Hello and welcome to the inaugural edition of Industry Shifters! I hope you are having a great week so far.

Let’s get into exploring the potentially disruptive trends and technologies that could put a smile on your dial or make you want to punch a hole in your wall.

Chemical Recycling

Chemical recycling, or advanced recycling, is a process that converts waste plastics into valuable chemical feedstocks or new plastic materials. 

This technology offers a promising solution to the plastic waste crisis, as it can break down plastics into their basic molecular components, allowing for more thorough recycling of previously non-recyclable materials.

Potential Impact

The Australian recycling sector is a $19 billion AUD industry that provides over 94,000 jobs, according to the Australian Council of Recycling.

Therefore, if a company was able to take advantage of chemical recycling and implement it effectively to disrupt this industry, it is not unreasonable to imagine that it could build a market share worth hundreds of millions of dollars (if not billions).

Why this WILL be disruptive:

• Waste Problem: As of 2020, only 13% of plastic is recycled, with many plastics being difficult to process using traditional methods. Chemical recycling can handle mixed or contaminated plastics that would otherwise end up in landfills or incineration, offering a solution for these hard-to-recycle materials.

• Corporate Interest: Companies in Australia, such as Licella, are investing in chemical recycling technologies like hydrothermal liquefaction, signalling corporate confidence in its potential.

• Government Support: The Australian government is supporting the recycling industry through initiatives like the Recycling Modernisation Fund, which can help develop chemical recycling infrastructure. Increasing regulations promoting circular economies and reducing plastic waste further bolster this support.

• Circular Economy Alignment: Chemical recycling fits into the principles of a circular economy by turning waste plastics into valuable secondary raw materials. This helps reduce reliance on fossil fuels - making it attractive to both regulators and consumers focused on environmental impact.

Why this WON’T be disruptive:

• High Costs and Energy Intensity: Chemical recycling processes are expensive to operate and maintain, which could limit their economic viability compared to traditional recycling methods. They also require significant energy inputs, potentially negating environmental benefits and increasing carbon emissions unless renewable energy is used.

• Scalability and Infrastructure Challenges: Current chemical recycling technologies are not yet scalable enough to handle the large volumes of plastic waste produced globally, as demonstrated by facilities like Licella's, which will start small and scale gradually. Building and operating these facilities requires substantial capital investment in infrastructure, including waste collection systems, transportation, and processing plants, further slowing widespread adoption.

• Technological Immaturity: Many chemical recycling technologies are still in early development stages, with questions around scalability, cost-effectiveness, and long-term reliability.

Ransomware Attacks on Accounting Firms

Ransomware is a type of malware that encrypts a victim's data, making it inaccessible until a ransom is paid. It typically spreads through email spam, malicious websites, or by exploiting vulnerabilities in systems.  

In the last few years, there has been a notable trend of ransomware attacks on Australian accounting firms, with some recent high profile attacks including those on Gibbs Hurley Chartered Accountants and T A Khoury and Co.

Potential Impact

The market size of the Australian accounting services industry is $33.4 billion AUD in 2024 according to IbisWorld.

Given the size of the accounting services industry as a whole, if ransomware attacks continue to become more frequent and remain successful, they could potentially cost the industry hundreds of millions of dollars per year in damages. 

Why this trend WILL continue to grow and be disruptive:

• Increased Vulnerability: The digitization of operations and reliance on cloud services and remote work have expanded the attack surface, making accounting firms more attractive targets for cybercriminals. Many firms lack adequate cybersecurity measures, especially smaller ones, heightening their vulnerability.

• Growing Frequency and Severity of Attacks: Ransomware attacks on accounting firms have surged, reportedly increasing by 300% since the onset of the COVID-19 pandemic, according to Accounting Today. These attacks have targeted firms globally, indicating a significant and widespread threat.

• High-Value Targets: Accounting firms hold sensitive financial and personal data, making them prime targets for cybercriminals. This data is highly valuable for identity theft, financial fraud, and corporate espionage.

Why this trend WON’T continue to grow and be disruptive:

• Increased Cybersecurity Investments and Enhanced Measures: In response to the rising threat of ransomware attacks, accounting firms are investing more in cybersecurity, including advanced measures like encryption and multi-factor authentication. This investment helps make firms less vulnerable and significantly reduces the risk of successful attacks.

• Improved Cybersecurity Awareness and Education: There is a growing focus on cybersecurity education and training within the industry, enabling employees to identify and prevent attacks. Many firms are seeking specialised cybersecurity advice, leading to stronger protective measures and defences.

• Declining Attack Success Rates: The percentage of Australian organisations suffering successful ransomware attacks has decreased from 80% in 2022 to 54% in 2024, suggesting that improved defences are reducing the likelihood of successful attacks.

Dishwasher Subscriptions

Dishwasher subscription services are emerging as a notable trend in Australia, offering a convenient, cost-effective alternative to traditional appliance ownership. These services allow consumers to lease dishwashers on a monthly basis, often including maintenance, repairs, and upgrades as part of the package.

As Australians increasingly seek convenient, affordable and sustainable household solutions, dishwasher subscription services are poised to increase in popularity.

Potential Impact

The Australian dishwasher market is worth roughly $300 million AUD. 

Therefore, businesses taking advantage of the disruptive trend of dishwasher subscription services could eventually control a significant portion of this market and easily be worth tens of millions of dollars - provided this business model is effectively executed, and this trend continues to grow.

Why this trend WILL continue to grow and be disruptive:

• Convenience and Flexibility: Subscription services provide hassle-free maintenance, ensuring consistent access to both dishwashers and cleaning supplies like detergent. They eliminate the need for upfront costs and grocery store trips, appealing to renters, younger households, and those uncertain about long-term commitments.

• Cost-Effectiveness and Predictable Costs: Subscriptions often bundle discounts, maintenance, and repairs, offering a manageable monthly expense. Over time, this can save consumers money compared to sporadic repair costs, making the model financially accessible, particularly for lower-income households.

• Changing Consumer Preferences: The subscription model reflects a shift in ownership trends, especially among younger generations. Consumers are moving towards flexible, pay-as-you-go models across various industries, including household appliances, due to the preference for convenience and lower upfront costs.

Why this trend WON’T continue to grow and be disruptive:

• Ownership Preference and Traditional Habits: Many consumers prefer owning appliances and managing their own maintenance rather than being locked into ongoing payments. Additionally, long-established habits of purchasing appliances and supplies from stores may make the transition to subscriptions less appealing for some.

• Market Saturation and Consumer Scepticism: The established dishwasher market may limit disruption potential, especially as many consumers already own their appliances. Scepticism about long-term cost savings, as well as subscription fatigue, may also make consumers hesitant to adopt a new model.

• Long Term Costs: While subscriptions offer lower initial costs, they can become more expensive than outright purchases over the long term. For consumers intending to keep their dishwashers for many years, this model may not be economical.