The Accelerating Pace of Digital Innovation

Digital innovation today is part of the essential lifeblood of business. Digital innovation capability allows companies to thrive in a constantly changing world. Digital innovation promotes competitiveness, enabling firms to create new products and services, to improve their quality, bring down costs, create new markets, and improve customer service.

The accelerating pace of digital innovation is something we have all learned to live with: it is part of the fabric of our lives. Where would we be without our phones and laptops? The three-year experiences of Covid intensified this process not simply by the mass adoption of online remote work, but by the further advance of digitalisation of customer interactions, supply chain operations and business processes.

Most large companies internationally, having established digital processes in vital activities, are now progressing along the path of an integrated digital operating model enabling continuous integration and delivery. Both in work and in personal life we are becoming increasingly embedded in digital networks that enhance our intelligence, efficiency and participation. Presently there are 3.6 internet-connected devices per person globally, and this is likely to continue to rise exponentially to 20 plus devices (Cisco 2022).

Of course, besides the immense opportunities this dense network of digital services has contributed to organisations and individuals, it is not without its perils, as apparently we become more vulnerable to insistent cyber-crime.

Waves of Digital Infrastructure

We have become used to successive waves of digital technology transforming our existence in recent decades, but in a stunning paper Edward Burley (2022), Macquarie’s Head of Digital Networks and Data said the combination of Artificial Intelligence, cloud computing and 5G networks will combine to transform the technological frontier.

Cloud computing has transformed front office functions including sales, invoicing, payments and customer service. But according to Burley there is still a long way to go as both government and business enterprises continue to migrate to the cloud. This will create an ongoing demand for more digital infrastructure and data centres. Instead of communications being personal on mobile phones and computers, in the future many connections will be machine-to-machine (M2M) enabling smart homes, and smart manufacturing. AI enables machine devices to communicate with each other facilitating the storage and management of information, automating many functions. All this will be based on the increasing sophistication of local data centres and cloud computing.

The Frontiers of Technology

A survey of the frontiers of technology UNCTAD (2021) suggests that the new frontier high technologies represent a US$350 billion market that could grow to US$3.2 trillion as soon as 2025. (The current global market for laptops is $102 billion, and for smart phones $522 billion). Unsurprisingly perhaps, the companies providing these frontier technologies are predominantly the US platform technology companies including Alphabet (Google), Apple, Amazon, Microsoft, Oracle and IBM. However, companies in Asia are active around robotics.

Among the frontier technologies it is the Internet of Things (IoT) based on Artificial Intelligence, 5G, and big data which has the greatest potential for growth. Another area of expansion is the Industrial Internet of Things (IIoT) using multiple inter-connected devices for manufacturing for example at Airbus and Boeing, Amazon, and many other large enterprises. Similarly, the market for robots is expanding exponentially with technological improvements.

The business sectors that are presently applying some of these advanced technologies include finance, retail, consumer, health care, professional services, utilities, education and resources. A summary of the capabilities of a selection of these frontier technologies illustrates their wide applicability.

Selected Frontier Technologies Capability

Artificial Intelligence  (AI) – a machine that can engage in cognitive activities typically performed by a human brain. AI is already applied in routine tasks as virtual assistants, and for detecting spam or fraud. New iterations of AI will harness machine learning and big data.

ChatGPT – the latest wave of digital hysteria arrived in early 2023 with ChatGPT created by a start-up called OpenAI.  ChatGPT can generate text, images and video as if it were created by humans. Microsoft has just invested $10 billion in OpenAI, and other tech majors will make similar commitments to infuse their software with this level of intelligence. The future implications for work, education and leisure are profound (The Economist 2023).

Internet of Things (IoT) –  IoT consists of many internet-enabled devices that collect and share data. The applications for this technology are vast, including wearable devices, smart homes, health care, smart cities and industrial automation.

Big Data – Big data refers to data sets of a scale beyond the ability of traditional database structures to capture, manage or process. Computers are enabled to access data previously inaccessible or unusable.

Blockchain – A blockchain is an immutable time stamped series of data records supervised by a cluster of computers not owned by any single entity. Blockchain serves as the base technology for cryptocurrencies, enabling peer-to-peer transactions that are open, secure and fast.

5G – 5G networks are the next generation of mobile internet connectivity, offering download speeds of 1-10 Gbps while 4G is 100Mbps (100 Mbps is 100 megabits per second. 1 Gbps or “a gig” is 10 times faster and equal to 1,000 Mbps).

3D Printing – 3D printing is also known as additive manufacturing, producing three dimensional objects based on a digital file. 3D printing can create complex objects using less material than traditional manufacturing and has recently been applied to construction.

Robotics – Robots are programmable machines that can carry out instructions and interact with the environment via sensors and actuators, either autonomously or semi-autonomously. Industrial robots doing routine work are now familiar but there are many other applications including security and autonomous vehicles (UNCTAD 2021).

The Holy Grail of the frontier of technology is the quantum computer. All the major computer companies (and many governments across the globe) have been doing their best to develop this for some years.

Simply put the classic computer deals in bits – with values of zero and one. Quantum computers use qubits which can take a value of zero or one, and zero and one at the same time. For reasons only accomplished mathematicians will grasp, this capacity of Quantum computer makes it infinitely more powerful than conventional computers. Qubits can perform calculations normal bits cannot. This massively enhanced processing power could address wicked complex problems like climate change and food scarcity in the world (Witt 2022).

