Three Critical Reflections on the Digital Economy in 2020
I’m sitting in a Wimpy hamburger restaurant at the heart of a shopping mall in Aldershot town centre. It is Saturday afternoon and just a few days before Christmas. On what should be one of the busiest days of the year, all is quiet. I am the only person at any of the 30 tables. Few shoppers appear to be entering any of the stores. All of them wear masks. Several of the windows around me are completely dark. Others boarded up. I sip my diet coke and type on my laptop in silence.
This sounds like it could be the opening of a dystopian novel set in a future century. Unfortunately, it is the 2020 reality in the UK. There is no doubt that 2020 has been a heck of a year. For many people and organizations, this year will undoubtedly forever be marked as a “before-and-after” pivot point. The personal challenges faced by all of us have been matched by the business shock delivered to organizations affected by the rapid impact of the pandemic. Disruption, uncertainty, and volatility are everywhere.
Yet there are several important reasons for looking at 2020 as primarily a positive watershed year for the digital economy. A number of commentators see this year as “the great acceleration” for digital transformation. Even more succinctly they observe that the digital economy has made 5 years progress in less than 5 months. Interest and investments in digital technology is soaring. Weekly announcements herald research breakthroughs in Artificial Intelligence (AI), Machine Learning (ML), and Quantum Computing. The stock market, driven by the Big Tech giants, is at an all-time high. How do we even begin to make sense of this?
All the studies into organizational culture shift and change models agree that meaningful transformational change requires a “compelling reason to act”. For digital transformation this came in the spring of 2020. New approaches were needed to ensure business and society could continue as transport services were cancelled, workers were sent home, and public sector agencies adjusted to offer the necessary support. Digital approaches came to the fore. Many of the predictions and ambitions for the digital economy suddenly gained an urgency that previously had been missing. And for many organizations they now had received their “compelling reason to act”.
It can be argued that this shock treatment was quite timely. The last decade brought greater attention to digital approaches and the disruption they delivered in several key industries. Everyone points at the stories of the demise of Kodak, Blockbuster, and Nokia to be warnings of the inevitability of digital disruption. For Large Established Organizations (LEOs) they feature heavily in strategy discussions, training classes, and innovation labs. However, for many leaders, managers, and decision makers these examples were viewed as rather distant echoes of a storm that was some way off. Providing plenty of time for preparations, and certainly not sufficient to take the eye off delivering business as usual.
That’s not how they view things today. Much of the past year has been spent frantically reworking digital initiatives to ensure organizations can function, survive, and thrive in the new reality. Although there are many threads to this, three areas of particular digital impact characterize the change in thinking here: Remote working, Data-driven decision making, and Big Tech regulation.
Much has been said and written about the role of digital technology to support remote working and to ensure business continuity. Suddenly, the resistance to virtual meetings was broken. We all worked out how to make online conference calls. But perhaps more importantly for the digital economy, there has been a key movement in thinking inspired by this shift. Domains dominated by physical proximity, previously stubbornly resistant to digital change, now see the world through different eyes. Events companies, universities, cinemas, veterinary practices, hospitals, government departments, and many more previously placed many roadblocks in front of digital approaches to service delivery. In most cases, half-hearted experiments and small-scale efforts to digitize current working practices faced an uphill battle to have major impact. This is no longer true today. All organizations in these domains see their world as digitally transformed. If not completely, then certainly they see the onrushing train at the end of the dark tunnel.
Similarly, the fast-paced evolution of the covid virus brought a lot of attention on the value of data. In particular, understanding the spread of the pandemic has required substantial information, rapid data analysis, and use of track-and-trace systems drive action and response. Any previous hesitancy about the importance of data-driven decision making to ensure operational resilience have now been eradicated. We now have a clear, compelling illustration of the role that digitally-derived data can play in managing volatile situations. Furthermore, we now have a new awareness across the public that the use of such data has enormous benefits for society. There is no doubt that our future behaviours will be digitally monitored, measured, and managed. And that we need to make that work for all concerned.
Finally, throughout this unprecedented year there has been an on-going spectre for the Big Tech companies. Regulation. Over the past few years, attention has been turning to the power and influence of companies such as Facebook, Google, Amazon, Apple, Microsoft, Twitter, and others. In 2020 several new government initiatives and legal challenges have focused on their role as platform companies, their tax status, their employment practices, their influence on partners, and so on. The implications could be huge. How the Big Tech companies evolve and grow will be one of the most important stories in the digital economy over the next few years. Despite this attention, in 2020 these companies have seen their revenues and stock prices rise, and they have increased in market valuation by more than $2T. Strange times.
It has been an important and life-changing year. We have all learned a lot about ourselves, about our work, and about the world around us. Time for us all to reflect on what we’ve learned and look forward to the future.
Source: AWB Digital Economy Dispatch #15