Throughout history, significant innovations have changed the status quo, creating completely new industries or forcing incumbents to radically change strategies. The banking industry was changed by the introduction of ATMs, followed by internet banking and more recently, the widespread use of smartphones, allowing banking on the go. Business editor Dene Mackenzie and Craigs Investment Partners broker Chris Timms look at the disruptive innovations now redefining the term ''outside the box''.
There are six potentially disruptive innovations which have the ability to drive growth by either creating a new market, improving the efficiency of current processes or disrupting an existing market, Craigs Investment Partners broker Chris Timms says.
The innovations were now at a stage where they were being implemented within industries, rather than at the early stage of the development cycle.
''We believe a number of these innovations, while already being implemented, have the potential to significantly scale-up in terms of usage.''
1. 3-D Printing - a new layer of manufacturing.
The ability to print custom parts in small lot sizes, with complicated geometries, remained applicable to many different industries and the trend was expected to continue, Mr Timms said.
As a result, additive manufacturing was used in a wide variety of end markets. As the technology developed, it moved further away from the prototype markets and into the functional parts market.
A combination of falling prices for hardware, easier-to-use software with more complex design capabilities, and the internet, had allowed 3-D printing to be used more widely among both industrial companies and individuals.
The average selling price of an industrial additive manufacturing system was about $US70,000 ($NZ80,317) but could cost $US600,000 or more.
''While still in a relatively early phase of implementation, there is genuine scope for 3-D printing to become a viable application in the industrial, design, healthcare, aviation, transport and food sectors.''
Other advances had come in the raw materials, Mr Timms said. And a wider variety of materials, including metals, were allowing for the use of 3-D printers in more industries.
Companies like General Electric and United Technologies used to fabricate prototype parts for their aircraft engines using plastic until they recently moved to 3-D printing for metallic materials. GE used 3-D printed parts in machines meant for medical applications.
''Some of the systems manufacturers also sell materials. The fact these makers have a captive audience is one of the strong points of their business models and helps to explain their high margins.''
2. Digital marketing - billboard in your hand.
By 2017, there were expected to be four billion internet users, up from 1.4 billion today.
The shift to digital devices had not only made everything available at a user's fingertips but also had given advertisers more information about their customers - improving their ability to target specific segments of the market.
As more people had access to smartphones and the internet, it was likely more advertising dollars would be diverted towards digital channels. Research by IDC showed worldwide digital advertising would represent a market of $US167 billion by 2017.
Mr Timms said during the next 10 years, it was likely an acceleration of the shift from PC to mobile would be seen. Total internet traffic growth - measured in minutes - on desktop from 2010 to 2013 in the United States was 4%. Mobile traffic in the same period was up about 500%.
''This is also reflected in the significant declines in PC sales - a trend we expect to continue as consumers shift to smart devices. Platform shifts create new winners and losers and we believe the best-positioned public consumer internet companies are Google and Facebook.''
3. Digital banking - any place, any time.
Digital banking, and more specifically mobile payments, had the potential to drive the next shift in the way consumers paid, he said.
Much of the developed world had seen a shift from paper (cash) to plastic (eftpos cards) and was now poised for the next phase of change.
With high mobile penetration rates in the developed world, easy availability of the internet and advancements in payment security, a large amount of investment was being seen in new forms of mobile payments.
Innovators like Apple, EBay, Square and Stripe were working to connect consumers and their devices to the cloud to drive transactions.
While those firms had the opportunity to grow in the software-based payment market, the large network players, such as Visa and MasterCard, were well positioned, as they remained entrenched in the value chain and access to big data provided an opportunity for value-added services, Mr Timms said.
''Visa and MasterCard will continue to benefit as electronic payment companies continue to use the existing card networks. In addition, since the networks have access to critical payment data, they should be able to monetise the data through value-added services such as geo-targeted offers, coupons and loyalty programmes.''
4. Immunotherapy - redefining cancer treatment.
Cancer was the world's leading cause of death, followed by heart disease and stroke. There were an estimated 14.1 million cancer cases around the world in 2012 with an economic cost of $US200 billion, including $US80 billion for total healthcare costs.
Immunotherapy leveraged the body's immune system to eliminate or slow the growth and spread of cancerous cells. Through significant advances in tumour biology, immunotherapeutic medicines are being designed to make cancer cells more vulnerable to the body's own immune system, while offering the patient fewer side effects.
Several pharmaceutical companies were working on developing checkpoint inhibitors to detect and attach to specific proteins in the body's immune system - turning them off so the immune system was able to identify and target the cancer cells.
Key players in the immunotherapy market included Bristol Myers-Squibb, Roche, AstraZeneca and Merck.
5. Precision agriculture - the delivery of just the right amount of input at just the right time in just the right place.
Precision agriculture revolved around the applications of new technologies to the day-to-day management of farms or crops and was focused on improving long-term production, efficient productivity and profitability, while minimising the unintended impacts on the environment.
While it was not a new concept, the wireless capabilities and technology involved with collecting, interpreting, sharing, transferring and managing the information had improved significantly in their speed, simplicity and effectiveness over time, Mr Timms said.
Software was available to track and analyse the soil, crop yield, water and fertiliser needs of each plant and also organise it into a system to help a farmer make a plan for future planting.
The systems also equipped tractors with GPS, allowing the machine's onboard computer to drive it across a field and plant seeds or apply fertiliser ideally for each specific location.
On the farm, that had led to a reduction in input and labour costs, increased production and the improved utilisation of land and water resources.
In the US, which currently had the highest penetration rates for precision farming, the precision agriculture market was estimated to be worth up to $US2 billion a year and was projected to double by 2018, as second-generation products were commercialised, he said.
In North America, and other advanced agricultural regions like New Zealand, Australia, Europe and Latin America, farmers were seasoned users of first-generation products including GPS-related equipment, yield mapping, soil sampling and mapping and fleet management.
In recent years, agriculture-related companies and universities had been developing second-generation products, such as localised weather services designed to provide field-specific temperature and precipitation projects, allowing the farmer to schedule daily activities based on weather.
6. Robotics - new innovations in automation.
The use of robots was already strongly entrenched in the manufacturing industry, usually undertaking tasks seen as too difficult or dangerous for humans, Mr Timms said.
Through large technological advances, and a significant drop in the costs of creating robots and automation equipment, the capabilities robots now possessed could open up new markets.
There had also been a large increase in interest from a financial sense, including acquisitions.
Research firm McKinsey & Co estimated the application of robotics across healthcare, manufacturing and services could generate a potential economic impact of $US1.7 trillion a year, rising to $US4.5 trillion by 2025.
According to the International Federation of Robotics, China was set to become the largest industrial market for robotics by 2016.
Reasons for that included the significant increase in labour costs, a peak in the working population and a trend towards higher-skilled, higher-paying jobs over factory labour.
The healthcare market was estimated to become one of the largest markets for robotics and automation, he said.
