Digitalization Drives Prosperity

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Digitalization Drives Prosperity

The Information Revolution was triggered by the “big bang invention” of the microprocessor in 1971 in the United States.  So far, the United States has remained the vanguard of this revolution. 

Prior to that event, digital computing and communications, also known as digitalization, was limited to speeding up a few scientific and administrative functions of the mass production era.  It was apparent mostly in government, public utilities, and various big businesses using extremely expensive mainframes. 

The microprocessor ushered in 20 years, roughly 1971 to 1991, in which digitalization in the form of PCs largely replaced electro-mechanical and analog tools in business.  That, in turn, was followed by a second 20 years, approximately from 1992 to 2011, in which digitalization in the form of the Internet, MP3 players, and cell phones served as an enhancement to the rest of life and work. 

Now, we’re entering the third 20 years, expected to run from 2012 to 2031, when digitalization in the form of the “Internet of Things,” “Big Data,” and “Artificial Intelligence” will facilitate a price-performance quantum leap in virtually every aspect of our work and our lives.  In the process, it will transform every aspect of the world around us, from agriculture to transportation to entertainment to healthcare. 

Importantly, globalization means that every country in the world will have an opportunity to adopt this technology.  But, its impact will depend on each country’s readiness and willingness to be transformed. 

According to a recent study by Booz & Company, the climate for digital technology adoption is changing rapidly in nearly every country.1 

This study identified at least three major forces driving this shift toward digitalization: 

  • The first factor is the growing influence of the producers of digitalization technology.  Digital channels created by these producers are shaping the behavior of businesses as well as human interaction in ways that make them more amenable to the new technologies.
  • The second factor driving digitalization is the emergence of the user communities themselves, including both consumers and companies that make use of the digital infrastructure and products.  Globally, sales of online IT and digital telecom products grew by 6 percent in 2010, and by another 6 percent in 2011.2  Consumer-oriented devices and services, including cloud-based online IT services, saw even greater growth.  Demographically, the most important user group is known as Generation C — the so-called “connected generation” born after 1990...

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