiest prediction to take seriously is the one about China stepping to the forefront of disruptive technology breakthroughs. Shear size makes this possible, but China also has education levels, ambition, cash, infrastructure, and an entrepreneurial culture. Israel, another contender, has all these elements except size.
China’s real advantage, however, comes from its customer base: Chinese consumers and businesses are early adopters. They don’t have significant legacy product investments, and both individuals and CEOs find it sexy to be more modern than their neighbors.
But there are good reasons to expect surprises. Although KPMG generally speaking picked the right people to survey, since they are in the thick of the disruptive technology stew, they also come heavily biased. A big chunk of the respondents who picked China to lead in tech innovation over the next four years were, not surprisingly, Chinese. More than 70% of the Chinese surveyed picked China to pass the US as the world’s chief innovator.
Europe is generally regarded as a “has been” in disruptive technologies and Latin America isn’t even mentioned (perhaps because no Latin Americans were interviewed?). Among other issues, these two continents lack that broad “early adopter” market that new companies with new technologies require to get started and grow.
However, the key element of interest in KPMG’s survey results is completely missed in the conclusions and observations: diversity. The simple fact that disruptive innovation is taking place in completely different social, economic, and cultural contexts means that there will be more of it and it will appear at a faster pace. Precisely because China is a new source for innovation in contemporary technologies and business practices, innovation will be even less predictable and more dramatic than in the past.
Ironically, the recent innovations in communications are contributing to the emergence of new innovators. The disruptive technologies that have emerged over the last two decades from a relatively small group of countries are making it possible for smart, capable innovators around the world to stimulate and compete with each other.
But don’t expect the “old world” to be left behind. The emergence of creative, productive forces in China, India, Israel, and other hot spots will stimulate, not smother, creative, productive forces in the traditional leaders of innovation.
The United States, far from fading, will continue to be a major force in disruptive technologies. It has capital, infrastructure, receptive markets, and buckets of both new and seasoned entrepreneurs. Japan continues to hold back huge potential, if it could only turn that potential loose. Korea will surprise us all. And almost certainly there will be other surprises from companies in countries underrated in KPMG’s survey results. The global diffusion of capital, higher education levels, shorter communication distances, and more efficient access to global markets for products and services virtually guarantees surprises.