Here is an introduction to Report 2 in the 2013 Shift Index series, published by Deloitte University Press. Its co-authors are John Hagel III, John Seely Brown (JSB), Tamara Samoylova, & Michael Lui.

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The cost-performance of three core digital building blocks—computing power, storage, and bandwidth—has been improving at an exponential rate for years. These “exponential” technologies come together in platforms upon which others can innovate, yielding a layering and proliferation of new technologies, new materials, and new ways of working and doing business. The current pace of technological advance is unprecedented and shows no signs of stabilizing. A “wait-and-see” approach to technology is no longer an option.

Our new report, From exponential technologies to exponential innovation, explores how these digital building blocks interact, together and with converging technologies, to amplify each other in unexpected ways that cause traditional definitions to blur and blend. For companies, this accumulation of technological advances can pose the threat of disruption—but also opens the door to great opportunity.

The changes wrought by exponential innovation are increasing the pressure on companies to perform. Yet, the same platforms and ecosystems that reduce the investment and lead times required to drive the next wave of innovation can also help institutions and individuals connect with each other, empowering them to combine technologies, practices and business models in interesting ways to create a seemingly endless array of new products, services, businesses, and new technologies. In this report we explore the opportunities and risks inherent in these dramatic changes.

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