A new report by Deloitte singles out six industries tipped to experience a “short fuse, big bang” in the way of digital disruption, highlighting opportunities for forward-thinking start-ups.
The report, titled Digital disruption – Short fuse, big bang? – is the second in a series of papers titled Building the Lucky Country – Business imperatives for a prosperous Australia.
In the report, Deloitte identifies six industries that are likely to be subjected to significant disruption in the near future, dubbing this the “short fuse, big bang” effect.
They are retail trade, ICT and media, finance, professional services, real estate, and arts and recreation.
“The sectors that fall within the most pressing ‘short fuse, big bang’ quadrant comprise about one-third of the Australian economy,” Deloitte said in its report.
“Retail trade businesses generally face a relatively short fuse and an average magnitude of digital disruption. But… there will be differences among department stores, supermarkets and entertainment goods stores.”
“Entertainment goods stores will face greater and more imminent digital disruption.”
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“Department stores will also experience above-average digital distruption, as online retail and globalisation intensify competition.”
“However, supermarkets face fewer direct threats… due to the perishable nature of grocery goods and the relatively low value of many items, which means that online sales are still a low proportion of total grocery sales.”
However, Deloitte said some of the most profound changes will be felt in sectors like education and health, both of which fall under the “long fuse, big bang” category.
“Changes such as electronic health records and remote diagnosis are already being introduced in parts of the health sector,” the report said.
“Over time, we will see these services being delivered in fundamentally different ways.”
The report pointed out there is also a geographic dimension with regard to digital disruption, with some states and cities predicted to be more affected than others.
“For example, NSW’s relative strength in the financial and ICT sectors (and its smaller than average mining industry) leaves it facing a bigger digital bang and shorter fuse than Australia as a whole,” the report said.
“This is even more true for the Sydney CBD, where almost one in three white-collar workers is in the finance sector.”
According to Deloitte Technology leader Robert Hillard, the digital age will be “confusing and confronting” for many businesses, so business owners must be prepared to innovate.
“What used to feel like strengths can become weaknesses if leaders are not prepared to constantly disrupt and innovate, and have the customer or client at the centre of everything,” Hillard said in a statement.
“Engaging in new, innovative and maybe even disruptive approaches to market is, and will be, an absolute necessity.”
“For some, digital disruption will be explosive and immediate – a force that rocks the foundations of their business.”
“For others less vulnerable to digital trends, the changes will be slower and more subtle. For others again, digital innovation will be the cornerstone for future value creation.”