New business models, big opportunities: technology / manufacturing


A survey of 297 executives worldwide, conducted by MIT Technology Review Insights in collaboration with Oracle, found that 70% are frustrated with their companies’ ultimate goals for 2021, e.g. Do it differently.

The iconic manufacturer of agricultural and construction equipment is building a new operating model with technology as the company’s hub. For example, the tractors it sells today collect data on their activities and help farmers complete tasks such as planting with accuracy. This is one of the big trends – big business changes like new business models, mergers and acquisitions and huge automation that companies are creating or planning in a landscape changed by the epidemic.

A story of two industries

Each industry has unique features. Of course this is true in the case of technology companies, which are rapidly transformed by their nature. The industry is initially embracing new technologies, says Mike Saslavsky, senior director of Oracle’s high-tech industry. Most technology products have fast and short life cycles: “You have to be with the next generation of technology,” he added. “If you don’t transform and grow your business, you’re probably out of the market.” This premise applies to a wide range of businesses categorized as “technology” from chip makers to consumer devices to office equipment such as copiers.

The manufacturing tradition has historically maintained a more complex relationship with technology. On the one hand, the industry is trying to be flexible and resilient in an unstable presence, said John Barkas, group vice president of Oracle’s industrial strategy group. Geopolitical issues such as protectionism make it harder to deliver the right materials for products, and the lockdowns imposed during an epidemic create more supply chain issues. This has led to greater adoption of cloud technologies to connect partners, track products and stream streams.

On the other hand, the industry has a reputation for short-term thinking – “If it works right today, I can wait until tomorrow to fix it,” Barkas said. This shortcoming is often understood by cash-flow problems and risks associated with tech investments. “And then suddenly there were some new hits for which they weren’t ready and they had to react.”

There are shining examples of what producers can do. For example, global auto parts maker Optive cut its powertrain business in 2013 to focus on high-growth areas such as advanced safety technology, integrated services and autonomous driving, says David Liu, who was in the corporate strategy until January 2020. (He is now the Director of Corporate Development at General Motors.) In 2012, Motial formed a উদ্যোগ 4 billion autonomous driving joint venture with Hyundai to develop and commercialize the Optive Autonomous Vehicle. Liu says the epidemic forced the financial discipline into an uncertain “black swan” event and to imagine and resist, in order to do big things. For example, in June 2020, the company plans to earn its future growth through investments and potential acquisitions. Has issued 4 billion in equity. “The key for us is to balance operational focus and long-term strategic thinking.”

Drive behind the plan

Among the survey respondents, the most planned major initiatives were technology investment (60%) and cloud migration (4 %%), accounting for more than a third of business-affiliate plans.

In the technology and manufacturing industries, the business of digitizing has more promise, and the companies that did it before the epidemic occurred were better prepared to deal with it. For example, Barkas noted that they had technology to allow their employees to work from home. In fact, the crisis accelerated those efforts. Whatever their progress, he said, “If many of them aren’t most of them, now they’re looking at, ‘How do I prepare and succeed in this new environment?’

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This content was created by Insights as a custom content of MIT Technology Review. This is not written by the editorial staff of MIT Technology Review.



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