Category Archives: Strategy

Digital Economy Series: Will the offline world really matter anymore?

Although this series of Digital Economy articles is written from the perspective of what life could well be like at the half-way point of this Century, it is instructive to step back and view the flow of history. For it is through an appreciation of how human affairs have changed, and what has driven those changes, that we can grasp what lies ahead. That we can begin to form answers to the questions at hand.

great sphynx of giza egypt
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Questions such as: will the offline world matter in 2050? Will the teenage grandchildren of today’s teenagers interact with the physical world as is currently the case? Will the limitations of our physical world be overcome by then? Will the digital realm be a greater source of influence than the temporal?

Prior to recent times, our lives were centred on the world of the atom rather than the world of the bit. It was solely in physical spaces that we built relationships, grew economies and exercised political influence. From the villages of the agricultural age to cities of the industrial age domestic, business and government activities were conducted exclusively through analogue means.

But it is without question that we are in a period of transition. The balance is shifting from the physical to the digital. For although the online world is ubiquitous, we are still beholden to our physical world. Even though domain names and the virtual properties they represent sell for millions, the power and opportunity that is afforded through the ownership of real-estate is even more significant. Even though a cadre of eminence grise wield the power of social media in commercial and political spheres, we still respond through our presence at the checkout or the ballot box. And even though the value of digital services is rising, our nations’ export earnings are still dominated by that which can be carried in ships.

Given that the trees of tomorrow are todays seedlings. That the systems of tomorrow and the way things will be are nascent today. What do we see around us? Today our social and retail transactions are dominated by ever-present digital transaction, and as we grow more comfortable with its safety and ease, tomorrow these transactions will dominate all other aspects of our lives such as our domestic, employment, health, romantic and spiritual affairs.

Today, most of us are generally free to live our lives free from statutory manipulation. But as we see administrations around the world learning to leverage digital tools to achieve social outcomes, opposing voices may well be reduced to obscurity. For even the phenomena such as the growing Tech-Lash or the various uprisings coordinated through social media will fade into impotence as the State develops and controls the digital-only narrative to maintain political control.

And so, in the time ahead, our lives will centred on the world of the bit rather than the world of the atom. It is more than likely that it will solely be in virtual spaces that we build relationships, grow economies and exercise political influence. Where we are headed, transitioning from the cities of the current information age to megapolises of the coming intelligence age it is quite reasonable to assume that all domestic, business and government activities will be conducted exclusively through digital means.

Therefore, how the teenage grandchildren of today’s teenagers experience life will be vastly different to our current reality. The offline world won’t be as dominant as it is today.

 

 


For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, review my IT Strategy blog, subscribe to my YouTube channel, or buy my ‘Jobs. Future. You.’ workbook.

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Digital Economy Series: In a fully digital world will companies still need to account for the environment?

There are a number of ways in which companies account for the environment. Including a seasonal perspective in terms of the variations in goods and services brought to market, another is from an environmental perspective in terms of energy usage as well as production and packaging materials, and a third is from a shareholder and stakeholder perspective in terms of statutory requirements.

person on a bridge near a lake

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In recent years the triple bottom line reporting framework has made its way into corporate practices. Where companies, for reasons due either to regulatory compliance or enlightened executives, report on profit, people and planet. That is, in addition to their standard financial statements organisations are reporting on metrics related to their staff and their impact upon the environment.

Building on the acceptance of reporting on more than one performance parameter, there is a nascent movement to embrace the quadruple bottom line. Where this fourth performance parameter is “purpose”. Defined as the ethics, culture and desires of the organisation.

The implication of the preceding is this. The administrative policies and processes that are established by government bodies, and are used to govern companies and organisations, change over time. Long gone is the notion that business reputation is solely built on a profit and loss statement.

So, into this governance implication let us now draw two threads from previous articles and elsewhere: the structure of business and the changing environment. Firstly, we know that the processes business engage in to make a profit will change in the decades ahead. Pervasive digitisation will drive an increasingly ubiquitous phenomena of process automation and forms of cognitive processing. Limiting the typical set of tasks available for the human workforce to those requiring people skills and/or thinking skills.

Secondly, while this trend of digitisation gathers apace the climate and natural environment in which business and the digital economy is beholden to will still be changing. There are two responses to these macro changes. The first, described as a pathway of current and common ambition, is to succeed in humanity having a light footprint on the environment. On the other hand, the pathway of lackluster ambition necessarily leads to outcomes that are less than optimal for all life forms.

