Regardless of the angle we look at it or what definition we use to make sense of it, digital transformation is well on its way to changing the world as we know it. From new ways of connecting and exchanging information to improved wellbeing and unprecedented business opportunities in an era of constant connectivity, some major socio-cultural changes are ongoing.
In this section, we will look more closely at those areas that digital technologies have impacted the most, but also those that present opportunities for change in the future.
New ways of doing business
Although digital technologies entered society and the economy decades ago, it is the integration of the internet and the advancing connectedness of people and objects that has created entirely new opportunities and ways of doing business.
Technological advancements, interoperability and the declining costs of ICT have made technology fit for general purpose. Companies operating across all areas of activity are now able to design and build their operations using ready-made technological solutions to achieve efficiency and flexibility and to reach international markets.
Today, readily available solutions that build on software and internet-based technologies such as cloud computing and the analytics of large quantities of data (big data) are at the reach of every entrepreneur at much lower costs, and are driving growth in the internet economy.
Let’s have a look at two popular applications of digital solutions in the market and how they have changed business practices:
Electronic commerce, or e-commerce, has been defined “the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to be conducted online.” (OECD, 2011).
E-commerce mixes a wide variety of technologies – database management, cloud computing for managing and processing data, artificial intelligence to gain insights into customer preferences, shipping and order tracking, to name just a few. This results in an even wider variety of e-commerce practices, and it has opened the door for everyone to sell their products and services online.
It is important to note, however, how the interaction with customers and partners has led to fundamental changes in the consumer-merchant relation, innovating business practices in the e-commerce ecosystem.
Let’s look at the concrete example of Shopify, a Canadian e-commerce company.
Vendors – big and small – can open a store on Shopify and manage inventory, process transactions, optimise marketing, and manage clients all through the software provided by Shopify. First, Shopify focused on building e-commerce software that the average merchant could use, making it easy for those companies with less capabilities of building their own online infrastructure to use a ready-made solution. Secondly, Shopify has a large third-party applications market that can be installed for their online stores by vendors. On one side, these plugins can be used by merchants to improve their customers’ experience, while on the other side it builds a community of partners that are offering e-commerce-related services, without being directly in the commercial business. Originally, Shopify’s revenue came from charging a monthly subscription fee, but building on its existing infrastructure, they also started to offer merchant services such as payments, shipping and financial services products.
2) Participative networked platforms
A participative networked platform is an intermediary that enables users to collaborate and contribute to developing, extending, rating, commenting on and distributing user-created content (OECD, 2014).
The network effects business model is primarily focused on a large user base and user interaction and uses web-based technologies to provide value. Again, the variety of technologies available enabled a range of different distribution platforms to be developed, from social networks distributing information, wikis, blogs and podcasts to share knowledge, to service offer and demand platforms, and many more.
While many times the use of the platform is free for consumers, these businesses may monetise the platform in a variety of ways, including through voluntary contributions, advertising-based models, licensing of content and technology to third parties, selling goods and services to the community, and selling user data to market research or other firms.
Many more innovative ways of doing business have been created with the support of digital technologies, from online payment and trading services to online advertising or app stores, with some being strongly interconnected or even overlapping with each other.
Digital transformation in the classroom
In the education sector, digital transformation is not only about the technology in the classroom, it’s more about a cultural shift in how we approach knowledge.
With the support of digital tools and through the digitisation of information, knowledge is closer to us than ever: anyone with internet connectivity has instant access to learning resources, can share them through a click with peer students and teachers, and is accessible at any time, from everywhere.
Learning is no longer about accumulating knowledge; it is about developing a critical and analytical mindset to be able to make sense of the large amount of information that is available at the press of a button.
Digitalisation opens up a world of possibilities for education: customised learning experiences, collaboration between learners and teachers to create better and more relevant learning materials and facilitation of access to education for those in difficulty.
Learning becomes a very personal experience with an important measure of individualisation and flexibility.
When learning meets games and creativity
Learning computer language can be challenging, but it is an important skill in the digital era. Scratch, a programming language and an online community, supports young learners to create their own interactive stories, games and animations by thinking creatively, working collaboratively and reasoning systematically. They share interactive media such as stories, games and animation with people from all over the world. You can start your own programming journey with Scratch here: https://scratch.mit.edu/
As with other sectors, digital technologies can represent a strong vehicle for social innovation and progress at the disposal of governments and citizens alike.
