Leadership in the Digital Era - A Global SPORTS INDUSTRY Perspective
The current pandemic has exacerbated the impact of the digital era on most industries and we have a unique opportunity as a society to redefine, redesign and reconfigure the way we live, work, and educate future generations. The Sports Industry plays a complex role in society as it spans across all domains and markedly contributes to the global economy.
As a recent report by Market Watch has highlighted the global sports market is expected to grow at a CAGR of 13.53% and to reach an estimated $440.77 billion by end of 2021. One of the major drivers leading to this remarkable growth has been the need to engage in business and digital transformation, as companies have realized how important pivoting to new business models and reorganizing their operations was while recovering from the COVID-19 impact. Furthermore, some industries have capitalized on the global impact and have expanded their portfolio of services in order to gain market share and to retain their competitive advantage. One of these niche industries is e-sports. The market is expected to reach $599.9 billion in 2025 at a CAGR of 8%. As competitive video games continue to integrate into popular culture, global investors, brands, media outlets, and consumers are all paying attention to the rise in popularity of e-sports. Total e-sports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023.
We are currently experiencing the 4th industrial revolution and likely entering the 5th. Several experts predict that emerging technologies will have a profound impact on the economy and transform the global sports industry in a way that will likely persist beyond the pandemic restrictions. AR, VR, XR combined with AI, IoT, cloud computing, 6G or satellite internet have a marked disruptive potential.
Many experts consider e-sports industry one that will be deeply affected and show long lasting growth in this new era. AR, VR and XR are spearheading major innovation in the sports industry experience, while satellite internet, 6G networks and IoT are offering unprecedented access to new market segments globally.
Sports Industry leaders that wish to be prepared for the 5th industrial revolution and successful in managing its impact on the global sports ecosystem will be required to display a complex portfolio of novel skills, such as technology literacy, design thinking, agile management style, globalist mindset and mastery of applied ethics.
It used to be sufficient to be a “tech savvy” leader, however with the cur-rent exponential advancements of a variety of modern technologies it has be-come an imperative for global sports industry leaders to have a higher degree of technical acumen in order to remain competitive. Additionally, with the fo-cus on e-sports and a trend towards gamification future-ready sports industry leaders would be advised to embark in the digital transformation journey and embrace a futuristic mindset.
Furthermore, the exponential increase in revenue generating pressures triggered by the economic will also demand a culture of ethics and leading with integrity and transparency. Ethical principles have been recognized as essential for our society for centuries; after decades of marginalization, we are currently witnessing a resurgence of business ethics and digital ethics. There are numer-ous complex reasons for this ethics renaissance, however a high degree of digitization, automation, virtualization, gamification and hyper-connectivity in a global business ecosystem are essential drivers. The scientific and business communities, numerous not for profitand government agencies are all appro-priately concerned about ethical issues unique to a global e-sports ecosystem, with topics like artificial intelligence, algorithmic bias, discrimination, data pri-vacy, data ownership, transparency and trust
It used to be sufficient to be a “tech savvy” leader, however with the current exponential advancements of a variety of modern technologies it has become an imperative for global sports industry leaders to have a higher degree of technical acumen in order to remain competitive.
making the headlines on a daily basis.
Reactive or mitigation approaches are not an optimal solution and one would hope that ethical leadership in this digital era will be defined by state-of-the-art strategic planning, optimal implementation and a profound transfor-mation of our current sports ecosystem.
The Global Sports Industry was already facing significant challenges prior to this pandemic onset due to the competitive environment created by live streaming platforms. Superimposing the marked pandemic restrictions and drastic reductions in revenue, as well as the increased market share captured by e-sports and videogaming platforms has only added new layers of com-plexity to those existing challenges.
To survive, Global Sports Industry leaders must re-invent and disrupt themselves. In order to succeed, they must leverage the emergent technologies and their convergence to capture new markets, offer novel opportunities and cater to new generations of citizens around the world.
While the strategic considerations for the business of sports in the digital era are certainly complex, being aware of key drivers is of utmost importance. Any successful strategy has to undoubtedly incorporate ongoing digital transformation and foster a culture of continuous innovation. There certainly is no magic recipe for an optimal strategic plan, however there are some key lessons to be learned from other industries and elements of success that deserve to be highlighted.
So, what are the lessons learned from previous organizational failures? As the team at Deloitte identified, the top 3 reasons why amazing strategic plans fail are: incoherence, inconsistency and incongruence. McKinsey and Forbes teams also highlight that overlooking related ecosystems, ignoring threats posed by technology incumbents or other new entrants into the sports industry, missing the need for duality have also frequently led to faulty or delayed implementa-tion of greatly designed strategies.
Conversely, there are also elements of success organizations need to be aware of such as: talent management, agile deployment methodology, under-standing the economics of a digitalized enterprise and a proactive instead of a reactive approach can all lead to successful implementations and to long term sustainability.
We are currently witnessing what is called by some international experts “The Smart City Revolution”. The Covid-19 induced global crisis has only accentuated pre-existent economic and social challenges. These unprecedented times call for innovative solutions and a revised approach to manage this volatile post-pandemic global business environment and for us to adapt to major emerging technology mega trends. Sports and entertainment are often missing from smart cities frameworks, strategic roadmaps or implementation books.
In order to be successful in designing a smart sports ecosystem, key stakeholders need to be open to novel funding sources, novel business models, novel implementation strategies and amenable to using design thinking for planning the smart sports cities of the future. However, building smart sport cities is not a one-time project. We must be ready to engage in a culture of ongoing digital transformation, digital innovation and digital disruption. One of the disruptive concepts that the sports industry might be facing is the rise of The Metaverse. Leading companies have already announced significant investments in designing, building and scaling The Metaverse from the video-gaming and entertainment industries, to fashion- and potentially soon to the e-sports in-dustry.
As a Deloitte report highlighted recently digital twins are designed and deployed to enable virtual collaboration and could markedly impact consumers, athletes and the business of sports. Can we imagine a future world where any one of us could have a digital sports twin for each of our favorite sports in the Sports Metaverse? Can we envision a world where these digital sports twins could not only fulfill our sports-fantasies, but also be used for training, performance improvement, or rehabilitation of athletes?
In order for these transformative changes to occur, many global stakeholders in the sports ecosystem and other related business ecosystems will have to collaborate and adopt an abundance mindset. We hope that sports industry leaders are up to the difficult task that lies ahead and will lead their teams with courage and integrity.
In order to be successful in designing a smart sports ecosystem, key stakeholders need to be open to novel funding sources, novel business models, novel implementation strategies and amenable to using design thinking for planning the smart sports cities of the future.