How digital acceleration can help you out of the downturn

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Wiktor Schmidt, Executive Chairman, Netguru

• After a turbulent few years, we’re entering an economic downturn with a slowdown in the investment market, as growth for the sake of growth is no longer viable, and profitability returns as a priority.
• Digital innovation is still necessary, as plenty of untapped opportunities exist to solve actual problems, particularly in sectors like agriculture, education and energy.
• Using a new approach to innovation called digital acceleration, companies can continuously leverage a little bit of technology to make a huge difference.

The tech industry is at a transition point. Investors and market incumbents have been typically attracted to growth, however, the media has been awash with tech business scandals that suggest it will take more than rocket-ship advances, as seen during the big tech boon of earlier years, to launch a viable and sustainable tech outfit.

Simultaneously, the ambition to build a new and decentralized internet has seen vast amounts of money go into cryptocurrency and NFT markets, yet sufficient safeguards have not been able to match this wave, making them susceptible to scams.

The problems with such a religious commitment to growth as seen previously are not lost on investors and C-suite executives either as they know that hype isn’t necessarily a good thing if you want to invest in, or build, a profitable venture that will stay on the market for years to come.

Now, we’re amid a seismic shift in the global economy. Entrepreneurs can no longer rely purely on investment capital and must build healthy business models that finance their growth through sales and customers. Investors are turning their gaze towards companies that may not be hype-worthy but create meaningful change, have solid fundamentals and provide a rational perspective for future growth and profitability.

Less hype, more change

For 12,000 respondents in the Markets of Tomorrow Report 2023, agriculture, education and energy are the three most important areas for technological innovation. That’s not to say you should drop everything and enter these markets. But, this goes to show that solving problems impacting humans right now could be a better business opportunity than more futuristic visions of a digital tomorrow.

Global top 10 technologies of strategic importance. Image: World Economic Forum

Current market volatility has created the perfect conditions to innovate and capture more mainstream streams of revenue in ways that are locally global, sustainable and environmentally safe.

One particularly exciting vertical is climate tech. Reducing pollution and healing the environment would bring vast benefits to all of us. Data from the World Health Organization shows that 99% of the world population breathes polluted air, which contributes to 6.7 million premature deaths every year. Pollution reduction alone would contribute positively to the physical and mental health of every person on the planet, improving our well-being and productivity.

We’re already heading in that direction but sometimes it feels that we could be doing much more, much faster.Clearly, there’s a need for meaningful innovation. However, the old approach won’t work anymore and we need a new playbook to innovate while protecting our bottom line.

Innovation’s new playbook – digital acceleration

Digital transformation is out and digital acceleration is in. Established companies are so bogged down with red tape and complex processes that a simple decision can take months to be approved. In some cases, the red tape is justified. You don’t want to rush things when life is on the line.

That’s not the case for most companies. More often than not, innovation faces pushback due to risk aversion and an incomplete understanding of the digital landscape. It doesn’t have to be this way.

That’s where digital acceleration comes in. It takes away the all-or-nothing mentality and offers a step-by-step approach to innovation while driving tangible results – delivery optimization, increased speed-to-value and de-risking every step of the way.

The basic elements of this approach are:

• Smaller initiatives and short iteration cycles
• Testing and gathering data instead of operating on assumptions or hypes
• Surgical approach to innovation rather than massive transformation projects
• Rapid time-to-market with short customer feedback loops
• Simultaneous and continuous decision-making, discovery and delivery as opposed to a sequential transformation with a multi-year plan
• Restless experimentation aimed at finding digital answers to pressing challenges

The barrier to developing digital products is lower than ever, so better tech alone is not enough to ensure a competitive advantage. To lead the market, companies need to be smarter about how they innovate, how much risk they take on in the process and how they leverage a little bit of technology to make a huge difference.