Disruptive Technologies - Essay Example

Disruptive Technologies Name Course Name and Code Date Technological advancement and societal changes have introduced different products and services to the market. These advancements have changed the traditional approach in which things were completed. An example is disruptive technology in which Prime Minister Malcolm Turnbull highlighted presenting examples of Uber and AirBnB. Uber offers taxi services while AirBnB offers accommodation services in which resources are shared since voluminous resources remains unused. The aim of the paper is to discuss what it means for technology to be ‘disruptive’ and presents what is ‘disrupted.’ In discussing disruptive and disrupted regulatory frameworks are incorporated. Disruptive technologies create a new value network and new market and disrupt an existing value network and market resulting in the displacement of established market alliances and leaders (Suzor & Wikstrom, 2016). It is ‘disruptive’ because it changes the traditional approach of doing things and what is disrupted is the traditional approach of accomplishing tasks (Belk, 2014). An example is the traditional taxi business in which the taxi drivers either wait or utilize a regulated system to access and engage the customers (Avital et al. 2014). The introduction of disruptive technologies such as Uber has enabled the consumers to request taxi services through a Smartphone application and payments are made through the application (Cohen and Kietzmann, 2014). In the traditional approach, an individual signals a taxi and pays while the disruption has resulted in embracing a different approach to accomplishing the taxi requirements. The approach of offering the services and products changes compared with the original approach (Rauch and Schleicher, 2015). The original approach is acquiring an asset and utilizing the asset for business or income generating platform. The entrance of Uber and AirBnB has enabled consumers and people to share resources (Cohen and Kietzmann, 2014; Uber, 2016). Originally, designed taxis with defined markings and also clearly defined accommodations areas where common but the introduction of disruptive technologies has introduced an approach in which personal or private resources are used to generate income (Avital et al. 2014). For example, an individual is able to utilize their personal cars as taxi through the Uber platform or lease/rent/hire out their personal apartments through the AirBnB platform (AirBnB, 2016). The approach creates numerous regulatory and legislation problems. In the traditional approach of doing business, the government regulates and provides frameworks of operating the business. However, the disruptive technology does not have regulatory frameworks to manage and oversee the business (Avital et al. 2014). For example, taxis were required to obtain permits and fill regulatory requirements; however, the Uber framework enables drivers not to acquire the required regulatory framework, which means the drivers against outside the taxi rules (Belk, 2014). The efficiency of the cars or security matters is not incorporated in the disruptive technologies because the AirBnB approach may attract criminals or persons with negative motives such as killers and kidnappers. The government is not able to regulate the business because the prerequisite registration and documentation are unavailable. Some of the disruptive technologies affect the legislative and revenue generation for governments. For example, the Uber and AirBnB do not pay taxes based on the income generated (Uber, 2016). The traditional approach was for business to register and pay taxes on incomes (Cohen and Kietzmann, 2014). However, the business has been disrupted and a platform, which is by the way internal, collects the money and credits an individual account (Avital et al. 2014). Taxes are not paid in the host countries meaning the traditional approach of taxing has been disrupted. The government is unable to generate revenues from the income and affects the economic and social development of the country. The government monitors and determines the direction of business through formulation and implementation of regulations and legislative agendas (Cohen and Kietzmann, 2014). The disruptive technologies change this approach because precedents do not exist in guiding the business/new approach to business. Technologies keep changing at a faster rate compared to the legislative formulation and implementation (Kane, 2016). In the traditional way, the legislative body determines the manner in which a business operates but the disrupted approach allows the industry to shape itself (Avital et al. 2014). It removes that legitimate role of governments to guide the businesses and create a competitive authority to address any uncompetitive business approaches. From the perspective of the customers, the quality of the services including costs has been reduced (Chang, 2015). For example, these applications have features enabling rating the service and quality of the accommodations (Belk, 2014). The ratings champions’ quality services while reducing costs because the service providers are not required to pay taxes and other regulatory requirements (Uber, 2016). The government faces challenges when it comes to seeking taxes from income generated online because of the payment approaches (Riemer et al. 2015). Nevertheless, the customers’ benefits from the reduced costs of services while enjoying high-quality services and products (Avital et al. 2014). Therefore, the customer’s traditional approach of complaining because of poor services and products has changed because the continuity of service and product provision is dependent on the ratings from the customers (Laurell & Sandström, 2015). It enables the consumers to regulate the service providers through qualifying each service