Daily Management Review

Technology development endangers a number of industries


Jump in technology always lead to global changes in the labor market. Some professions become obsolete, and industries radically change. Financial Times told about industries that will suffer the most in the next five to ten years.

In recent years, development of technology has resulted in two notable trend in the world of cars. First, the economic crisis and people’s desire to save facilitated market launch of electric vehicles. Then, manufacturers focused on creation of unmanned cars that should help to cope with deaths on roads. At the same time, both have already had the most noticeable impact on the industry, writes the Financial Times.

Unmanned vehicles are supposed to improve safety on the roads. Ideally, mass distribution of self-driving cars should reduce number of cars on the road. This, in turn, will solve the problem of traffic jams in big cities, and will virtually eliminate fatal accidents. Certainly, such prospects should please everyone but insurance companies. Absence of road accidents means death for them.

Car insurance is one of the pillars of the industry. According to Morgan Stanley and The Boston Consulting Group, this market has reached $ 200 billion, with annual revenues of insurers is $ 17 billion. Less frequent accidents mean that demand for insurance will drop. Experts predict that the volume of this sector could be reduced by 80% in 2040. In addition, part of the market will be seized by automakers and industrial companies, who themselves will offer insurance.

As for electric vehicles, not only they are cheaper to maintain and more fuel-efficient than diesel and petrol cars. Among other things, they actually have nothing to fix due to absence of moving mechanical parts (except for wheels). So, such cars will not need an auto mechanic. Besides, ubiquity of electric cars is unlikely to be good news for dealers, earning mostly on sales of spare parts.

Another technology that can rewrite rules of the game throughout the industrial sector is 3D-press. Major companies around the world are increasingly paying attention to benefits that 3D-printed production can bring. Now, this production method is not very effective on a commercial scale since it is still too expensive and takes too much time. However, now manufacturers have resorted to this technology for creating exclusive products or prototypes. In the future, when the 3D-press goes into massive production, companies will be able to produce components for their goods instead of purchasing them from third parties. Thus, according to Bosch Rexroth’s assessment, manufacturers will print 40% of spare parts and consumables in five or ten years. 

Financial advisors are under threat to disappear, too. Investors will still need assistance in asset management, but without help of other people, who may well be replaced by robots. Precisely, there will be websites that suggest a portfolio of possible investments based on the investor's responses in the questionnaire. There are advantages: the customer does not have to go anywhere to meet anyone, and the service itself is much cheaper. Many large banks and companies have already resorted to them, and Citigroup believes that this market will reach $ 5 trillion in ten years.

source: ft.com