Commit to scaling new ideas with ecosystem partners who can provide access to technologies and specialized talent. Most industries in the Vulnerability period have the Platform companies and startups, fueled by an benefit of being well-established and asset-rich. eight-fold rise in VC funding since 2011, are The incumbents in these industries tend to be perpetually trying to overtake incumbents. Some older than others: 64 years on average, compared innovations, such as ride-sharing, may even knock 67% with just 42 for those in the Viability period. demand off course. One shared vehicle may The new entrants that do emerge, initially attack replace eight privately-owned vehicles; by 2030, of automotive incumbents at the product and service level rather up to 40 percent of the profits in the industry may 14 companies expect than competing across the value chain. But for be picked up by mobility services. With cost of to actively engage most, the squeeze often isn’t severe enough to goods sold at 80 percent of revenues across the with ecosystem inspire substantial action. Incumbents often industry, relying on a core business of pumping out partners to scale ponder for too long and lack the risk appetite to incrementally improved cars looks like a strategy the most promising invest in new growth ideas early. that’s out of road. ideas faster, in the The Automotive sector has spent six years in the The opportunity exists for those companies that next five years. period of Vulnerability. But while incumbents may can see beyond the short-term pressures and set think they’ve applied the brakes to disruption by their sights on creating scalable businesses that revving up capital investment and easing up on will matter tomorrow. Large companies have operating costs, the industry could face a bumpy realized that to succeed, they need to commit to ride ahead. scaling new ideas with ecosystem partners who can provide access to technologies and specialized talent. 24 BREAKING THROUGH DISRUPTION