provider based on the services provided (Avital et al. 2014). Hence, the service and product providers with poor quality service or inappropriate customer care may not access the customers. The government creating protecting mechanisms and approaches to these disruptive technologies is important. The government should not view the situation from losing revenues but the overall impact of the technological development (Riemer et al. 2015). In the economics, the multiplier effect is the consequences of a single or group of economic activities. For example, if a party is held in an AirBnB apartment, drinks and beverages will be acquired while people will be employed to provide the services (Avital et al. 2014). Employment opportunities will be created, and these people can utilize the resources to support the economy (Laurell & Sandström, 2015). The government benefits at the end of the day but measures such as controlling and monitoring should be in place to protect the customers from unhealthy and unsafe situations. The government is supposed to understand change is inherent and develops frameworks that guide changes in the technological and operational environment (Avital et al. 2014). For example, the Uber platform has created challenges across numerous cities in the world because of the new competition (Dredge and Gyimóthy, 2015). Evidence exists in which Uber drivers have been beaten by traditional taxi drivers because of competition. Some of the hotels have started utilizing the AirBnB for accommodation purposes (Belk, 2014). These technologies should not be viewed from a negative angle rather create modalities and approaches to capitalize on the service while fulfilling the regulatory requirements. AirBnB and Uber are some of the few disruptive technologies, and other technologies are available in other industries including healthcare and printing. These technologies disrupt the accustomed way of doing things, and concentration in measures to regulate and monitor the industry is important. Formulation and implementation of the frameworks, according to Belk (2014) would prevent the frequent misunderstandings and conflicts between the traditional approach and the ‘disruptive approach.’ The aim is for the institutions to acknowledge the presence of the technologies and create modalities to integrate into the management of the regions (Avital et al. 2014). For example, the 3D printing technology has not affected heavily the printing industry but improved designing, but Uber technology has revolutionized the taxi business (Dredge and Gyimóthy, 2015). The traditional taxi drivers can engage different stakeholders in creating modalities through regulations in incorporating the changing technologies to their respective businesses. In conclusion, disruptive technologies have changed the approach in which business and normal things are done. Uber and AirBnB are examples in which it has revolutionized the transport and accommodation industry. It is disruptive in that the approach of doing things has changed because initially taxi business operated in a specified routes and signaling or through calls was used to engage the drivers. This approach was disrupted in which the prospective consumers request the services through an application and pay for the services through the application. In this case, the disruptive technology is the Uber application and what is disrupted is the taxi business. The government and other institutions are faced with numerous challenges when it comes to monitoring and addressing businesses based on disruptive technologies. The disruptive technologies changes at a faster rate and it becomes difficult to institute regulatory requirements. For example, seeking regulatory filings from people using the individual apartment for accommodation or using personal vehicles for taxi services is a challenge. The government loses revenues during the process, and it is imperative for the government to create guiding frameworks in addressing regulatory and legislative fundamentals when it comes to disruptive technologies. References AirBnB. (2016). Homepage. Retrieved from https://www.airbnb.com/ Avital, M., Andersson, M., Nickerson, J., Sundararajan, A., Van Alstyne, M., and Verhoeven, D. (2014). The Collaborative Economy: A Disruptive Innovation or Much Ado about Nothing? In ICIS. Belk, R. (2014). You are what you can access: Sharing and collaborative consumption online. Journal of Business Research, 67(8), 1595-1600. Chang, W. (2015). Growing Pains: The Role of Regulation in the Collaborative Economy. Intersect: The Stanford Journal of Science, Technology, and Society, 9(1). Cohen, B., and Kietzmann, J. (2014). Ride on! Mobility business models for the sharing economy. Organization & Environment, 27(3), 279-296. Dredge, D. and Gyimóthy, S. (2015). The collaborative economy and tourism: Critical perspectives, questionable claims, and silenced voices. Tourism Recreation Research, 40(3), 286-302. Kane, G. C. (2016). Crowd-Based Capitalism? Empowering Entrepreneurs in the Sharing Economy. MIT Sloan Management Review, 57(3). Laurell, C., & Sandström, C. (2015, December). Analysing Uber in Social Media-disruptive technology or institutional disruption? In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM). Rauch, D.E., and Schleicher, D. (2015). Like Uber, But for Local Governmental Policy: The Future of Local Regulation of the “Sharing Economy”. George Mason Law & Economics Research Paper, (15-01). Riemer, K., Gal, U., Hamann, J., Gilchriest, B., & Teixeira, M. (2015). Digital Disruptive Intermediaries: Finding new digital opportunities by disrupting existing business models. The university of Sydney, Business School and Capgemini. Suzor, N. P., & Wikstrom, P. (2016). The disruptive forces of the sharing economy. The Innovation Paper, 4-6. Uber. (2016). Homepage. Retrieved from www.uber.com Read More