Technology runs the world. It impacts every aspect of our lives. This immutable fact is even more true in large organizations. Not only do we depend on technology to run our organizations, technology is at the heart of the value propositions we offer to customers and the business models we use to compete. Often, the most important bets companies make are technology-based. Many existential threats to companies come from failing to correctly predict how technology will change and then not making the adjustments and investments necessary to take advantage of these changes.
Further complicating the need to anticipate these technological changes are the often significant investments, long lead times, and cumbersome change management required to invest and the associated changes in business models.As the pace of technological change quickens, the need to predict the impact of upcoming technological innovations and pair them with world-changing megatrends becomes paramount for all large organizations.
The need to continually predict future technological innovations is a bane of all companies of size and substance. Channels like vendors, conversations with colleagues, and meetings don’t provide enough warning, and people get frustrated because of a lack of contextualization. Reading academic and scientific papers is time-consuming, and most executives don’t have the scientific background necessary to evaluate new science or translate these implications into future business realities.
Moreover, many scientific advances never make it to commercialization, and it is difficult to predict when, if at all, a technology will be commercialized. Yet there is an increasing need for a clear understanding of these technologies, their timing, and their economic impact.
As a useful thought experiment, consider the impact of future battery technology. The current state of the art is based on lithium, and advances in phosphate-ion technology have rapidly supplanted previous generations of lead-acid battery technology. However, lithium's dominance looks set to be short-lived.
Lithium-based batteries are a step up from lead-acid technology, being able to store electricity at high densities without the corrosive side effects of lead-acid batteries. However, lithium-based batteries obviously have their own problems. They are expensive to manufacture, and lithium is rare and expensive to mine. In addition, mining lithium is harmful to the environment, and large amounts of rock must be processed to extract it. Finally, the density of energy storage is insufficient even to meet current requirements, let alone the emerging needs of the energy grid from solar and wind.
In investigating new technologies that can address these issues, sodium-ion appears to be a promising next step: it has low cost, good safety properties, is more environmentally friendly, and also has the potential to operate with a low rate of energy dissipation and high density energy storage.
A team at the Everest Group tracking this technology predicts that sodium-ion's current rate of scientific advancement will overcome density and lifecycle challenges and begin to become commercially viable within three years. With improved performance, reduced cost, and reduced environmental impact, it is reasonable to expect that sodium-ion batteries will rapidly replace lithium technology.
With this prediction in mind, let’s consider the potential impact it could have on many industries and companies. Clearly, the battery industry must take this potential shift in technology seriously. Within three years, this change will impact existing and future investments in factories and equipment. It will have an impact on future battery designs, as well as the supply chain for raw materials.
The mining industry should be interested in the future of battery technology. Lithium mines are expensive and these investments pay off over 10-20 years. If the primary use for lithium is in batteries, how will these investments be recouped?
Now consider the impact on electric vehicle manufacturers and their supply chains, and the impact on the design of their most critical components. What about consumer products? How will upcoming changes in core battery technology, products and supply chains affect energy utility companies? They will need to recalibrate.
What about the IT and AI industries, which are heavily dependent on large data centers and the battery technology that powers them? The list of businesses that will be severely affected is endless, and the impacts will be significant.
One impact of research into battery technology is far-reaching, and the impact of scientific advances on broad swaths of the economy. What do other developments in science portend? How can we predict these changes and their impacts?
There is clearly an increasing need for large businesses who want to secure their future to monitor a wide range of technological developments. At Everest Group, we believe this can be achieved by monitoring seven key areas of technological development:
Advanced Materials
· chemicals
Energy and Environment
· Telecommunications
Life Sciences Health and Imaging
Microelectronics
Sensors and Instrumentation
By tracking scientific advances in these key areas and projecting timelines for the development of these core technologies, a set of scenarios with corresponding timelines can be established. Identifying key milestones in a technology's trajectory allows progress towards commercialization to be monitored, helping companies build insight and confidence regarding the progress, timeframes, and likelihood of these future technological disruptions.
It's not enough to correctly predict future technological innovations; business leaders must also understand the context in which these future technologies will be introduced. Understanding this context requires building scenarios that incorporate possible changes in the economy, evolving trends in human behavior, new business models, and evolving regulations and laws. These scenarios can be used to evaluate how and when the technology will ultimately become relevant. How will it evolve? What will it replace? How will it thrive and develop? Who will partner with it and how?
This is not an easy or cheap set of capabilities to deploy. Everest Group has built a team of 70 scientists, economists, and scenario planning experts across seven technology clusters. Similar investments may be wise for the largest companies. Others will need to leverage the efforts of companies like Everest Group to achieve the same objectives.
Building and harnessing these capabilities may seem expensive and difficult, but the consequences of failing to anticipate the emergence of disruptive technologies across technologies and industries can be devastating to the long-term viability of any large or established organization.
