“In 1900, less than 10% of families owned a stove, or had access to electricity or phones, and the Model-T was still a full decade away”, from The Atlantic“The 100-Year March of Technology in 1 Graph” by Derek Thompson.




The rapid change in the consumption of technology is overtaking Moore’s Law as the most talked about rule.  Quite simply, over the last decade there have been a significant number of advances in consumer technology and what we have seen is the ever increasing trends in consumption patterns surrounding these new technologies.  The chart detailed in the article by Derek Thompson highlights this ever increasing change in the adoption pattern of technology over time.

From a risk perspective this is extremely critical to understand. In order to explain that statement let’s go back in time and consider the introduction of electricity.  Electricity, the domain of brilliant men like Thomas Edison, Nikola Tesla, and George Westinghouse, was considered an amazing technology that would revolutionise the world.  And it did.  From the early 1900s electricity was the most innovative and life enhancing product, and it changed the way we live.  In actual fact, both electricity and the telephone are most likely the worlds most two important digital inventions, yet their take up rate, in terms of consumers, are the slowest in history.

From a risk perspective in the year 1910, this would have been the number one emerging risk for industries which in that time provided gas lighting, steam power and any industry that worked in a mechanistic manner.  However, as an emerging risk, these organisations had almost 30 years to adapt, because it was not until that time that at least 60% of the population had electricity.  This meant that Executives, Boards and Management could take time to understand, analyse, assess and then implement strategic and operational responses.  The slow take up of technology at this time was due to many factors but not the least being that the scientific knowledge, both in the individuals developing it and also in those consuming it, was still as much in development itself as the new technology.

Now let’s jump forward in time and consider the most modern consumption trend in the chart, the internet.  The internet has achieved over 60% spread in under 15 years.  Today, in the year 2012 almost all us use the internet in some form, whether directly through our own devices or indirectly through those we interact with, that process our transactions, on their devices.  But it wasn’t always that way,  it did take some time fro people to get a deep understanding of the benefits of this new technology.  However, it still achieved a penetration rate almost twice as fast as that of electricity.  And the chart highlights a number of other technologies, such as the personal computer, the cellphone, the VCR and the microwave that all exhibit similar adoption trends.

Again, from a risk perspective in the year 1995, this would have been an emerging risk for industries which in that time interacted with customers physically in any way, shape or form.  However, as an emerging risk, these organisations had almost 10 years to adapt to this new technology.  In the case of the internet, it almost seemed in early 2001, that with a bubble bursting, that it was a fad and therefore was less of a concern.

Now, let’s come back to today, 2012.  Where we see the emergence of technologies such as the iPad, Facebook, Instagram, Pinterest, and Twitter.  How do these look now from a risk perspective?  Do we have 30 years to act?  How about 10 years?  Or are we looking at a response time of 5 years?  Or even less?

This is the speed of adoption risk.  And if you get this risk wrong, you may not, as in the past, be looking at a need to change your direction slightly, or even just have to consider embracing the technology, but you may be looking at outright bankruptcy.  Let’s all consider the current situation for book retailers in Australia and around the world.  There are other ways to adapt, by finding that unique segment, but if you have aspirations for growth across the globe, you may need to think again.

So, if you are an Executive or manager who has “grown up” through the 1960s, 70s, 80s and 90s, you may want to reconsider your thinking on technology.  The past is a great model for helping make future decisions, but only if you truly understand what it is telling you.  So, that thing you think is a fad and will pass, perhaps should be reconsidered in respect to the speed of adoption risk.  We all can imagine that when someone thought of the shopping centre, there were many people that said it would never succeed.  Perhaps we all should be considering this thinking when we make comments on these new technologies.

Scott North has extensive executive and board experience in risk management, internal audit, operational risk and compliance, governance, risk strategy, scenario planning, technology risk, technology architecture, systems design, financial accounting, and management accounting. With Chief Risk Officers roles across financial services in Australia, Scott is an accomplished and experienced senior risk executive with extraordinary results in leading risk management teams. An innovative and process-focused leader, with an entrepreneurial style. Scott has a passion for innovation and digital. Scott is an experienced project leader across multiple disciplines including risk, finance and enterprise systems.