Friday, September 15, 2017

Competition, Artificial Intelligence and Balloons

W. Edward Deming taught that quality is achieved by measuring as much as possible and reducing variations, and reducing variation is achieved by improving the system, not just pieces.  Japan widely adopted Deming's philosophies in the 1950s and became the 2nd biggest economy in the world.  Quality improvement didn't decrease jobs in Japan, it increased jobs.

AI now has the ability to expand and codify Deming's philosophies - to take them to the next level. AI can improve and standardize decision making based on logic, rather than the fear of missing objectives, bonuses or losing one's job.  It can continuously monitor for quality against specifications by analyzing streams of real-time data coming from embedded sensors connected to the IIoT, IoT and IoA (internet of agriculture). This means companies that are aggressive early adopters of these digital technologies will have more knowledge, higher quality and significant competitive advantages, which means more demand for their products, sales, customer service, manufacturing, distribution, etc.  It also means aggressive adopters will likely generate more jobs.

Market competition, however, is like a balloon, when one end is squeezed, it just moves and expands in another direction. When the market catches up with a competitive advantage and the advantage ceases, competition moves to another part of the ecosystem.  With sensors, IoT, automation and AI, it likely means competition will move to even higher levels of quality and precision - often in areas never before possible before sensors, IoT and AI, and the speed of response to fast changing trends and demands.  This opens up opportunities for more new innovations and jobs to be created.

Employment also has historically been like a balloon.  When one industry is contracting, another emerges and expands.  Digitizing the physical world to better understand it and create value is one of those expansion areas.  Digitizing requires creating digital twins of physical things by creating or capturing digital information, identifying, locating, categorizing, measuring, monitoring, managing and analyzing things.  These steps are followed by entrepreneurs and innovators developing new solutions based on what is learned.  Examples of things that have been or will be digitized include: healthcare, manufacturing, banking, transportation, crime fighting, agriculture, etc.  All of these digitization efforts spawn new ideas and businesses, and generate new jobs. Once the initial work of capturing the data from these digitization efforts is complete and automated, the next phase is understanding how to improve, manage and control systems as a result of the data.  The act of improving or adjusting systems based on the new data means even more work and jobs.

In this new digital world, there will be an immense amount of work to do.  Work like setting up and maintaining a continuously growing system of global sensors for collecting data, transmitting the data, storing it, securing it in data centers, analyzing it and creating new solutions.   The findings of the data analysis will then be used to develop new solutions, processes, systems and companies. As more processes, and both natural and artificial systems become increasingly digitized, work to control, manage and improve them will increase.  As systems of sensors and AI expand, more precision will be possible and competition will increase again in these areas, and as a result, more investments will be made and jobs created.

Once unknowns become knowns (through data capture and digitization), smart people will build new businesses and solutions to take advantage and add value on the new knowns. Investments and jobs will then migrate to the new frontier in search of competitive advantages.  When something new is made possible - jobs will be created.  As something new evolves into something ubiquitous it will be automated and competition will migrate outward.  The good news is that the circle, the edge, this mobile boundary of an expanding circumference represents more jobs and more opportunities for innovation, employment and competitive advantages.  This is the rule of the "Expanding Mobile Boundary of Innovation."

Read more from the Center for Digital Intelligence here:
  1. 7 Imperatives for Thriving During Digital Transformation
  2. What Artificial Intelligence Can Teach Us
  3. Speed as a Competitive Advantage in Digital Transformation
  4. Culture as a Competitive Advantage in Digital Transformation
  5. Digital Technologies and the Compression of both Time and Distance
  6. Patterns, Platforms and Automation
  7. Making the Hard Decisions in Digital Transformation
  8. Center for Digital Intelligence Interviews: Hitachi's Rob Tiffany on Industrial IoT 
  9. Digital Transformation and the New Rules for Start-Ups
  10. Digital Transformation and Leadership Development
  11. Digital Transformation and Competitive Decision-Making
  12. Combinatorial Nature of Digital Technologies and Legos
  13. Digital Transformation from 40,000 feet
  14. Winning in Chaos - Digital Leaders
  15. 13 Recommended Actions for Digital Transformation in Retail
  16. Mistakes in Retail Digital Transformation
  17. Winning Strategies for the Fourth Industrial Revolution
  18. Digital Transformation - Mindset Differences
  19. Analyzing Retail Through Digital Lenses
  20. Digital Thinking and Beyond!
  21. Measuring the Pace of Change in the Fourth Industrial Revolution
  22. How Digital Thinking Separates Retail Leaders from Laggards
  23. To Bot, or Not to Bot
  24. Oils, Bots, AI and Clogged Arteries
  25. Artificial Intelligence Out of Doors in the Kingdom of Robots
  26. How Digital Leaders are Different
  27. The Three Tsunamis of Digital Transformation - Be Prepared!
  28. Bots, AI and the Next 40 Months
  29. You Only Have 40 Months to Digitally Transform
  30. Digital Technologies and the Greater Good
  31. Video Report: 40 Months of Hyper-Digital Transformation
  32. Report: 40 Months of Hyper-Digital Transformation
  33. Virtual Moves to Real in with Sensors and Digital Transformation
  34. Technology Must Disappear in 2017
  35. Merging Humans with AI and Machine Learning Systems
  36. In Defense of the Human Experience in a Digital World
  37. Profits that Kill in the Age of Digital Transformation
  38. Competing in Future Time and Digital Transformation
  39. Digital Hope and Redemption in the Digital Age
  40. Digital Transformation and the Role of Faster
  41. Digital Transformation and the Law of Thermodynamics
  42. Jettison the Heavy Baggage and Digitally Transform
  43. Digital Transformation - The Dark Side
  44. Business is Not as Usual in Digital Transformation
  45. 15 Rules for Winning in Digital Transformation
  46. The End Goal of Digital Transformation
  47. Digital Transformation and the Ignorance Penalty
  48. Surviving the Three Ages of Digital Transformation
  49. The Advantages of an Advantage in Digital Transformation
  50. From Digital to Hyper-Transformation
  51. Believers, Non-Believers and Digital Transformation
  52. Forces Driving the Digital Transformation Era
  53. Digital Transformation Requires Agility and Energy Measurement
  54. A Doctrine for Digital Transformation is Required
  55. Digital Transformation and Its Role in Mobility and Competition
  56. A Revolution in Precision Through IoT, Analytics and Mobility
  57. Competing in Digital Transformation and Mobility
  58. Ambiguity and Digital Transformation
  59. Digital Transformation and Mobility - Macro-Forces and Timing
  60. Mobile and IoT Technologies are Inside the Curve of Human Time
Kevin Benedict
President, Principal Analyst, Futurist, the Center for Digital Intelligence™
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***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I work with and have worked with many of the companies mentioned in my articles.