Companies Pursue Cross Sector Growth as Digital Technologies Dissolve Traditional Industry Boundarie

The FINANCIAL — As the global economy continues to recover, a majority of companies intend to pursue growth opportunities outside their own industry sectors as digital technologies help create new higher growth markets, according to new research by Accenture.

The research also shows that most top executives believe the ability of new digital technologies to dissolve industry boundaries is the most important structural shift businesses will face over the next five years. 

While the core healthcare sector in the United States is expected to grow at 2.5 percent annually between 2012 and 2018, the impact of digital technology (e.g. remote diagnostics, electronic records management) will help drive annual growth of 3.3 percent in the broader market for staying healthy, according to Accenture.

The UK’s core financial services sector is projected to  grow at 2.0 percent per year between 2012 and 2018, but the wider digitally contested ‘paying’ market will experience annual growth of 2.9 percent, thanks to digitally enabled trends such as crowd funding, peer-to-peer lending services and virtual wallet applications.

Germany’s retail sector is expected to grow 1.6 percent annually between 2012 and 2018, but the wider digitally contestable ‘shopping’ market will enjoy growth of 2.6 percent per year, due to trends such as real-time pricing, e-commerce platforms that enable consumers to become retailers and online sharing and bartering services, according to Accenture.

The aggregate value of three digitally contestable markets in 2018, alone – shopping, paying and staying healthy – will be US$5.9 trillion to the U.S. economy, €747 billion to the German economy and GBP£519 billion to the economy of the UK.
 
Despite recognizing the fundamental shifts taking place within their own industries, only 38 percent of the executives surveyed said that these shifts would be the primary driver of their company’s strategy, while 60 percent said their strategy will be influenced most by broader economic conditions, according to the report.