BOP across the G8 is a great opportunity and low hanging fruit for creative destruction

Often BOP conjures an image of emerging economies in Asia, Africa, Americas, etc. However the BOP in the G8 is a great opportunity of un-served markets due to current business models and where the next disruptive changes will emerge from.

The “Mortality” challenge for established business, or is there anything as established?

Let’s look at three key resources, Fortune, S&P and Forbes. Some startling statistics reveal the nature of creative destruction.

From a very interesting report titled "Business Model Warfare The Strategy of Business Breakthroughs", by Langdon Morris Senior Practice Scholar, Ackoff Center for the Advancement of Systems Approaches (A-CASA), The University of Pennsylvania
An InnovationLabs White Paper, prepared & published jointly with A-CASA.

www.innovationlabs.com/BusModelWarfare.pdf

Extracts from the report:

“The Fortune 500
.......A research study done by Shell in 1983 found that one-third of the companies listed among the 500 in 1970 had not only fallen from the list, but had gone out of business altogether. That’s an average mortality rate of 12 companies per year, or one per month. They also found that a multi-national corporation comparable in size to a Fortune 500 company could only be expected to survive for between 40 and 50 years......

The Forbes 100
............Over the seventy year span, one company per year disappeared........

The S&P 500
...................By 2020, more 75% of the S&P 500 will consist of companies that
we don’t know today......................”

Let's take a look at healthcare in the United States as a case study ripe for innovation and creative destruction and look at the others likewise. While the United States spends more on health care than any other country in the world whether in GDP or PPP metric there are almost 50 million Americans who do not have access to quality healthcare services. Current estimates put U.S. healthcare spending at approximately 15% of GDP, the world's highest and estimated to reach over 19% of GDP by 2016.
In the United States, around 84% Americans have health insurance, through their employer, purchased individually, or provided by the government. Health insurance is expensive, and medical bills are overwhelmingly the most common reason for personal bankruptcy in the United States which is interesting.

http://en.wikipedia.org/wiki/Health_care

So why is healthcare an example of creative destruction waiting to happen and now everyone from Silicon Valley startups to the Google’s and Microsoft’s of the world in the ICT industry to HMOs and other allied industries looking at this vast opportunity?

Gaps:

Fragmentation of Consumers and Service Provides: Over a quarter of all personnel in the health care system today perform administrative tasks, not providing care to consumers.

Financial and Insurance business models:

Industry Structure:

Inefficiencies in Healthcare workflow and systems: A staggering $480 billion a year on administration alone—more than 30 cents of every dollar spent on care

Consumer literacy:

Industry evolution:

What does this lead to. A ripe opportunity for the next wave to come for "Creative Destruction" to emerge and from the bottom up and change the industry economics of access and delivery of QOS in healthcare.

http://fellows.rdvp.org/node/1961

Thus the G8 represents a great opportunity for entrepreneurs, investors and networks of people with ideas to leverage.

How? A lot can be accomplished with today's technologies and tomorrows business models.

Industries ready for creative destruction are;

• ICT
• BFSI
• Retail
• Healthcare
• Telecommunications
• Education
• Entertainment
• Automotive
• Energy

To name a few.

Why all of the above is important? Because creative destruction is inevitable and Darwinism plays out fast. Creative destruction a la Joseph Schumpeter, which describes the process of transformation and change that goes along with radical innovation and how the forces of innovation and entrepreneurship sustained long-term economic growth, while destroying the value of established business models and companies that enjoyed some degree of monopoly in markets and across industries. This is what makes this next wave very exciting and interesting. Then from the G8 BOP, you go to the next BOP markets globally.