A short statement about Digitalization

Yes I know, the topic “Digitalization” is one of the most discussed topics at the moment and already getting on the nerves of some listeners.

But.

That is necessary. The effects of digitalization are ubiquitously. One of the reasons to intensively deal with this topic is exactly this omnipresence of data and information. Having skills and knowledge in this field is not a “nice2have” but an obligation, if you want to constantly succeed.

The book:

„Wie sie Ihr Unternehmen digital auf das nächste Zeitalter „Disruption“ vorbereiten“

by Kurt Matzler et.al. was a major push for me to write this commentary. It is a book with extremely compressed and well researched content regarding digitalization and a must for everybody working in IT or IT consulting I think.

But this blog entry is not supposed to be a book review.

Continually, I hear about those “Unicorns”. For quite a time I did not know what those fictional creatures should have to do with disruption or the change of whole industries, until I looked up the more applied definition of the term “unicorn”. Following that definition, unicorns (in the context of business and digitalization) are companies or start ups, which are not yet publicly traded at a stock exchange but who are already valued with 1 billion dollars or more. 1.000.000.000 $. That is a lot of money. Another, optional, criterion is, that those unicorns are often tech start-ups who do not have decades or centuries of history, but only existed for 5-10 years until reaching that valuation.

5 – 10 years fur such a valuation; 1.000.000.000 $; that corresponds with 100 luxury mansions or 10.000 well equipped upper class limousines.

How is that possible?

The answer to that question is also the answer to why digitalization is unstoppable.

It is the truly incredible technological development over the last decades, which did not happen and grow linear but exponentially. Exponential growth is characterized by a slow rise in the beginning, but a then, after a time, over proportional growth. At this point, I love referring to the rice grain / chessboard example:

It is, simply said, about a chessboard on which you put rice grains. On the first of the 64 fields of the board you put one grain. On the second you put two and on the third you put four grains. So you double the amount of grains on each field. Sounds unspectacular, huh? Until you reach the end of the chessboard, that is to say the 64th field, the amount of rice grains necessary would be higher than the total amount of rice grains available in the world. Not so unspectacular anymore, right?
That is exponential growth.

Analogous to that is Moore’s Law. The co-founder of Intel, Gordon Moore, postulated in the 1960ies, that the amount of transistors that fit on a computer micro chip will double every 12-24 months. He also thought, that the end of this development would be reached by the end of the 1970ies, he should be quite wrong. This kind of underestimation is still recognizable today, like nobody learned from history in that matter.

That kind of development is exactly what is happening today, but with a much higher intensity and frequency. This is a reason for the existence of unicorns and the earthquakes a lot of traditional industries are experiencing at the moment. Bigger and bigger disruptions and changes in less and less time.

Statements like: “Digitalization is everywhere and its important for companies” are sure right, but trivial and quite superficial.  Because those statements are only good to briefly participate in debates about digitalization. Only if you really drill down deep and consult experts, statistics and forecasts, you will realize how real and threatening this topic is for each and every kind of organization and that a lot of jobs and competencies will have to massively adapt to that change in order to not be abolished.

Wake up and get on the train is the message here!

I’d love to discuss this topic with you!

Stay Tuned.

Kind regards

Luca


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