I believe we are living in disruptive times. Things will never be the same anymore due to what Gartner is calling the Digital Industrial Economy and my employer Capgemini the Digital Transformation of our society in a global economy. During this era a lot of household incomes are already at stake. I forecast that many household incomes will follow. Other journalists and bloggers have published about the vaporizing middle class in the US but these publications are related to the export of manufacturing from the US to countries like China. Or, like in the EU, to the economic crisis. You haven’t seen anything yet: we will have to cope with the Digital Transformation of society.
The pace of Digital Transformation
Mind you, I do not wish to sound pessimistic. Society will survive, it has survived other disruptive events like manufacturing on a large scale using steam engines and the invention of the computer. In the first case society changed from agricultural to industrial. In the second case a lot of administrative clerks were not needed anymore. These changes took a while. This time it will be different. We not only have to adopt and digest the Digital Transformation, we have to do it in a pace we have never experienced before.
What is Digital Transformation?
Well, the Digital Transformation is the result of what is so popular today: Social Media, Mobile, Big Data and Cloud technologies. These technologies are changing the world for a lot of professions. In many cases these professions are not needed anymore. It’s a matter of time. Let me give you some examples.
Being a petrol head myself I am well aware of the fact that during my life I have experienced the growth of the car for the masses based on petrol engines. And hopefully I will experience also the result of oil wells drying up. Sure, we will exchange our petrol cars with cars with other, environmental friendly engines that can run without petrol. But there’s more: Google and some car manufacturers are testing driverless cars. These tests will be successful. Cars with driverless technology will be sold and become mainstream. And because these cars will have a positive impact on the amount of road accidents governments will forbid by law human drivers in the end. These laws will not only be applicable for personal cars but also forbid human truck drivers. Transportation companies will love this development: Driverless trucks don’t have to rest. They will keep rolling on offering a better business case. But a complete profession, including truck drivers, bus drivers, taxi drivers will not be necessary any more. And all hotels, motels, restaurants, convenience stores and other facilities supporting the current driver population will also be out of customers. Also passengers, including “driving dad”, will take less use of these facilities. They can take a nap or have a simple dinner while they are on their way. Driverless technology’s is a result of the Digital Transformation. It’s foundation is Big Data.
Central and local government
When a Dutch citizens needs a new passport, driver license or birth certificate today, he or she will have to go to a governmental office to obtain such official document from a civil servant. When do you think that these documents will be electronically distributed? We have already for some time the necessary technology like public key encryption, XML and chipcard. My guess is that it won’t take long. Dutch government official policy is to become a Digital Government. Many Dutch citizens do have already a DigiD, a Digital Identity, to identify themselves submitting there income tax form. One of the results of the Digital Transformation of governments will be that the profession of civil servants will be decimated. They will not be necessary any more.
In the Netherlands Retail is experiencing loss of revenues for some years. May shops are already closed. Some argue that this is a result of the economic crisis hitting the Netherlands the hardest in the EU. That might be true, but Etail is still growing, also in the Netherlands. Retail revenues are obtained as Etail revenues in 2013. I forecast that the Etail percentage will grow. Let’s assume the growth of Etail will stop at 50% of all Retail revenues. What are we going to do with 50% of the shops? This development is already visible in the Netherlands. Cloud services like Spotify killed the business of a local but famous retail chain of CD stores. A lifestyle department store decided in 2013 to close many of their Retail locations and withdraw to their initial footprint in the largest cities in the Netherlands. Some forecast that 30% of all Retail outlets in the Netherlands will close in 2015. To my opinion again a profession is at stake, from the shop manager to the supermarket shelf filler. We will not need their services in the same amount any more like we used to need.
A lot of people are employed in the ICT industry, also in the Netherlands. Many are still employed at an information technology company or in a ICT organization of companies and organizations in other branches or they are self employed. They still fulfill roles such as system manager, hardware engineer, software developer or project manager. But we will migrate most systems to the cloud in the next era. We will drop local or server installations of Microsoft Office and migrate to cloud based office solutions. Next decade we will look at Microsoft Office like we look today at WordPerfect, or Wang, or Windows 98 or the Macintosh. The result? The ICT profession will be at stake. We will not need those engineers, consultants and managers any more to install, implement and maintain local systems like we use to do. Next decade we will obtain ICT services like we obtain energy or telecommunication services today: from a socket in the wall or via the air.
Obtain any knowledge, location independent, and whenever you want it. College classes will be presented like TED presentations. You will execute your exams online and you will immediately know if you have passed the test, a fact that will be automatically published on your LinkedIn CV if you authorize the app. Cloud, Mobile and Big Data will take care of the distribution of knowledge. Coursera is a pretty good start. It will be common education practice in, again, the coming era. Universities have already started with distance learning. Colleges will follow. Students will select their favorite teachers online and on the fly because there’s no limitation to a digital classroom. We will not need many teachers anymore.
Press and publishing
Anybody can be an online publisher. WordPress and Google+ will grow into global newspapers. Advertisers will choose in which posts of which bloggers, including professional journalists, they want to advertise. Recently a Dutch publisher decided to spinoff or stop their business regarding many paper magazines including titles such as Playboy. We will not need paper publishing anymore as we used to as a result of the Digital Transformation. No print, no physical distribution, no retail sales. We don’t need it anymore.
You might argue that the Digital Transformation of society will only impact the professions mentioned before. Again: I don’t think so. I believe that the Digital Transformation of society will impact all countries, governments, businesses, citizens, professions, jobs and finally every live. As a result a large portion of the middle class will vaporize.
One of the Dutch government’s priorities is focusing policy on the aging society. Many fear that when the baby boomers will retire within the next decade we will not have enough youngsters to fulfill the baby boomers jobs and productivity. I don’t think so. Most of these jobs will be made obsolete by a Digital Transformation to Cloud, Mobile and Big Data. Baby boomer teachers will be replaced by online conference meetings. Baby boomer civil servants and their managers will be replaced by Mobile application forms.
I don’t see any “Digital Transformation” awareness at our western governments. They don’t make and implement any policies anticipating future impact of the Digital Transformation.My questions is: will Digital Transformation wait for the retirement of the baby boomers? What do you think?