The digital economy can be described as a perfect storm and the challenge for businesses is to find opportunities in this perfect storm.
So said Neil Jacobsohn, CEO of FutureWorld International, during a keynote address at ITWeb Digital Economy Summit 2015 at The Forum, Bryanston, this morning.
According to Jacobsohn, with digital technologies having a big impact on businesses, it is no longer business as usual.
"Things are now a little bit different in business today. Even death and taxes are not certain."
Giving examples of how the tax landscape has changed, Jacobsohn pointed to coffee giant Starbucks which only started paying tax to the UK government in 2013 - its first such tax payment since 2009. This followed pressure from politicians and campaigners to clamp down on corporate tax avoidance.
Another example is the Google tax, he added. Google tax is a popular term used to refer to a diverted profits tax.
"These are legal businesses but they are facing the realities of the changes that are going on in the digital economy," said Jacobsohn.
He also believes that thanks to digitisation, death could become optional. "Within 50 years, whole-body replacement will be routine."
To highlight that "it's no longer business as usual," he said traditional tech giants like IBM were now falling behind digital companies like Amazon, Apple and Facebook.
"As of April 2015, IBM's market capital was $162 billion, Facebook $231 billion, Apple $738 billion, Google $362 billion, Microsoft $346 billion, GE $276 billion and Alibaba $210 billion," said Jacobsohn.
"Everyone and everything is impacted. For all the industries, the rules of business have changed. How society behaves has changed. How individuals respond has changed and how communities develop has also changed. This means that your customers have changed."
According to Jacobsohn, the new forces driving this change are connectivity, driven by digitisation, leading to massive disruption, as business dematerialises, and society democratises.
He noted that although there are about seven billion people on the planet, there are even more connected devices. "Currently, there are about 7.1 billion mobile subscriptions but we only have about 2.1 billion toothbrushes."
By 2020, he added, there will be three billion new minds to join the global economy as well as tens of trillions of emerging buying power.
He believes digitisation has changed everything from media, retail, entertainment and leisure, photography, travel, publishing, banking and there is so much more to come.
He made reference to "platform economics" as one of the biggest drivers of digitisation. "When your product gets connected, suddenly it's a whole new ball-game."
As an example, he revealed Apple recently announced that customers spent over $10 billion on the App Store. App Store customers downloaded almost three billion apps in December, making it the most successful month in App Store history. Apple's incredible developers have now earned $15 billion on the App Store, said Jacobsohn.
French entrepreneur Gary Cige, a few years ago, was helping a friend hang a mirror in a house in the country on a Sunday afternoon, when they realised they needed a drill. And yet, Cige realised, they were surrounded by power drills - probably dozens and dozens just sitting in cupboards and garages for miles around, he noted.
"Why wasn't there a simple way to find a drill to rent locally, just for a few bucks? Enter Zilok.com, a Web business that does just that. In just two years in business, Zilok has nearly 200 000 items listed, and is doing 6 000 transactions a month. And it's disrupting mainstream businesses. It has become the fastest-growing renter of cars in France."
Using the Internet, the marginal cost of marketing is virtually zero; now the marginal cost of supply is heading to zero; and in a mega-connected world, access triumphs over ownership, he explained.
"We are living through one of the great seismic shifts of mankind....in fact, we're in the midst of the greatest power shift mankind has ever experienced. The shift from institutional power, the power of the government, the power of the corporation, to the power of the connected individual.
"This will have massive implications for business and markets. New network models are challenging existing business; they're shaking corporate foundations, they're actually creating the next generation of business; and they're opening the playing field to wholly different ideas and different players."
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