Half of business leaders questioned in a Microsoft-commissioned survey are concerned that their sectors are facing significant digital disruption over the coming two years.
Scoring highest in the anxiety stakes is the financial services sector, with 65 per cent of those questioned fearing the impact of disruption on their markets over the next 24 months.
More worryingly, the report - which questioned over 1,000 business leaders across the UK - found that nearly half of those questioned (44 per cent) believe that their existing business models will cease to exist within the next five years. But despite the potential threats, 46 per cent of business decision makers claim senior leaders in their organisations are unwilling to disrupt their existing businesses to grow and compete.
Nicola Hodson, general manager of marketing and operations at Microsoft UK, said: "The dawn of the fourth industrial revolution is a massive opportunity for British businesses, but many are still living in an age of innocence or inertia when they need to be innovating.
"While this research indicates that business models are breaking, many business leaders appear unwilling to address them."
In total, 51 per cent of business leaders questioned are concerned that rapid digital transformation will raise more concerns about privacy and security, with public sector leaders being the most concerned (56 per cent), financial services on 48 per cent and retail 47 per cent.
A further 33 per cent felt that older generations of workers will be left behind, hinting that cultural change could be a barrier.
Despite the fears, it emerged that financial organisations are more focused on the future, with 64 per cent of respondents stating that they have a formal digital strategy in place, compared with the public sector where just 35 per cent said they are prepared for a digital future.
Furthermore 26 per cent said there is no digital strategy at all in place within their organisations, with 35 per cent believing they have a digitally literate leadership team.
"New challengers, many of which are digitally savvy start-ups, are disrupting established markets by deploying new technologies quickly, and luring expectant customers away from established competitors," said Hudson.
"For many larger organisations, the challenge is how to react to this market disruption in a considered way and how they maintain competitiveness in a rapidly shifting landscape."
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