It is not only Ambani’s companies, every industry is about to be disrupted

With the advent of Jio and the falling price of mobile data, the telecom industry is already reeling from debt. But even Mukesh Ambani isn’t ready for the next round of disruptions, which will decimate his advantage. SpaceX has just launched a pair of broadband satellites that can beam Internet signals down to earth from low orbit. After it perfects these, it plans to encircle the globe with 12,000 of them, bringing the cost of data close to zero.

SpaceX isn’t alone. Google, OneWeb, Facebook and many others are racing to provide Wi-Fi Internet access everywhere through drones, microsatellites, and balloons. At first, they will use the telecom companies to provide their services; then they will make them irrelevant. The motivation of the technology industry is, after all, to have everyone online all the time. Their business models are to monetise data rather than to charge call or access fees. They will also end up disrupting electronic entertainment — and every other industry that deals with information.

This is the new nature of disruption, in which the competition comes out of nowhere and business models change. Industries encroach on one another, and the impact is global. The incumbents in every country are not ready for this; as a result, the vast majority of today’s leading companies will become what I call toast. And it will occur within the next decade.

What is enabling this is technology’s exponential advancement. Our smartphones already have greater computing power than yesterday’s supercomputers. Every technology with a computing base is advancing on an exponential curve — including sensors, artificial intelligence, robotics, synthetic biology and 3D printing. They are becoming smaller, faster, and cheaper. At the same time, they are converging in ways that enable them to wipe out entire industries in favour of new ones.

Indian companies have become global powerhouses. Their business executives have become confident and assertive. Yet they are unprepared for the looming changes. The only good news for them is that neither are the executives of the companies in America that are creating the technologies; they, too, have been blindsided.

Google and Microsoft did not expect that a book retailer, Amazon, would become a competitor in their highest-growth market, cloud services. Apple could not have imagined that Amazon’s Alexa would leap so far ahead of its voice assistant Siri and become a threat to its business. Google surely did not expect Amazon to begin to dominate product search. And the retail industry was not prepared for Amazon to break the barriers between the digital and physical realms, setting up cashier-less supermarkets and acquiring a retailer, Whole Foods Market.

For that matter, the global taxi industry never imagined that a Silicon Valley startup, Uber, would become its greatest threat. Telco providers never dreamed that some smartphone applications, WhatsApp and Skype, would decimate their text and mobile revenues.

It is always technology convergences that create the industry disruptions.

Uber became a threat to the transportation industry by taking advantage of the advances in smartphones, GPS sensors and networks, and their convergence. Airbnb did the same to hotels by using these advancing technologies to connect people with lodging. Netflix’s ability to use Internet networks and artificial intelligence put Blockbuster out of business and is allowing it to become a dominant player in entertainment.

Every industry will be affected, including energy. Industry experts say that after decades of development, solar generation hardly supplies 1% of the world’s energy needs, so it is no threat to fossil fuels. They say that solar is inefficient, too expensive to install, and unreliable, and will fail without government subsidies. But the price of solar-generated energy has fallen by about 99% over the past four decades. At the rate at which solar generation is advancing, within 15 years it will be nearly as cheap as sunlight.

With electric cars becoming cheaper and more capable, demand for petroleum will decrease, causing oil prices to fall to $20 a barrel or less. I expect this to happen by 2025. This will surely boost the economies of India and China and decimate the oil producers. Imagine the impact on Ambani’s oil refineries when there is a massive shift away from fossil fuels.

In reality, practically every industry is about to be disrupted, and entrepreneurs who lead the disruptions will have the opportunity to dominate the trillion-dollar industries that will result. But they need to learn fast and seize the moment.

Vivek Wadhwa is a Distinguished Fellow at Carnegie Mellon University at Silicon Valley and author of The Driver in the Driverless Car: How Our Technology Choices Will Create the Future.

The views expressed are personal