During the current COVID-19 pandemic, the speed at which governments change decisions and try to adapt to fluid situations is positively surprising. On the one hand, every day, new economic and social solutions are proposed. On the other hand, the speed with which a pandemic exposes our challenges and the assumptions under which we have lived for decades, is sobering.
There have always been challenges — from weaknesses in healthcare services, to information exchange processes and critical infrastructure protection systems. Yet, we probably assumed that there were controls, and that in a global emergency, help would be assured.
We believed that economic, monetary or social systems are balanced and secured through bilateral agreements between countries or global organizations such as the European Union, the UN or NATO.
However, the economics and business practices of the fourth revolution differ from previous industrial revolutions and that this will change our lives significantly. In fact, the economic developments in the fourth industrial revolution boil down to the fact that in previous eras, the economy was based on risk estimation and market perception. Today, it is founded on data from measurements and then processed in real time to make decisions – often by a machine. “As a result, businesses can move from guesswork to certainty.”
When the Lehman Brothers bank, founded in 1850, collapsed on 15 September 2008, it led to a great financial crisis that took the world more than 10 years from which to recover. We wondered what had failed. Was it a lack of proper market supervision, or lack of transparency? Some believed a conspiracy of elites was to blame, or greed and the pursuit of easy money, or perhaps an inadequate system of risk management and mismatched controls.
The paradigm of optimal risk management based on past events and prediction statistics has failed for a long time, and not only in the case of financial products. As an example, the introduction of the Sarbanes-Oxley Act 2002 was a case of closing the stable door after the Enron horse had bolted.
And there have been other crises. On March 11th, 2011, we learned about the accident at the Fukushima nuclear power plant in Japan. Over the following months, there were successive failures there. Although the initial cause was an earthquake, followed by a tsunami that struck the coast of Japan, safety analysts were still wondering how this could have happened. Did hazard identification and risk analysis fail? Or were the decisions about the facility’s security incorrect?
In all these cases, the tried and trusted risk management systems were found wanting. Classic business methods based on the experience of our forefathers — the knowledge gained from statistical operations – did not succeed in a world based on billions of interrelated global events, transactions and markets. In today’s world, change happens very rapidly, economies are integrated, communication systems permeate each other, and natural disasters simply happen.
Moving your business from guesswork to certainty.
There has hardly been another time when the need for innovation was greater. In the fourth industrial revolution, business will need to better measure events and make business decisions based on objective means – which is still a challenge for governments, business owners and citizens. This creates a challenge for those who want to predict what will happen in the economy or businesses in a few months, in the summer of 2020 or in the spring of 2021. Today, even speculation by financial analysts has more reservations than conclusions or recommendations.
However, there’s a thirst for knowledge based on data and facts. There is a need to measure everything and make decisions based on facts, not forecasts and assumptions.
The need for real data is so great that some citizens seem to be willing to bend their earlier conceptions about freedoms and privacy in the name of public health and safety. Mobile operators provide location data of subscribers, and social network traffic analysis is used to calculate potential “hot spots” for COVID-19 cases.
Companies may be required to show state authorities consignment notes for goods and these, in turn, could lead to discrepancies in commercial contracts in the name of national security, especially regarding medical equipment. Particularly in this case, it is essential to calculate production volumes with exact needs in individual hospitals or the use of a tree of decision-making graphs and artificial intelligence (AI) algorithms for the transfer of ventilators or doctors between individual cities, provinces or states.
In the current crisis have you noticed what’s happening? We are creating a new basis for the shape of our world after the pandemic. Undoubtedly, few people will give up relying on facts rather than assumptions. And once analyses are based on facts, we can expect that business will adopt these solutions very quickly and easily transfer them to increase the precision of actions and decisions taken, thus potentially increasing profits. As a result, the Internet of Things, mobility, cloud and AI will be the basis of business as never before, moving beyond the “nice to have” or optional extra.
So, what does this mean for technologies of the future?
What made one technology, the Internet, conquer the world and another, such as the pager, appear for a moment, only to disappear from our environment?
The first factor impacting a technology’s longevity and effectiveness concerns the duration. The train, car and airplane, developed some time ago, continue to meet an ongoing need for quick and efficient transportation. Others did not fare as well – in fact, decades ago, a device for extinguishing the flame on paraffin lamps was made obsolete by electricity. The pager, used primarily in hospitals to summon doctors, was inevitably replaced by superior technology. Other factors influencing a technology’s impact concern scale and scope. The Internet and the cell phone have found incalculable new uses and integrated with other new technologies such as artificial intelligence and the Internet of Things. If, like the Internet, a technology or its commercial manifestation, start to affect the world to such an extent that it becomes popular and universal in business and general use, it means we are dealing with a disruptive technology.
So, what’s next will be another technological and business cycle that will be created before our eyes. In the next part of my article, I’ll explain more regarding what this means for businesses worldwide.
 SPEED no limits in the digital era. ISBN: 978-83-64507-40-3 (6). www.speednolimits.com
©️ Picture and article by Aleksander Poniewierski, 2020
SPEED no limits in the digital era
by Aleksander Poniewierski