Conventional Industry Sectors
These days, few people expect to work for a single company throughout their career. But what about the expectation that companies will remain in one industry forever? Is that, too, becoming an artifact of the past?
In a new PwC report called “The Future of Industries: Bringing Down the Walls,” we look at how the boundaries among sectors are shifting. The pace of technological change is creating at least the prospect of a new industrial order, in which most companies no longer operate within the comfort zones of their established sectors. Already, a few companies (Apple, Amazon, and GE, among them) have boldly and successfully moved into new industries. Now just about every other company will have to do business that way.
Consider the telecommunications and automobile industries. Until the past few years, a telecom company based its business primarily on routing calls and data. But now, almost 25 years after the launch of the World Wide Web, telecom companies have become entertainment content companies. Technological change has taken them across industry borders.
Many expect a similar transformation to unfold for automakers. After more than a hundred years of selling cars, automotive companies are eyeing a future where they’re facilitating mobility on demand. Consumers will order cars from mobility services to suit their immediate needs: a spacious wagon for a weekend away with the family or a microcar for a solo trip into the city. Add in the driverless dimension and the potential for car-sharing, and it’s not difficult to see a future where owning a car becomes the exception rather than the rule.
Meanwhile, the century-old electric utility industry is at the nexus of an emerging business category that could be called “smart infrastructure.” It starts with wiring homes for security and temperature control, and expands to embrace a diverse range of integrated and automated services, including lighting, music, and locating misplaced items. The power utilities that provide this type of product and service — alone or in collaboration with one another — will also operate at a broader scope, that might cover larger-scale energy management, monitoring of building maintenance, city resource management, transportation efficiency, and eldercare. These will all take advantage of the same software solutions and analytics. The utilities have the potential to capture several new sources of value in this future, but they should expect to face strong competition from other players, including new entrants.