By Biren Gandhi, Head of Drone Business and Distinguished Strategist, Cisco
What is Frontier Tech?
Frontier Technologies or Frontier Tech are the domains of technology that bridge the R&D realm and mass market adoption realm. They are in the early stages of their exponential growth and are worth paying attention. Although the initial CB Insights Report on new frontier tech included only drones, space, augmented reality, and virtual reality; few other areas included in the definition of frontier tech are – IoT, Artificial Intelligence, Blockchain, Autonomous Vehicles, Speech Controlled Platforms, etc. Even though you may not be ready to embrace these technologies fully, the potential scope of their impact is so huge that the frontier tech is extremely risky to ignore for the top leadership of any sizeable company.
The Past: Evolution of the Ecosystem
If we look back on the history of technology development, growth and adoption over last 100 years, we can see an accelerating trend. Each new cycle of technology maturity is shorter, faster, and bigger than the earlier ones. For example, the telephone was launched in 1878 and took almost 75 years to reach 100 million users worldwide. On the other hand, mobile phones took about 15 years to achieve the same growth, and Facebook took just four years to reach that milestone.
In addition to the accelerated pace of technology adoption, barriers to experimentation are coming down drastically.
Instead of Return-on- Investment, maybe it is time to think ROI as Result-Oriented- Innovation to put innovation into practice and conquer the new frontier tech
What used to take significant capital and resources to spin up your own servers, can now take mere seconds to bring up your cloud powered compute infrastructure. On top of that, on-demand and pay-per-use business models allow us to experiment at much lower costs.
Developer Platform Ecosystem is another evolution that has changed the face of technology revenue models. I still remember my good old Facebook days in the year 2007 when we were getting ready to launch the first of its kind social network developer platform that became a huge success and a sought-after model later on.
Partnering with Right Players Is Critical to Survive and Thrive in Today’s Fast-Paced Business Environment
Apple App Store and Google Play Stores are obvious examples of developer-centric app economy that is expected to grow to $6.3 trillion by 2021.
My experiences over last few years of developing holistic Internet of Things (IoT) strategy, incubating a brand-new line of business around commercial drones, and positioning the blockchain platform have undergone very similar lifecycle patterns. There is a lot of chaos and uncertainty initially, most people stay in disbelief until some trigger events take place, some platforms provide key success elements, and then suddenly there is an exponential growth where most companies try to play catch-up.
The Present: Short-termism
It is very easy just to watch most of these long-term strategic shifts and admire them in awe after they are fully mature.
However, it is extremely difficult – especially for large corporate behemoths to participate first-hand and deeply engage in these technology developments amid their short-term chase of quarterly numbers.
In addition to the classic uncertainty, few more reasons block frontier tech’s early entry into big companies. The regulatory environment for drones, battery technologies for autonomous vehicles, public safety for urban mobility, lackluster acceptance of 5G standards for AR or VR systems, and perceptions around job loss for IoT and AI, etc.—all are great examples of hurdles for frontier tech investments.
In short, contrary to their lip service, big corporations do not typically invest in hands-on innovation. They inadvertently rely primarily on innovation through acquisition instead of incubating frontier tech.
The Future: Strategic Shifts
The most unfortunate reality of today’s corporate innovation programs is that they rely on yesterday’s tools to solve tomorrow’s problems. Acquiring someone to open up a new market might have worked in the past, but won’t work in the future. Companies need to invest resources into creating and owning futuristic technologies to acquire and sustain significant market share. Buying your way into highly sophisticated areas of drones, blockchain, AI, speech platforms, etc. is a flawed strategy. Unless and until you have some in-house talent of your own, your market leadership would soon fade away.
The key to success in this age of digital transformation is to fundamentally change the top line, the bottom line or stakeholder experience for all your customers. You need to play in both horizontal and vertical market segmentation. Partnering with right players is critical to survive and thrive in today’s fast-paced business environment. But most importantly, companies need to build core competency around frontier tech if they wish to claim any success in creating new business areas. Corporate innovation programs need to work beyond hackathons, grand challenges and ideation or business plan exercises. The new definition of ROI needs to be adopted. Instead of Return-on-Investment, maybe it is time to think ROI as Result-Oriented- Innovation to put innovation into practice and conquer the new frontier tech.