At a time when our real and virtual worlds are always more interconnected and sometimes overlapping, boundaries and demographic identities are blurred. We become digital citizens of a global virtual community, with common interests and diverse backgrounds.
The concept of digital citizenship extends the idea of citizenship to the virtual space, using technology as a bridge between online and offline communities in order to engage in society. Digital tools are used to exercise and defend our democratic rights and responsibilities online, and to promote and protect human rights, democracy and the rule of law in cyberspace.
Electronic identification (eID) is a digital solution for people or organisations to prove electronically that they are who they say they are and thus gain access to services provided by government authorities, banks or other companies, for mobile payments and so on.
More and more countries today are using eID solutions as a way of supporting a variety of services that can be offered online in a way that is more secure and efficient. They open the doors for customised service delivery in both the public and private domains. Examples are dedicated access to government databases and personalised access to websites. Without eID, e-government will not go beyond granting access to generic information.
Improving wellbeing and the quality of, and access to, healthcare while populations age and grow and life expectancy increases are some of the challenges faced by healthcare systems. It’s also an area where digital technologies have shown an important potential for progress.
From enhancing patient-focused systems in hospitals and improving workforce conditions, to new ways of care, digital transformation in healthcare puts patients at the centre by helping healthcare providers optimise operations, understand patient needs, build trust and offer a better user experience overall.
Patients have the opportunity to be more active in looking after their health and wellbeing. For example, numerous mobile applications or wearable devices allow numerous health indicators, like heart rate, mobility, nutrition, sleep and so on, to be followed. They will record and analyse our daily activities and habits to help us lead a healthy lifestyle.
The implementation of certain technologies will offer the opportunity to make treatment more personalised, which is crucial in the case of patients that suffer from a variety of afflictions, for example.
On the other hand, technology can create a better environment for doctors and medical staff. Interconnected processes and systems and the automation of routine tasks enable them to do their jobs with greater accuracy and efficiency. Technology enables access to a large amount of data, providing important information that results in better treatments for patients.
Today, emerging technologies – the Internet of Things, virtual and augmented reality, robotics, cloud computing and big data – are completely reshaping how we interact with health professionals, how our data is used to make decisions about our treatment plans or used in innovative research.
But what does digital transformation mean for the future of jobs?
Influencer, social media manager or drone operator are just a few jobs that didn’t existed ten years ago. Like in any other area, new technologies have the potential to upend much of what we know about the way people work. What jobs will be available on the market in ten more years, which will become obsolete, and what skills will be more valuable?
While it is difficult to predict what the future of jobs will look like, one consideration is important: new technologies affect tasks, not jobs.
As is already visible across all sectors, digital technologies have changed what people do at work and how they do it – it’s not simply a matter of new jobs being created while others disappear. For example, we are able to use online storage spaces for sharing our documents that all our colleagues can access at any time, from everywhere, which means we can search for the information we need to do our work almost instantly and without having to ask anyone about it.
Job profiles as we know them today might change considerably by adding new tasks or modifying existing ones, requiring workers to adapt to new working cultures, methods and tools.
And while specialised skills specific to technology are on the rise – roles at the forefront of the data and AI economy as well as new roles in engineering, cloud computing and product development – and we will discuss those in the following chapters, one other trend is becoming visible: a moderate level of digital skills combined with soft skills will be in greater demand, reflecting the continuing importance of human interaction in the new economy.
Skills like communication, creativity, and collaboration are all practically impossible to automate, which means if you have these skills, you’ll be even more valuable to organisations in the future.
Eventually, all jobs will be reconfigured to include a mix of digital skills and competences related to cultural and social understanding, which means that even career options that are not traditionally considered tech will remain relevant in the bigger picture of the digital transformation of work.
In the fast-evolving world of digital transformation, all areas of activity are subject to change and therefore all workers – whether in tech or not – will need skills to cope in an ever-changing workplace. It is increasingly important that, in addition to knowledge, individuals acquire skills that help them anticipate changes and become more flexible and resilient.
Sign up to solve exercises
After completing chapter 1 you should be able to:
Express the main events that have contributed to the evolution of digital technologies, a phenomenon that is called the “digital revolution”.
Explain the main factors that represent the foundations of digital transformation.
Explain some of the socio-economic implications of the digital revolution.