Business & finance professor, digital lawyer, restaurant owner, board member & traveler.
I am lucky. I have the opportunity to work at a “large electronics company” and a university. I am also involved in several other “gigs” and help governments and international organizations with the digital transformation.
This experience puts me in the unique position to have many different kinds of working relationship with many types of people. I see for myself — on a daily basis — the impact of a digital society on the way we interact with others.
And just to be clear, by “digital relationships,” I am not talking about online romantic relationships but all the other sorts of relationships that make up our lives and make us who we are in the emerging digital gig economy.
What I notice when I talk with co-workers, and students is that there is a lot of confusion about the impact of the “digital transformation.” One thing, in particular, stands out from these conversations.
Most of us tend to underestimate the impact of this transformation on how we interact with other people.
Here are three myths I frequently hear about the digital transformation.
The majority of people that I speak with don’t seem to take the “digital transformation” seriously.
They don’t believe that current artificial intelligence solutions are smart and think that they are only applicable to particular use cases (in healthcare, gaming, face recognition, etc.).
They aren’t big believers in the crypto-economy. They’ve read about the social, environmental and regulatory shortcomings of blockchain technology. They believe that Bitcoin is a fad.
Unfortunately, the majority underestimates the speed of technological development and how it is changing the way we build trust and maintain relationships.
Another group accepts that something important is happening but compares the digital transformation with previous technological revolutions.
In the past, we have always been able to deal with new disruptive technologies and — so this argument goes — it will be the same this time. The car gave us a new sense of freedom and control. Light and electricity dramatically changed the way we lived and worked. Both technologies changed the world, and we managed to cope with these changes.
Reference is often made to the younger generation. For them, the digital transformation comes naturally. And, I agree. But, many people overestimate the ability of the younger generation to deal with the digital transformation. My experience with students, for instance, is that they know how to use new technologies, but they don’t understand how the technologies work or they don’t think about how they are affecting society.
The speed of technological change and the fact that technological developments are “self-reinforcing” leads me to believe that things really are different this time.
And then there is a final, possibly smaller, group of people who fear the digital transformation.
They warn of the side-effects of super-intelligent machines (“singularity”). They are convinced that most of us will lose our jobs (or worse).
They are correct about the speed of the transformation and the potential issues with the current technological change.
But there is a misconception here. For instance, I come across more stories about lawyers losing their jobs because of the implementation of smart contracts. This statement is incorrect. I am a great believer in computer coded “smart contracts” and their potential for organizing and structuring relationships in an “Internet of Things” environment. But they will not replace lawyers. They will just force lawyers to think, act and work differently.
Google’s CEO, Sundar Pichai, said earlier this year that digital technologies (he was referring to artificial intelligence) would be more important than “fire” or “electricity.”
I don’t want to (re)start the “importance” discussion here, but Mr. Pichai has a point.
Digitization is currently transforming the world in an unprecedented way and at an unparalleled rate. What is perhaps most important (and often neglected) is that the digital transformation has an enormous impact on the way we organize ourselves and build and maintain relationships.
And more than that; digitization has contributed to the emergence of a gig economy, which has a much greater impact on society than simply the emergence of more temporary workers and free-lance positions.
To see how digital technologies are shaping the “gig economy” and affecting all of our relationships (and not just our work relationships), it might help to consider the “3 Ds of digitization.”
Digital technologies have resulted in numerous new business models. Think Amazon, Netflix, Airbnb, and Uber.
These “digital” companies haven’t eliminated the traditional and established players (yet). We still have supermarkets, taxis, and hotels.
But digitization has changed “our expectations.”
We (as consumers) have become smarter, better connected, and more demanding. We love the “speed” and “convenience” offered by digital technologies and we are not willing to give it up. Our “voice” (as end-consumer) has become more powerful than ever before.
As a result, our relationship with business has changed dramatically. Even business-to-business companies need to take consumer views more seriously.
Digitization empowers people in other ways too. For instance, digital technologies help us become more aware of our health. We can monitor our activities (think smartwatch). Sensors, big data, and algorithms provide information that can help medical doctors make more and better diagnoses. But they also make us more knowledgeable about our health condition. The traditional hierarchical doctor-patient relationship is disrupted.
In many contexts, digitalization transforms traditional relationships and forms of interaction.
Who, when and where we “trust” has also changed. Whereas in the past, we relied heavily on institutions, intermediaries, and other third parties, we increasingly place our trust in digital systems and algorithms. I have written about this before, but it appears that we have less and less confidence in “old world” institutions.
The speedy development of distributed ledger technology (including blockchain), smart contracts and artificial intelligence will only further automate trust.
Institutionalized trust is replaced by “digital trust.”
It is obvious that the automation of “trust,” “faith,” and “confidence” has a tremendous impact on worker-employer relationships, the meaning of leadership, and how management operates.
The opportunity to communicate and interact with peers directly (through social media and without the interference of third parties) makes us more entrepreneurial and creates new opportunities to be creative (think YouTube, Instagram, etc.).
Our “new” relationship with digital technology also makes it possible to have peer-to-peer connections, communications, interactions, and transactions. Algorithms and data-analytics help us find partners, assistants, sponsors, help, accommodation, etc.
Of course, these digital systems aren’t flawless, but the fact is that we increasingly rely on decentralized “peer-to-peer systems.” The convenience of these new systems attracts us.
The looser (digital) connections and interactions are so much faster and more comfortable than the old “formal” ways of making fixed appointments and ritualized meetings.
And it doesn’t stop there. We can also now “meet” and interact in online “virtual” spaces even if we are thousands of miles away from each other (think of developments in the gaming industry, for example). Virtual reality and augmented reality will only add to this unparalleled consumer experience and the way we relate to each other.
Of course, there is some truth to the myths about the digital transformation. I don’t want to deny them altogether.
And, the three myths (“hype,” “nothing new,” and “dangerous”) often result in interesting and entertaining discussions.
The digital transformation, technological innovations, and the gig economy are hot topics right now. I wrote before about the attractiveness of these topics, even amongst academics. The rankings of “top authors” have been completely reshuffled and “tech authors” currently dominate.
But here’s the thing. In general, there is a lot of talk about digital technologies and their ability to transform the way we live and work, but at the end of the day we tend to continue to operate as if it were “business as usual.”
And this is where we go wrong. We have to “start doing.”
For me, this means that I have to change how I teach my university courses for this year. I will not only discuss the digital transformation (“business as usual”), but create opportunities for my students to research and experiment with the 3 Ds of digitization (disruption, disintermediation, and decentralization) in simulated “real world” situations that I experience in my job as an executive and in other “gigs.”
It is essential for the next generation to understand why and how digital technologies are going to evolve. And I don’t mean academic knowing, but real practical “know how.” They must learn to educate themselves continuously. They must be able to build digital relationships that help them progress in a fast-changing society.
Only then will they be prepared for the things to come.
We all should start acting and realize that digitization is forcing rapid change upon everyone.
We are experiencing a “digital transformation” window. It is time for all of us to ask ourselves the following questions:
Maybe we need to learn new things to find informed answers to these questions. So be it. In a fast-moving world constant self-learning is obligatory. And based on the answers to these questions we have to make decisions.
One thing is certain: “business-as-usual” will not be an option for most of us in the (very) near future.
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