Regulation Struggles to Keep Pace With Digital-Driven Disruption

[Commentary] New, convenient and often cheaper market entrants are encouraging consumers to abandon traditional service providers. Digital disruption isn’t just a consumer story. It is also reshaping how businesses buy goods and services from other businesses.

An Accenture survey of 500 business leaders from 10 economies found that 80 percent planned to pursue growth opportunities outside of their own industry -- in collaboration with other industries, the public sector, or the nonprofit sector. As a result, the approach to regulation that has been built around traditional models of industry -- from telecoms and taxis to banks and hotels -- needs to be adapted to address these emerging “digitally contestable markets.”

As regulators attempt to keep pace with these digitally contestable markets, they will be seeking to not constrain the benefits of innovation or protect existing practice providers from disruption. What may appear today to be a phenomenon led by technology upstarts will become embedded across old and new companies in multiple sectors as they learn to embrace new digital business models at an increasingly rapid rate.

[Robinson and Cooper work for Accenture Institute for High Performance]