Without a doubt the 21st Century has belonged to start-ups. The giants of Silicon Valley are so successful the stories of ‘making it’ have been committed to film by Hollywood.
Beyond the films and the biographies the reason ‘geeks’ have become cultural icons is thanks to the technology space taking the financial industry’s crown as the industry for ambitious graduates. Having lived through financial industry turmoil, the bright young things of today dream of building the next LinkedIn and cashing it in for $26.2 billion, rather than trading stocks and shares.
The rarity of a new-build
Thanks to a bonanza of venture capital financing in recent years, more dreams and ideas from start-ups have been created to drive innovation forward, whilst large corporations steadied their ships after the financial crisis. The finance industry is the perfect example of this happening. Financial technology aka fintech, has redefined how nearly all financial services are performed. Take Tandem Bank in London for example who understands that near ubiquitous smartphone ownership allows consumers to access retail banking services from their pocket. By 2020, this will be the dominant way to bank.
The rate of change continues at a phenomenal pace, built on the foundations of major technological advancements such as increased bandwidth and lower cost of providing Internet services to an ever growing number of users. We currently live in a time between two distinct approaches to productivity. Where industrialisation and services relied on huge numbers of manual labour, the demands of jobs created from that era are now being automated. What is exciting is to witness the innovations of humans in labour markets creating the professions that today don’t exist. The beauty of innovation is that as it continues, the innovations of old are replaced by better methods.
Trying to predict the innovations of the future is a futile exercise, because real innovation can’t be seen until it happens. More often than not founders, investors and journalists alike refer to iterations as innovations.
Embracing everything to iterate
Innovation can thrive anywhere and often the very best innovations come from places that are culturally different to the much vaunted Western tech hubs. However all great ideas need financing. Be it in universities or from an entrepreneur, investment fuels ideas and enables an idea to be made a reality. As stated earlier, Internet connectivity will be a key driver to realising potential. Investment will only bring more people towards global connectivity and this has the power to create major cultural shifts in regional locations.
The travel industry is a perfect example of innovation and iteration. The high street travel agent who used to recommend their preferred supplier, saw their business innovated by the Internet and became dominated by the online aggregators. Now the aggregators are losing hotel business to the iteration that is AirBnB as travellers prefer to rent holiday services direct from other people. AirBnB itself will certainly foster more iterations such as hosts using digital locks on their property and allowing renters to unlock it via an app. Physical locks and keys are anachronistic in the digital age. The path of the future is clear, all inefficiencies will be eaten by software.
Search ‘innovation’ through your preferred search engine and you’ll receive hundreds, if not thousands, of articles and stories each day. Yet if you audited each use of this word I’d be confident that more often than not iteration would be the more appropriate term. This isn’t to dismiss iterations, but it’s invaluable to define the difference. Iterations will continue to attract investment and generally improve the way we live. But those innovations, when they happen, will fundamentally change the lives of billions.
Christian Miele is a vice president at e.ventures.