Digital Technology Reshaping Business And Society
We are in the midst of a change presumably as big as the industrial revolution when it brought us steam power and electricity. IT is becoming mobile, and digitization affects all industries, the public sector and society as a whole. What impact will this have on areas such as employment, financial policy, our competition and the public sector?
What does digitization really mean in this sense?
Digitization itself is not a new phenomenon; the concept has for a long time encompassed technological development in general and IT in particular. Some areas in digitization include: Products and services that previously were analogue are becoming digital, such as music, film, travel arrangements, media and translations.
Traditional operations such as transportation, in the case of taxis, have seen companies such as Uber use today’s technology to develop everything from new business models to customer communication and service. We are also seeing entirely new services develop within various industries – one example of this is the financial sector with cryptocurrencies such as Bitcoin, crowdfunding such as FundedbyMe and digital payment services such as Klarna/Paypal, etc.
The internet of things, which is an umbrella term for the development by which machines, vehicles, goods, household appliances, clothes and other things are equipped with small, built-in sensors and computers. This area is thought to be able to create increased prosperity through optimisations and innovations in various branches. Traditional production will also be considerably affected by modern printing technology.
What is underway right now and what are the driving factors?
Mobility is a strong driving factor, but our development of technical infrastructure also plays a major part. Business has been globalised, and consumers and users have clear requirements and expectations driving development at a greater pace than in the past. It is difficult to say what affects what but there is much to indicate that we have a strong wave of innovation and entrepreneurship.
While digitisation brings great opportunities, it also demands advance planning and carefully devised strategy for companies, the public sector, and society alike. From a company perspective, there is every reason to review everything from business models, trademarks, collaborations, eco-systems, organisation, investments, culture/values etc. to identify the impact of digitization. We will in all likelihood see a number of new companies grow forth, while others at the same time redefine themselves or enter strategic alliances- sometimes unexpected ones.
From a social perspective, this affects employment, fiscal policy and education/school
Macroeconomics: There are many signs indicating that we need to update our traditional financial models and systems, as digitization means in part that supply and demand meet one another (for example Uber, Airbnb) and suppress prices per unit (Swedbank Diginomics Anna Felländer’s estimate 30-60%). Physical goods are becoming digital and no longer captured by GDP.
The labour market: within 20 years, some 50% of all Swedish jobs may be replaced by digital technology and robots, according to the foundation for strategic research. Carl Benedikt Frey, economic historian at Oxford University and Lund University, “The Future of Employment: How susceptible are jobs to computerisation?” At the same time, digitization is driving the development of new jobs. We need to ensure that we have a business climate that is supportive and create conditions making it possible for innovators and entrepreneurs to be able to realise their ideas, such as access to capital and competent resources. School and education develop competence in both the future digital society and the unique and individual aspects of future life. Cities play an increasingly important role, and will probably continue to do so, which will probably in turn exert even greater demands on the residential property and infrastructure of large cities.
All this together makes up a scenario that is well suited for the Nordic countries. Digitization affects all industries, the public sector and society as a whole.
And if we are willing to change – the Nordic Countries have every opportunity to remain competitive and have the cutting-edge!