"Change is more rapid and unpredictable in technology relative to the broader economy."
One little talked about mistake a large number of business leaders make is in how they relate to technology. Some look at it as the "savior" of business and others the greatest thing since the printing press. Not many think in terms of how it works in the overall scheme of things.
While technology is obviously a huge boost to the productivity of a business, I don't think it will ever again be a differentiator for a business.
Having said that, it obviously will if a business refuses to keep up with the technology that helps any company run better. From that way of looking at it, if technology isn't adopted, it definitely could hurt most businesses.
The question becomes how it makes a difference from a competitive advantage if everybody has it? The answer is that it doesn't.
Of course you could have technologies which could be patented and temporarily give some advantage to those that are producing it, but a similar technology that doesn't conflict with the patent will come right behind it. So for the producers it's a temporary lead, and for users anybody can use whatever's on the market at the time.
Warren Buffett won't invest in technology through Berkshire Hathaway (BRK-A) for the reason he can's see any long-term competitive advantage from investing in it.
When you translate that to business usage, the same thing applies: a durable advantage can't be seen from using it, only from a competitor not using it; which probably all will.
Why talk about this? Those who fall in love with techology for technology's sake, risk missing the much more important aspects of their business that offer the real competitive advantage.
We must be careful of thinking technology will differentiate our businesses: it won't! Everybody has access to and will use technology. It's a tie, as far as that goes.
While we must keep up with the rapid changes happening in the technological field, as it relates to our businesses, we must also realize that all great companies will be doing the same.
The temptation to respond and adopt technology can leave us with an illusion that we're going forward with our businesses as it relates to our competitors, when in reality we're only matching them.
It's still our unique purpose and business culture that will remain our competitive advantage. Techology just helps us all do it a lot better.
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