by Nikesh Mistry, Sector Head, Industrial Automation, Gambica
The term “digital economy” is as easy to quantify as South American exports. There is more data being collected than can actually be stored. It has become so widespread that we can’t determine the impact it has made on each of the traditional sectors. With many moving towards edge computing, more data is being stored on the “edge” of networks, as opposed to a on a universal server. This inevitably means we have more data. More data enables a broader oversight of our economy as a whole. The key is how we make the most efficient use of this data to maximise productivity.
Economics is the study of, among other things, how resources are best allocated for production, distribution and consumption, from consumer level to overall economies. It is upon this understanding that we have built varying different economic systems, such as a mixed or market economy, and these have been adopted and developed in numerous ways by different countries depending on leadership preference. However, when it comes to the digital side of the economy, all types of economic systems, can, have and will adopt new technologies as it enables them to climb up the value-chain ladder.
Most adults in developed countries have access to at least one card-based form of digital payment. The technology for digital payment was shaped long before it was accepted, yet most adults now carry little cash, if any, given the convenience of contactless payments. While the trust of these mediums at a consumer level took time, it took even longer to convince banks that this payment method was an improvement on hard cash.
As the “manufacturer” of the new payment form, the Visa Association had to convince the banks that this was the correct direction to take. The initial challenges were relentless – once Visa had managed to convince the banks that this could vastly improve their profits, the means to adopt were justified. However, once the card had made it into households, the next challenge was thet the nation’s infrastructure had not caught up – not every petrol station had an ATM, nor every coffee shop a card machine. It was then that the banks, in turn, had to convince the government to increase investment in UK infrastructure in order to normalise this payment method.
This is parallel with other, newer digital technologies and the economy. Within all sectors of the economy, those “manufacturers” of digital technologies need to persuade those within different industries to adopt them by demonstrating the return on investment achievable. Indeed, it is not straightforward to illustrate a return on investment when data is the subject. However, a little funding from the right source to develop case studies where companies are able to visualise the ROI will surely enable more and more companies to begin to implement these technologies.
The ability to accrue large amounts of data and analyse it to assist processes is becoming a necessity for businesses to stay aligned with the competition. This doesn’t apply to any one sector or industry in particular. This is a global unification. Moving towards a more digital and also a more circular economy means those resources are far better used.
Within every industry we are able to see how artificial intelligence and the internet of things are forming an inclusiveness in sharing information and ideas among countries and corporations alike. The sharing of data is much more manageable and accessible than it has ever been. We must exploit this from an early stage and use it to capitalise on a competitive advantage.
The newest form of digital currency – cryptocurrency – has had a very slow uptake in the marketplace, thanks to uncertainty and its decentralised nature. But once reservations are overcome, could it eventually become the main form of currency in years to come? Perhaps yes, as there is no need for intermediaries or a central bank. Society is understandably cautious when faced with new and different ways of doing things, but if we look back on the past decade, we didn’t initially support half the technologies now used daily. Whether it was due to fear, or the technology itself being in its infancy, we cannot be certain.
But what we can be certain of is the opportunity current developments will present over the next decade. Newspapers and television used to be where we went for information, but now we are able to gather a quicker summary of any global situation online. The world is evolving, instead of getting left behind let’s learn with it.
Unsure about how the digital economy will develop? Or perhaps you want to be put in touch with experts in digital adoption? We can help at www.gambica.org.uk
Image provided by GAMBICA