Now, there is currently a broad acceptance of the concept of a global carbon budget. Therefore, one can envisage that, over the course of the time horzon for this series of articles, this principle of a global budget being established in corporate governance practices. Where economic entities are given a “profile” to work within. Thus, realising a transition from triple bottom line reporting through quadruple to quintuple. That is adding “profile” to the currently recognised profit, people, planet and purpose.

With respect to the triple and quadruple bottom line reporting the sense is that these governance outcomes are the result of internal motivations. The result of what the business decides to do. With the “profile” metric, the sense is that the reporting is on the outcomes with respect to the environmental budget that any business is given to work within.

This “profile” metric, a response to a set of imposed environmental limits, is relevant to both climate outcomes. Through either an enforced collaboration upon all businesses to ensure a continued light footprint, or a set of rules to limit the damage upon our common habitat.

The image of this future for business, the government and the economy is this. It is where the operational milieu of business is characterised as an expanse of intensely interconnected entities that are data and computationally rich. Where the description has morphed from being called a digital economy into an intelligence economy. Where the wisdom of the quintuple bottom line enforces the boundaries of all behaviour.

In a fully digital world companies will not only need to account for the environment they will be required to.

 


For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, review my IT Strategy blog, subscribe to my YouTube channel, or buy my ‘Jobs. Future. You.’ workbook.

Digital Economy Series: In a fully digital economy will the dollar still be king?

We trade in what we value. Whether it be a young child trading a small coin for a sweet at a corner store, the consistent portion of a wage over many years in exchange for a house, or the complexity of financial transactions to fund a manufacturers expansion. If we value something we will participate in a fair exchange with the seller.

money coins finance cash
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We are all aware of the barter economy, of an era long past, where that form of trade was the primary mechanism to establish fair exchange between parties. Over the course of time it was hard currency that first supplanted this ancient mechanism, then promissory notes, until now where digital representations of cash are the means through which value is exchanged fairly.

Also today, it is a sovereign currency, the dollar (or Euro, Renminbi or Yen) if you will, that is king. It is this fiat currency, this legal tender of value backed by an issuing government that is implicitly trusted so that we can fairly exchange value. Whether its that young child at the corner shop, or the insurance company guaranteeing the importation of that machinery, we all implicitly trust that issuing authority.

We pay, and governments collect, taxes based on that trust. Businesses leverage the inherent strengths of the banking system to invest in growth, based on that trust. Governments trust other governments based on that trust.

But in a fully digital economy, what entity will be the foundation of that trust? The case could be made that a single global currency could become king. Where, over the coming decades, a currency founded on blockchain principles could supplant the many sovereign currencies in existence today. The case could also be made for a return to the barter system. Where, again over the coming decades, the nascent peer-to-peer sharing economy becomes the most trusted mechanism for the fair exchange of value.

For I don’t believe that we can safely assume the future of financial transactions is just a more efficient version of what we experience today. Where sovereign entities of trust anchor computerised exchanges of value at retail, commercial and government levels. What if the world moves to a type of universal basic income or universal basic services model? Where the accumulation of wealth is a foreign concept to most and bartering is de rigueur. Or, what if the digital economy transforms into the intelligence economy? Where real value is no longer held in varying compositions of bits, but in prized abstractions of knowledge stored in quantum computing machines.

But I do believe that human nature will fundamentally remain unaltered in the coming decades. In a fully digitised economy there will continue to be shining examples of our “better angels” and likewise examples of those with more sinister intent. And, because of our human nature we will still form systems of governance and administrative oversight. We will still need the ability to enforce exclusion upon those who are a danger to society. We will still participate in fair exchanges of value. And don’t forget, people will still be people. At our core we’ll be motivated by the desire to either work toward goals, to work with people, or to work to accumulate power.

Given all this, and as we look far over the time horizon, will the dollar still be king in a fully digital economy? More than likely, the literal dollar won’t be king but the metaphorical dollar will be. Even though human nature is not likely to change, the mechanism for the fair exchange will continue to change. For each of us will continue to have something of value that is worthy of trading.

 


For more of what I have to offer, visit Dellium Advisory, follow on Twitter, connect using LinkedIn, review my IT Strategy blog, subscribe to my YouTube channel, or buy my ‘Jobs. Future. You.’ workbook.