Summary: New technologies generating new opportunities for economic growth that also reduce inequality and promote inclusivity. The impact these technologies are having on how we live is significant. They are changing how we work, travel, interact, consume and our health. This article explores seven ways digital transformation is changing our lives.
There are currently more than 8 billion devices connected to the internet. Experts believe that by 2030, this number will to grow to 1 trillion. The fourth industrial revolution (4IR), the dawn of the digital age driven by connectivity of technologies such as the cloud, artificial intelligence, nanotechnology, sensors, analytics and the Internet of Things (IoT), are creating entirely new industries and as a consequence, our lives are changing. Five ways digital transformation is changing our lives include:
Consumer habits are changing. From the dwindling high street in favour of shopping online to what the consumer is actually purchasing, the 4IR is changing how we consume. Consequently, enterprises are having to constantly reinvent their products to keep up with evolving expectations. An example of this is that customers have come to expect personalised interactions with the retailer or supplier. Where once this would be too expensive to deliver, digital technology allows companies to deliver personalization economically at scale.
For example, in 2013, Disney introduce the ‘Magic Band’ a multi-billion-dollar initiative to digitalise its park assets and improve customer experience. The bracelet has a radio frequency identification chip embedded within it, allowing the park to capture significant big data to analyse consumer behaviour data that enables them to devise strategies that improves the overall experience of the Disney parks. Information collected by the bands have enabled the management to reduce bottlenecks at entry points, allow guests to reserve ride times to avoid queues and bring in a multitude of personalisation initiatives.
The challenge with delivering high levels of personalisation, however, is that paradoxically, consumers are now acutely aware, and sensitive to, data privacy and therefore gaining access to information that allows for personalisation can be challenging.
The internet has enabled the concept of platforms – an interactive capability that allows an organisation, consumer or citizen to interact in a real-time and seamless fashion. This approach has created a societal shift in how we interact with authorities and also each other, as we now expect an open and responsive forum with which to communicate on our own terms and in our own time. Indeed, platform-driven interactions are expected to enable approximately $66 trillion of global revenue by 2025.
The platform approach is driving many areas of our lives and as such, enterprises and policy-makers need to collaborate to unlock the potential of delivering better value for society. Firstly, this shift is forcing business models to change to realize the value of driving scale through platform networks.
In addition, platforms are creating a distortion of boundaries between industries. This is because rapidly growing IoT networks are forcing organisations to focus on outcomes across the breadth of an economy as opposed to within their own siloed industry as products and services become increasingly inter-linked. In a survey of 2,000 information technology executives, 81% stated that industry boundaries will become dramatically less distinct in the coming years.
Recent technological and scientific breakthroughs have propelled medicine into a new era of smart care. From Precision Medicine and robotics to Medical Printing, 4IR technologies are getting more adept at diagnosing, targeting and treating illness and disease.
The key to this shift is the emergence of big data. In collecting a wealth of information on patients with similar traits or ailments across the world, scientists are able to design care that is more efficient. As the ability to map individuals’ genomes increases, we are likely to see further improvements in personalised medicines that have better efficacy and less side effects, thus reducing the overall cost of patient care as the illness is managed effectively the first time.
In addition to the treatment, how we deliver care is also being revolutionised by the rise of digital technology. IoT has connected medical devices to monitoring systems that allow clinicians to track a patient’s progress from afar, or less evasively. It also provides more accurate readings allowing a treatment plan to change according to minor changes in levels that indicate a bigger issue. As the network of sensors and forms of analysis becomes more sophisticated, treatment can be better tailored to individual needs making the wider health system more efficient.
The travel industry has long since been at the forefront of the digital revolution, changing the way people plan, and approach, travel. From the ability to conduct research online and book holidays tailored to specific needs without a third party, to the actual experience of travelling – the digital revolution has changed almost aspect of travel. For example, 21st Century travellers expect seamless travel experiences allowing them to move places through the transport network by planning ahead or at the touch of a screen. Whilst the transport industry has made significant changes to how aircraft, boats, trans and cars operate – it is the experience of taking these journeys that the customer is now prioritising.
One way in which this shift is being driven is through the emergences of the platform society whereby experiences are shared, rated and reported adding significant pressure on the travel industry to deliver the best experience in order to receive the highest ratings and reviews. Consumers look to global travellers to report on their experience of a hotel, airline, restaurant, entertainment facility in order to make their choice. A bad reputation is now grown online and therefore creating a positive experience is now directly linked to revenue.
The digital revolution is cause for fierce debate among policy-makers, economists and industry leaders about its societal impact. Whilst there is concern that the 4IR will result in the loss of an estimated 2 million jobs, it is also predicted that these jobs will be replaced by as many, if not more ‘new’ jobs created by the revolution.
However, in order to support this shift in employment, tremendous changes need to be made to the businesses altering these roles in terms of their models and workforce frameworks, not to mention the pressure on education systems to deliver curriculums that equip students and current employees with the skills they need for the new world.
At present, our energy usage outstrips the rate at which the environment can recover from the damage caused by utilisation of this energy. As populations and industry grows, this pressure is set to increase. It is estimated that current business practices will contribute to a global gap of 8 billion metric tons between the supply of and demand for natural resources by 2030, translating to $4.5 trillion of lost economic growth.
Digitalization could make a positive contribution to this challenge by making alternative sources of energy more viable or improving the efficiency of industry in order to reduce the energy required to complete a task. The cold fact is that our current reliance on finite energy resources cannot continue, therefore, the pressure is on to find alternatives and in time, the 4IR could provide these solutions.
Another key societal shift is within our relationship with technology. As digitalisation has provided many ways to improve our lives, it is becoming increasingly intertwined with our everyday activities.
In order to provide the services it does, technology often relies on the collection of significant amounts of data, personal and behavioural. Whilst there is unease in this ‘tracking’, or collection of our personal data, recent breeches in the use of this information has led to increased concern, worry and scepticism about releasing our data, even if it improves the service being provided.
Although social media and other platforms have been instrumental in increasing transparency and overcoming information challenges, trust in all technology-based sectors declined in 2015 and are likely to have reduced over the past three years as well. Consequently, global citizens are demonstrating increasing privacy and security concerns that frame broader ethical questions about the way organizations use digital technology. Unless legislation and governance is brought in to protect this trust, the erosion is likely to impede digital progress and halt both societal and economic progress.
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