Australian Policy

The Australian Government (2021) has recently made the commitment for the country to be firmly part of the new global digital economy and not a bystander, with a broad policy of growing the digital economy and developing skills. Key components of the strategy to enhance collaboration and strategic investment across the sector include:

Australia scores fairly well internationally in terms of digital literacy, but with the notable exception of Atlassian, Canva, and a handful of others, it has lacked new tech companies of scale to inspire others and influence business culture nationally. Australia though, does have a small but thriving tech-start up sector, and for example Canva has conquered world markets with its brilliant online design and publishing tool (Canva 2022).

Led by CEO 35-year-old Melanie Perkins and dedicated to “making complex things simple” Canva’s technology offers simple and pragmatic solutions to communication and design. Canva has made remarkable progress from launch in 2013 to 2,000+ employees in 2022, and after soaring to A$55 billion in 2021 Canva’s market valuation has settled at A$37 billion (Konrad 2021).

Global Standards?

The prospect of Artificial Intelligence adding an estimated 16 percent or US$13 trillion to global output by 2030, and the rush to invest in this sector, has led to the call for regulation of what might become the most disruptive technology we have yet encountered. A worry is the kind of uses authoritarian regimes might make of AI in terms of their own population and overseas countries. Around 60 countries have developed a policy for AI, and the ISO is developing international standards. A wide range of professional and engineering bodies are developing ethical and policy standards for responsible AI.

The G-7 countries have agreed a global partnership on development of AI, and the OECD is supporting this. There is a widely recognised need for democratic principles for responsible AI. Governments do wish to deploy AI for global social, and environmental benefit. The European Union wants to use AI in support of its policy for a Green Deal. The G-7 have called for AI to be used in support of the UN Sustainable Development Goals, calling for collaborative moonshots to address key problems including health care, climate science, and agriculture (Kelly et al 2022).

What About Human Capability?

The high-powered intellectual world of advanced computing often seems distant from the concerns of ordinary people (and sometimes it is). There are concerns about the increasing intensity of machine and data driven work. The prospect of human burn-out is real. The recent photographs of beds being moved into the offices of Elon Musk’s Twitter headquarters in San Francisco were not entirely reassuring about a work/life balance!

This sudden development was part of Musk’s campaign against hybrid working introduced in many tech companies during the Covid pandemic. At a time when the exponential increase in computing power available gives people an extraordinary capacity to improve their productivity, there has to be a careful cultural understanding of the definition of performance and the significance of work and quality of life being compatible (Whiting 2022).

On a brighter note there are of course, millions of jobs around the world opening up in advanced tech. The UNCTAD (2021) reports on the sectors where there are tens of thousands of new positions becoming available including AI software engineers and data scientists; blockchain engineers; 3 D printing; IoT; gene editing; big data; robotics; nanotechnology; and solar technology. In the transformation towards the 5G value chain there are expected to be 22 million jobs created by 2035.

It is a brave new digitally integrated world opening up with immense opportunities, the challenge is to ensure that this technology is safe, secure and inclusive.

Author

Thomas Clarke is a Fellow of the Royal Society of Arts, and editor of the Cambridge University Press Elements in Corporate Governance book series. Formerly he was Professor and Director at the UTS Centre for Corporate Governance.

References

Australian Government (2021) Digital Economy Strategy 2030, Australian Government https://digitaleconomy.pmc.gov.au/strategy.html

Edward Burley, Digital infrastructure: three waves, three opportunities, Perspective, Macquarie, 9 September 2022   https://www.macquarie.com/au/en/perspectives/digital-infrastructure-three-waves-three-opportunities.html#footnote-2

Canva (2022) Empowering the world to design, Canva https://www.canva.com/about/

Cisco Systems (2022) Cisco Annual Internet Report

Economist, Battle of the Labs – Machine Learnings, 4 February 2023

Alex Konrad (2021) Canva Raises At $40 Billion Valuation — Its Founders Are Pledging Away Most Of Their Wealth, Forbes 14 September 2021 https://www.forbes.com/sites/alexkonrad/2021/09/14/canva-raises-at-40-billion-valuation-and-founders-pledge-away-their-wealth/?sh=54e3af447ba9

1. Kelly, J. Meltzer and A. Renda (2022) Global AI Cooperation on the Ground, Brookings https://www.brookings.edu/research/ai-cooperation-on-the-ground-ai-research-and-development-on-a-global-scale/

OECD (2021) OECD Science, Technology and Innovation Outlook 2021, Paris: OECD https://www.google.com.au/books/edition/OECD_Science_Technology_and_Innovation_O/Vo0TEAAAQBAJ?hl=en&gbpv=1&printsec=frontcover

UNCTAD (2021) Technology and Innovation Report 2021, United Nations Conference on Trade and Development                                                                               https://unctad.org/page/technology-and-innovation-report-2021

Kate Whiting (2022) From proximity bias to productivity paranoia, here are 8 buzzwords from the world of hybrid work, Future of Work, World Economic Forum. 7 November 2022 https://www.weforum.org/agenda/2022/11/hybrid-work-trends-buzzwords/

Stephen Witt, The World Changing Race to Develop the Quantum Computer, The New Yorker, 12 December 2022   https://www.newyorker.com/magazine/2022/12/19/the-world-changing-race-to-develop-the-quantum-computer

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