One of the natural byproducts of increased innovation has been higher rates of technology adoption. New technologies are accepted by the public faster than ever before. For example, it took 80 years for telephones to reach half of U.S. households, but it took less than 10 years for cell phones to achieve that mark.

The chart below (from the same BofA report) provides a broader perspective on adoption rates. The trend is unmistakable—if a new technology is popular, it can spread exceptionally quickly. For example, while it took airlines 64 years to reach 50 million users, Facebook reached this mark in just 4 years.

More recently, ride sharing companies like Uber and Lyft achieved mass scale in just a few years. And according to a recent report by JMP Securities, shared scooters and dockless bikes offered by private companies Lime and Bird achieved adoption of 10 million cumulative rides in just over a year, an even faster rate.

Economic Data Aligns With Experience

The economic data strongly validates the innovation and adoption trends. Perhaps most strikingly, based on 2018 data from the U.S. Bureau of Economic Analysis, software revenues steadily increased as a percentage of domestic GDP from 2002–2017, and Bank of America Merrill Lynch expects this to continue (Source: “2019 Year Ahead: Growth Defensive Amidst a Slowdown,” Bank of America Merrill Lynch, December, 2018).

While the trajectory is impressive, with software at less than 3 percent of GDP, we are still in the very early days of the structural shift towards greater software penetration. Across industries, companies are increasingly deploying new applications to maintain market share and grow their competitive advantage. Even traditional sectors, like industrials, are beginning to take technology more seriously. In a recent report, Deutche Bank estimated that industrial firms are poised to invest $500B in new technology over the next 5-7 years. It’s no surprise that the U.S. Bureau of Labor Statistics predicts the number of software developers in the world is going to be growing 24 percent annually through 2026 (Source: Bureau of Labor Statistics, Occupational Outlook Handbook, April, 2018).

Sectors No Longer Matter

As Microsoft CEO Satya Nadella said recently, “every company is becoming a digital company.” Indeed, disruptive technological innovation can occur within any sector of the economy. Amazon began as a bookseller, shaking up an industry that hadn’t seen any major advancements since the Dewey Decimal System in 1876. The company has continued to innovate, disrupting the broader retail, grocery, logistics, media, advertising and information technology landscape.