Convergence seems to be everywhere in the business world these days. It covers a wide range of factors which can come together to change the status quo in an industry or value chain. Think of food and healthcare in functional foods, or telecoms and energy in smart grids. Digital technology has been a huge enabler of convergence.
Nearly all our articles in this edition of Prism are linked in some way to convergence and what it might mean for the future of particular industries. Convergence poses significant threats and opportunities: threats of disruption to established markets and business models, as well as new opportunities to leapfrog the competition through innovation. The bad news is that, by definition, convergence implies the need for companies to master new capabilities, so you either have to develop them internally, or strike up partnerships with others who have them, or both.
In our lead article we shine a light on a major global industry that has an impressive, but often overlooked, history of value creation: chemicals. We show how, through embracing and harnessing the opportunities of convergence, chemicals and other asset-heavy industry players can find new growth and turbocharge their valuations.
Autonomous vehicles are a classic example of convergence between the automotive, ICT and transport domains. Major social, economic and environmental benefits are anticipated when the change to autonomous happens, but how likely is it that these benefits will be realized? The answers in our second article may be surprising.
In our third article we look at the now-common practice whereby large companies set up in-house start-up incubators as a means of driving growth in new and converging business areas. It sounds like a good idea, but how often does it deliver the scale and speed of growth companies were expecting? We look at some newer incubation vehicles that are much more likely to be successful than the conventional model.
Our next two pieces address different aspects of convergence in the energy and transport sectors. In a future scenario of increased demand from electric vehicles and intermittent renewable energy sources, are we going to risk blackouts, as some commentators are suggesting? And how should energy companies respond to the needs of digitally empowered energy consumers in the coming years? Our experts provide some insight.
Finally, we focus on healthcare, particularly the far-reaching effects of new, one-off curative therapies replacing ongoing lifetime treatments for diseases previously thought to be chronic or untreatable.
To manage convergence, companies need to be excellent at anticipating the future, innovating beyond the core, and transforming their capabilities. This is what we help our clients with at ADL. Enjoy the issue!
Chief Editor, Prism
Table of Contents
Despite an impressive record of value creation and its central importance to meeting mankind’s future “mega-needs”, the chemicals industry is undervalued by investors, which holds back its strategic freedom to grow. Focusing on four key trends to power transformation, this article looks at how this challenge can be overcome by embracing convergence, through lessons that can also be applied to other high-capital- investment, asset-heavy industries.
Traffic congestion has a major impact on air quality, health and productivity in cities across the globe. Zero-emission vehicles, autonomous driving and new mobility models are billed as providing solutions to this problem, but will they work in practice? Drawing on a unique combination of real-world modeling, consumer research and trend analysis, this article outlines the impact of these developments on drivers, car manufacturers, regulators and public transportation providers.
While large organizations have enthusiastically embraced the creation of in-house corporate incubators to identify and support breakthrough growth opportunities with start-ups, for many, the results have been disappointing. This article argues that to overcome these challenges and successfully scale up new opportunities, corporates have to embrace next- generation models.
The combination of a growing need for electric vehicle charging and an energy industry increasingly reliant on renewable generation has led to many prophesizing power cuts and blackouts as current infrastructure struggles to cope. However, this charging challenge will instead open up new opportunities for the energy and automotive industries as the two converge. We explore how this will transform both sectors.
The energy sector is undergoing radical transformation as formerly passive consumers take control over their energy consumption and procurement. Based on the five stages of this transformation, we explain how it impacts the energy value chain and outline the capabilities that traditional providers must embrace if they are to meet the needs of the energy consumer of the future.
The shift to curative treatments promises to transform the entire healthcare ecosystem. Patients whose conditions were previously managed through ongoing, long-term medication can now be cured through specific courses of treatment. This transforms their lives – but, as this article explains, it also has a disruptive effect on the wider market, shifting payers’ expenditure, increasing the importance of first-mover advantage for pharmaceutical companies, and changing care models for healthcare providers.