The new disruptors

The new disruptors

Why CIOs should care that the smartphone is cutting out middlemen.

The Rapid growth in smartphone penetration is creating an ever connected workforce relying less on middlemen to conduct business transactions, says futurist and inventor Mark Pesce. This is a trend CIOs will need to watch out for as larger companies compete with leaner startups moving in on their turf.

Speaking to a group of over 70 CIOs and IT managers at a CIO Breakfast event, Pesce predicts the century old labour model that is most prevalent in New Zealand will gradually be broken into smaller gigs, and smaller still tasks.

These gigs and tasks will be created and undertaken using smartphone apps, leaving established companies which would usually work as intermediaries in a vulnerable position. We are already seeing this with freelancers and contractors, but it will only become more common, he says.

This message resonates with New Zealand, where according to research by Google and IAB, smartphone penetration is estimated to be at 44 percent this year.

Pesce points to Uber as an example of a disruptive startup using this aggregated labour. In the US, and several other countries, it is illegal for limo drivers to pick up fares that have not been pre-booked. Uber connects limo drivers with paying customers by letting them book their fare using the Uber smartphone app. This nominal act is within the law, but gives the limo drivers access to lucrative serendipitous fares they would otherwise have lost to taxi companies. For its services Uber takes a cut of the fare.

Pesce says similar services are popping up in Australia’s mining towns. These areas are usually cash-rich, but have their labour pools tied up in mining. Low friction labour services like Uber, Airtasker, and others let people who would otherwise be out of the workforce supplement their incomes with short-term tasks or gigs.

“Think of the smartphone as a recruiter, where you’re bidding for talent and services,” says Pesce.

These services can be developed in three months or less by small companies, and need a very small amount of infrastructure and capital to run - making it difficult for larger organisations to react to.

The smartphone is likewise changing the landscape for finance sector, as banking’s smallest functions have been taken up by other connected businesses, which often do a much better job says Pesce.

New Zealand businesses will face similar competition from startups and smaller, leaner players better able to react to the current pace of technological change.

The CIO Breakfast, sponsored by IBM, was held to mark the worldwide launch of PureSystems as part of IBM's new Expert Integrated Systems division.

PureSystems is the result of $2 billion in research, development and acquisitions over the last four years, says Alan Waite, national manager of Expert Integrated Systems in Australia and New Zealand.

The expert integrated systems combine both physical and virtual elements of IT enterprises, he says.

Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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