At CeBit 2013, Salesforce Vice President Vivek Kundra’s big question for Australian leaders is “how can a country of 22 million people compete in a world of seven billion?” His answer?

“It’s not about size. It’s going to be about innovation. Innovation policy and an innovation agenda have to bethe come building blocks of a nation that’s going to compete in the global economy.”

Third wave of computing is changing the global economy

Competition in the global world of business is being driven by a ‘third wave of computing’. Essentially the shift from hardware to cloud based software and services and super fast mobile broadband networks that allow consumers and workers to access data on portable devices. Our clients have seen a doubling of visits to their websites from mobile devices over the last year. In fact, this year more people globally will access the Internet from a mobile than a computer.

The opportunity for challenger brands

The biggest risk for businesses I’ve observed are the internal stakeholders defending their hard fought for legacy systems and infrastructure, and managers who are obsessed with efficiency through fine-tuning traditional methods. As Kundra points out, competitiveness now comes from letting go of what you’ve currently got now. “Most large scale organisations are still stuck in 1980s technologies. If you’re still stuck in an old mindset then unfortunately there’s a young entrepreneur who is imagining the way the world should be rather than it is.”

“The most amazing opportunities lie in reinventing entire sectors of the economy.”  Vivek used the usual examples of US companies like Amazon, Netflix and Uber as businesses that are challenging categories today.

If you are running a business you have a clear choice he says – “do you want to be Amazon or Barnes & Noble?” This isn’t a particularly new view, as a global survey by Boston consulting summed up a couple of years ago, in this world of rapid change the spoils go to the nimble. Still, many managers still don’t seem to be responding.

“There’s a Darwinian spirit to the extinction of those who are holding onto the 1960s ways of doing business.” Vivek states, “not because it’s in the interest of the customer but because it’s easy and it’s because that’s what they know what to do.”

A marketer’s mantra for today: “The customer. The customer. The customer”

This is the biggest differentiator for challenger brands. “Companies that are embracing the third wave of doing business are doing it in the interest of the customer.”

Kundra recognises the fear of change within businesses when he suggests the best way to introduce a change culture is to build a prototype. “I think for too many people the expectations for transformative technologies is that it takes too long, costs too much and they’ve been burned in the past.”

A test and learn approach reduces risk

Last week at the launch of an AGSM Mid-Market program a professor specialising in innovation for business pointed out success today comes from having a portfolio of new initiatives that can be tested quickly in the marketplace. Rather than over researching only one strategy in an attempt to minimise risk, be willing to fail and fail frequently. The chances of some prototypes being winners with the customer will increase the more you try.

As Kundra says, aim to “be relevant and simplify the customers’ or citizens’ lives”.