UK business leaders expect to be hit by “significant digital disruption” by 2018

46% of respondents say their senior leaders are unwilling to disrupt their existing business models to grow and compete

50% of UK business leaders are afraid that their industries will face significant digital disruption within the next two years, according to Microsoft’s Digital Transformation: The Age of Innocence, Inertia or Innovation? study.

While 44% of respondents claimed they expect their business models will cease to exist within the next five years, 46% said the senior leaders of their organisations are unwilling to disrupt their existing businesses to grow and compete.

This anxiety is most pronounced in the financial services sector, where 65% of respondents fear the impact of digital disruption in their industry, with 33% believing the biggest threat is from new market entrants – this is compared to 10% in retail and manufacturing.

However, businesses in the financial sector – which employs 2.2 million and contributed £66bn in taxes to the UK economy – are more likely to plan for the future, with 64% claiming to have a formal digital strategy in place.

The public sector appears to have been the slowest to adapt to digital technologies, where only 35% have a digital strategy in place and 26% have no strategy at all. Just 35% of respondents from the public sector believed their management team to be digitally literate.

51% of all business leaders were concerned digital transformation will impact privacy and security, with those in the public sector the most worried (56%), followed by financial services (48%) and retail (47%).

33% of respondents thought older generations will get left behind, increasing to more than 40% in retail.

Nicola Hodson, general manager of marketing & operations at Microsoft UK commented: “New challengers, many who are digitally savvy start-ups, are disrupting established markets by deploying new technologies quickly, and luring expectant customers away from established competitors.

“For many larger organisations, the challenge is how to react to this market disruption in a considered way and how they maintain competitiveness in a rapidly shifting landscape.”


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