Chris Styles

In early June, taxis in London, Paris, Berlin and Rome protested against the tech start-up, Uber. The protest hit Washington on June 26.

Uber allows customers and private car-owners to find each other via a smartphone app, providing an alternative to a traditional taxi service. Taxi drivers and owners think it unfair that new business models, such as Uber, are allowed to effectively bypass regulations, lower barriers to entry, undercut prices, and as a result substantially lower the value of expensive taxi licences.

The real story behind Uber – and companies like it – is that it has found a more efficient, higher-quality solution to a customer problem. Uber now operates in 138 countries, including Australia, and is worth around A$17 billion.

Welcome to the world of disruptive innovation.

Dell, Amazon, eBay, Google and Uber have all been part of an unstoppable digital disruption of traditional industries. The question for all of us is: “How do we respond?”
There are probably three broad answers:

1. Deny it’s happening.
2. Push back and complain that it’s not fair.
3. Be part of it.

1 and 2 just delay the inevitable. But the reality is that so often the industry disrupters are not the incumbents. So, is 3 possible?

The present response by corporate incumbents has been interesting. Telstra, for example, has established Muru Digital (Muru-D), a start-up incubator. Telstra has said the goal is not just to identify fast-growth ideas for the company, but also to expose it to innovation and new thinking more generally.

The Commonwealth Bank has borrowed from the digital industry and run “hackathons” to generate new ideas that are implemented rapidly.

The university sector is certainly not a bystander in all of this. Our business model is being disrupted by digital learning, private education providers, emerging high-quality regional and global players, as well as research institutes and think tanks.

And the federal government’s May budget has signalled that domestic undergraduate university education is headed towards a true market-based system.

If we teach our students the benefits of markets and competition in other sectors, we have to embrace it in our own. This means thinking hard about our value proposition to students, the business community and society more generally, and ways to deliver on that value proposition.

We, like others, will need to challenge our long-held assumptions, experiment, be prepared to fail, and embrace new ways. That is, innovate.

We also have another role. If our mission as a leading business school is to enhance business practice through our research and teaching endeavours, then we need to make sure we are producing graduates and new knowledge that encourages and supports innovation and disruption.

This is perhaps one of the biggest opportunities presented by the new world in which we live.

Chris Styles is Dean of UNSW Australia Business School and a professor of marketing.