Digital Disruption: Friend or Foe?

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Jarred Cinman | Managing Director | NATIVE VML | jarred@native.co.za | www.vml.com |


Digital Disruption – or technological innovation (depending on your perspective) – is seen as both inevitable and inherently good in modern business.

Most companies have strategies to embrace emerging digital technologies – and even to fundamentally transform and reshape themselves for the digital age.

When I started in this industry 20 years ago, most people and businesses regarded the rise of the internet and its associated technologies in one of three ways. Some thought it was a novelty, confined to geeks, and that it was unlikely to impact them. Some thought it would enhance or complement their existing businesses or skills, cutting costs and simplifying things like customer service. And some thought it would massively disrupt their industries and shepherd us into an entirely new world.

In 2017, it looks a lot like the third group won.

Those US businesses led by geniuses who took a massive bet on the internet are among the largest businesses in the world. Those who refused to change are irrelevant, and in many cases have disappeared. And those who sought to merely adopt digital as an add-on are being outcompeted on their home turf.

Scale

The magnitude of the internet is indeed mind-boggling.

It contains around 60 Trillion web pages. 300 hours of video are uploaded to YouTube every minute and 5 billion videos watched per day. Over 40 billion e-commerce transactions happen in a year. There are approximately 40,000 Google searches a second or 3.5 billion per day.

So in one sense, we must embrace the notion that having a digital soul is now table stakes for doing business in the modern world. You can’t just use digital, you have to be digital. It’s what your customer expects and it’s what your competitor is working on, if not already doing. If you haven’t found a way to wake up to this you are way behind.

For what purpose?

The central question posed by businesses facing an uncertain digital future is: how do I transform into a digital business?  I know of many executives in many boardrooms who are still asking this question, and who have established teams and projects to tackle this.

But there is, I would argue, a more important question they should be asking first. What is the purpose for this transformation? Are they transforming because they are scared or because they believe they can make a better business, and a better world for their customers, if they do?

I don’t agree that innovation is always good. Nor do I even think we are progressing at the rate we in the digital industry believe we are. Most progress in the world is happening within the narrow field of IT. In many other respects, we are living in an ageing world, using technology invented in the middle of last century, without the courage or faith to dream big.

Most of the big glass skyscrapers in Sandton are lawyers and consultancies, not innovators. They make their money from the status quo.

Worse still, we are facing challenges and problems that also came to light decades ago.

The great problems of our time – energy, climate, xenophobia, inequality, religious extremism and terrorism – have so far remained beyond the reach of this digital revolution. Silicon Valley – which for years held itself up as a bastion of social change has recently been mired in scandals ranging from misogyny to tax evasion and has exhibited the same selfish focus on self-enrichment that made the banking industry the enemy in the last crash.

Instead of understanding what purpose is, and how to become a more purposeful planet, we have prized new features over good features.

Up and down sides?

Digital innovation is also riddled with the same class and race biases that everything else is. In a country like South Africa, digital disruption can just as easily mean creating less dependency on unskilled labour – and removing rights from those people. This creates more inequality and allows the wealthy to use technology to further concentrate the wealth in a few powerful hands.

For many industries, digital disruption has been a positive thing. It has put the customer at the centre and forced more accountability, more transparent pricing and genuine innovation.

The software business itself is a good example of this where the open competition in app stores has led to incredible advances in what our phones are capable of doing.

But there is a darker side to this. Until recently, “Uberfication” was seen as a way to improve any business. But the more we learn about the ethics of that business, and the more we understand the human impact of removing regulation and how little accountability businesses like Uber and AirBnb take as they conquer city after city and displace incumbent after incumbent, the more we have to worry about focusing solely on innovation.

Customer-centricity, too, is not synonymous with good ethics. Piracy, it can be argued, is an extremely customer-centric phenomenon. Since the cost of transferring information is nearly free, should the content, therefore, be priced at zero?

This simplified view is the cornerstone – written or not – of the big tech players like Google and Facebook. These firms spend significant money supporting lobby groups who seek to make content free to share. Because their businesses depend on free content, the more the better. But this has had and will continue to have, a radical and detrimental impact on the content production business. It may be free to distribute content, but it’s certainly not free to produce it – particularly “news” or “journalistic” content.

A purposeful revolution?

The world’s resources are finite and fragile. This is a truth we are moving ever closer to understanding. Simply look at the devastating force of hurricanes and similarly look into the eyes of desperate refugees. Amazing new technologies are amazing, and for those of us who are affluent enough to enjoy plugging into VR consoles or having our bodies analysed every moment, the future indeed looks more fun than ever before.

But if we don’t wear a “purpose” lens – and we don’t hold those brands we do business with accountable for being purposeful and mindful – we will disrupt ourselves into a world that is far worse than the present one. This world will lack privacy and choice for the majority, and we will all face one global crisis after the next with ever more desperation.

What we need is purposeful revolution. I hope more of us, and more of the companies we work for or service will wonder not just how we can disrupt the status quo, but how we can do it with an eye to making the world a better place for all of us.


 

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