Date Published: May 2018 (10 Min Read)

The world we live in is changing rapidly. Much of this is being caused by disruptors, who are affecting the way that we live, the way we shop, the make up of our towns and cities, and the cars on our roads. Professor Clayton M. Christensen of Harvard defines disruptors as those who establish new market places and displace the old.

The internet is the biggest disruptor of all, and in the retail space, Amazon is one of the biggest names in the western world. The speed with which Amazon has grown is phenomenal, and its impact can be widely seen. For every item bought on Amazon, a traditional high street retailer has potentially lost that sale. Where has Woolworths gone? What has happened to the booksellers on the high street? Where are all our traditional music retailers? The answer is probably that they have all gone into administration. The impact on the high street has been only too obvious. A lot of shops are now boarded up, or have closing down signs in the window. Many have been replaced by coffee and charity shops – changing the nature of the traditional high street.

You only have to ask a London cab driver “how is business?”, and you will get a tirade about Uber and how it has affected the traditional cabbie. Uber is cheaper, extremely efficient and for the most part safe. Popular in London and UK cities, Uber has become a feature of modern day life. Unless there is a big change in regulation, it would appear that Uber will continue to gain market share to the detriment of traditional black cab drivers.

Thinking about other industries leads us to a similar conclusion. Traditional estate agents are being replaced by online alternatives like Purplebricks, terrestrial TV viewing is being replaced by Netflix and travel has been completely changed by the likes of easyJet and Airbnb. There are plenty more, and I could go on, but you get the picture.

Here at GBIM we take note of these changes, and support investments and fund managers who are cognisant of these paradigm shifts in our everyday lives. The reality is disruptors will continue to grow in strength and challenge industries where the traditional business model is under pressure.

Astute investors need to understand the changes taking place, aiming to back the winners and to avoid the losers. Sadly there will be many businesses which fail to keep up with the pace of change.

Article written by
Oliver Findlay