The Digital economy: How you can avoid turning ‘Dinosaur’
The digital economy is fully installed on a global scale. Like air, it impacts everyone. The question is are you going to take advantage of that or wait to get swept away by its forceful tides?
Chidi Nnadozie, the Country Director for Nairobi-headquartered Ajua, formerly mSurvey, noted the fast dominance of the digital economy. Citing Microsoft CEO, Satya Nadella, he tweeted on Friday May 29th, 2020:
“Satya Nadella, Microsoft’s amiable CEO was spot on when he announced that COVID-19 accelerated two years of digital transformation in only 2 months. It’s amazing to see huge strides in a few months.”
The fourth (4th) industrial revolution is here. It is the landscape of digital innovation. Hence every citizen is being placed on the same scale, leaving new market reality to turn those who fail to adapt their skills into ‘Dinosaurs’ – some extinct species.
That reality played out recently. Forbes reported that 25 of the world top billionaires made more money during the lockdown than they did in previous months. The top gainers were founders of Facebook, Amazon, Microsoft and Zoom. Combined, they added more than $200 billion in revenues, while manufacturing, casinos, airlines, hospitality, sports and mine magnates slumped to near bankruptcy. That was another time Richard Branson, watching Virgin Australia going ‘bust’, could have wished he was Zuckerberg’s age.
How did those fortunate ultra-rich make more fortune when everyone else was turning a wreck? Well you can say ‘they have managed to digitize how the world connect and trade’. Consequently their businesses could hardly be locked despite the restriction placed on movement of people. Welcome to a bold digital world.
The strides of digital marvel, since a decade ago, have been rendering irrelevant previously famous corporations. When you compare the strange decline of Xerox and Kodak with the unending rise of Microsoft and Samsung Mobile, you should get a lesson in how the economy revolutionizes, whilst leaving, in its endless shift, relics in form of outsmarted business model, machines, gadgets, management approach and stale industrial skills.
The World is in the midst of a serious digital revolution. E-trade, e-travel, edutech, fintech, healthtech, self-driving cars; mobile maps, online worship, web meeting, mobile chat, gaming, and 3-D manufacturing are at the fore of an aggressive global transformation. This is a movement that is changing the way citizens relate, transact business, and work.
According global statistic portal, Statista, in 2018 e-retail sales accounted for $2.8 trillion, while 1.8 billion people worldwide purchase goods online. By 2021 the amount of global online transaction would have risen to $4.8 billion – that is almost twice of Africa’s nominal GDP, currently standing at $2.58 billion.
More, on Forbes Next Billion Dollar Startup List, about 95% were platform-based, driven by digital technologies. They vary in focus. The list includes Capsule, a tech enabled pharmacy; Tray.io, a workflow automation tool, and Mirror, an at-home fitness company.
Precisely, the 4th industrial revolution cannot be summed up now merely as a digital revolution but rather a lucrative field of:
- Artificial Intelligence
- 3D Printing, and then
The effect is that businesses will have to adjust to changing technologies; workers, as well, must upskill existing know-hows, to adapt and take advantage of the rapidly changing economy.
Why is that necessary?
While productivity and export is bound to increase, automation, especially in the industrial and manufacturing sector would be unfair to millions of people who live on paycheck. In the banking sector, we have seen artificial intelligence, fintech, and automated machine affecting recruitment of cashiers. Chat Bot like UBA’s ‘Leo’ is also replacing call centre staff. At retail giants such as IKEA, robot will be used to stock and restock the shelves. All these will leave fewer spaces for the human workforce.
Organisations must embrace new technologies. Since digitalization is on the rise, click and mortar business model will dominate the retail sector. Consumers will preorder via PC, then await home delivery or pick up in-store. The present social distancing guidelines make the model more compelling. It means, whatever business you do, start thinking of your customers as time-pressed, lazy and needing closer proximity to purchase grocery as well, as pick up laundry.
On the management side, artificial intelligence like SeeMoreTM can help HR sort through CV in few seconds to select the best resume. Microsoft has developed software and cloud services packages that make diagnoses easier and more accurate. Zoom, Google and Facebook have rolled out tools that make it easier for corporate employees to work from home (WFH).
In the field of Accounting and management, there are software solutions that readily provide balance, invoicing, credit rating and inventory services. Sage Software Nigeria is an example.
Apparently, the overall impacts are the reduction in work-place personnel; or, better still, a transformation in the roles and responsibilities of personnel. To recap, it is certain, that this new revolution will leave millions of workers either under-employed or unemployed.
To keep pace with this new economy, three (3) approaches are necessary. Each categorized as responsibilities:
Corporate: Business, especially in the industrial and manufacturing sectors, must help their workers retrain to manage robots and use artificial intelligence. To also ensure they remain solvent enough to sustain the livelihood of the workers on their payroll, each business must future-proof its business models. For instance, Toyota wouldn’t be a dominant force in 2040, when most countries pull petrol and diesel cars from their streets, except it does something that is similar in some way to what Tesla is doing presently. If it doesn’t, it will be guilty just as Blackberry should be guilty of letting investors down.This is it. The business environment is forever in flux. A winning business model can soon be outsmarted. Therefore, complacency can be dangerous in any industry. As Bill Gates wrote in his book “Business @ the Speed of Thought”, business will have to use radical technology to improve their competitive advantage. Today, that has made the difference between Amazon current market share and Wal-Mart strides in India after purchasing Flipkart. It does mean an app business in California may be as large as an oil company in Angola in 2025. Remember Facebook is an app business – but it houses more people than the Africa continent! Richard Branson made a point by selling part of Virgin’s businesses: the point is if you can no longer manage it, pass it to those who fit the challenge. It is better to secure workers livelihood than wallow in pride.
Government: It is the responsibility of government to create the needed ecosystem for enterprise to thrive. Some of the strategies to deploy are massive investment in enterprise zones, tax cuts for crucial sectors, infrastructure (not just roads and bridges but massive broadband access starting with continuous review of the cost of right of way) and incentives for research. In Nigeria, and Africa as a whole, kids need to learn coding on a massive scale; app-building must also be encouraged on a scale not seen before. The bulk of budget allocations must be centred on aiding citizens aged between 6 and 24, currently, to become more tech-savvy, research and entrepreneurship oriented.The difference between developed economies (US, China, Germany, China), Emerging Economies (Russia, Brazil, South Korea, South Africa etc) and Frontier Economies (Argentina, Nigeria, Egypt etc.) is a consequence, basically, of the focus of each government. A Government that focuses on improving human capital will soon rule the world. If Rome did what the US and Germany is currently doing rather than investing in Amphitheatre and circus fight, the Roman Empire would still have been strong!
The Individual: Entrepreneurship and digital skills will determine who is in the upper-middle class within the next 10 years. This reality is not applicable to Nigeria alone but also in South America, Europe and Asia. It is the responsibility of each citizen to pursue the ‘better life’ within available means. People are free to retrain – a clerk can retrain for nursing; electrician can shift to coding etc. Current businesses running below par can improve their entrepreneurship skills and add knowledge of new technology.