10 KEY ISSUES
DIGITAL
TRANSFORMATION
AND ITS
SOCIOECONOMIC
IMPACT
A report by
and
Authors
Pepe Cerezo
Carlos Magro
Josep Salvatella
Editorial coordination
Pepe Cerezo
Anna Miracle
Design and layout
José Medina
A publication by:
and
Alguns drets reservats
Madrid, December 2014
2 / 32
INDEX
Introduction
4
1. The Weighting of the Digital Economy
5
2. The impact of digital transformation on wealth
and job creation
8
3. A complex, silent, dynamic economy
11
4. Meritocracy in networked times
13
5. Towards digital maturity
15
6. Mobile strategy
18
7. Mobile and mobile-only natives
20
8. The impact of the Digital Agenda, Europe 2020
21
9. Digital and territory. Increasingly local without
being less global
23
10. Education: from content to skills
25
Reference documents
27
About the authors
30
3 / 32
INTRODUCTION
INTRODUCTION
Digital is now an irreversible fact that has changed the world as we know it
and affects all aspects of our lives: economic, cultural, social and political,
etc. We live in a polyhedral society that is currently under construction
and therefore hard to define and analyse using traditional parameters and
metrics. We have just celebrated the WWW’s 25th anniversary since its public
launch. It is only now we are starting to see the extent of its impact, which has
not been entirely without controversy. The appearance of critical movements
in the debate about its present and future development is a symptom of its
normalisation and widespread acceptance in society. This document was
produced by Adigital with RocaSalvatella’s collaboration. Its purpose is to
identify the ten key points concerning digital transformation and to select
different sources that make it possible to assess its socioeconomic impact so
as to aid analysis, encourage discussion and understand the phenomenon
from different points of view.
4 / 32
1. THE WEIGHTING OF THE DIGITAL ECONOMY
1. THE WEIGHTING
OF THE DIGITAL
ECONOMY
It is estimated that more than 3 billion people will be connected to the
internet in 2016. The digital economy’s share of the average G20 country’s
GDP will then be 5%, rising to 12% in the most advanced economies. If the
digital economy were a country, it would be the fifth-largest in the world,
beaten only by the United States, China, Japan and India. The digital
economy has now become the driving force behind the most advanced
economies, where it accounts for 21% of GDP growth and has a larger share
of the economy than industries such as agriculture and energy. In Spain, the
total impact of the internet was estimated at 23,400 million euros (2.4% of
GDP) in 2011. 9,200 of that came from e-commerce, which was worth 12,000
million euros at the end of 2013.
Understanding the process of digital transformation involves accepting that
this transformation affects all industries; that the digital gap between
developed and developing countries has been inverted as time has gone
by, while users in the latter countries are becoming increasingly relevant
and influential players. Although the majority of organisations are already
adjusting and reorganising to adapt to the demands of this new digital
economy, not all of them are at the same stage of digital development.
In fact, as stated in Digital Transformation of Business (RocaSalvatella,
2014) although this process is unequal and takes place at different speeds in
different industries, it is possible to define four stages in the process of digital
transformation of companies:
•
Stage 1. Processes. In most companies, the initial digital steps focus on
mechanising and optimising processes. Industries such as banking started
out on this road more than thirty years ago when ATMs arrived and credit
and debit cards emerged. However, process mechanisation is not linear in
all industries and all functional areas. It is now common to see taxi drivers
with sat-nav but there are still some who do not accept credit cards. Process
digitisation is increasing as the benefits of implementing it outweigh the
investment costs.
•
Stage 2. Customer contact points. Apart from currently popular tools such
as Facebook and Twitter, the public demand service whenever (24/7) and
wherever. Mobile devices have also fostered exponentially higher levels of
customer interaction and demands on a vast scale. This has led to the need to
mechanise our front office. However, reviewing all of your customer contact
points requires an in-depth redesign of processes, systems, professional
profiles and even the company’s culture. That takes us into the territory of
segmented databases, personalisation and the user experience but also
openness and markets with increasing knowledge levels.
5 / 32
1. THE WEIGHTING OF THE DIGITAL ECONOMY
•
Stage 3. Services and products. If a company has mechanised its internal
processes and its customer contact points properly, it will then inevitably
begin the third stage of digitisation, which focuses on the design of new
services and products. For example, Amazon suggests books we might be
interested in reading or a doctor can monitor patients’ vital signs in real-time
while they are at home... This unleashes an avalanche of new opportunities
that used to be science fiction and will soon be natural market demands, if
they are not already.
•
Stage 4: Business model. Lastly, the final stage of this digital evolution is
reconsidering your business model, which is still an almost marginal step. In
most industries, the current dominant player handles the first three stages
with more or less agility but is highly resistant to determinedly exploring
the fourth stage. There is still something radical about changing your
business model and the people who are least embarrassed about exploring
the possibilities are the new players. Spotify in music, AirBnB and Booking
in tourism, Uber in public transport... The first line of defence against
these irreverent new players tends to be legal but they seem unstoppable
nonetheless.
6.0
4.0
7.8
8.1
9.0
8.0
3.1
3.2
3.4
3.5
3.6
3.9
3.9
3.9
3.9
4.0
4.0
4.1
4.2
4.2
4.4
4.5
4.5
4.5
4.5
4.5
4.5
4.7
4.8
4.8
5.1
5.2
5.2
5.4
5.4
5.8
5.9
6.2
6.5
6.6
Source: Eurostat y Bureau of
Economics and Statistics, National
Bureau of Statistics of China,
Nasscom, Brasscom, Russcom,
Jetro (2014).
10.0
2.0
0.0
TH
U
AU AN
NOSTRIA
RW IA
POPOL AY
RT AN
GE UG D
RM AL
A
SW R IT NY
O
IT M ALY
ZE A
RL NIA
A
S ND
RU PA
BE SS IN
DE LG IA*
NM IUM
FR AR
A K
LA NCE
TV
IA
NE GRE EU
TH CY EC
ER PR E
L U
CZ SLO AN S
EC S VE DS
L
H O N
RE VA IA
P KI
ES UBL A
T I
CR ON C
HU OA IA
N T
FI GA IA
NL RY
B A
BU RA ND
LG ZIL
*
S
UN
W ARI
E A
IT
ED SE DEN
LU S R
X T B
UN EM AT IA
B ES
IT
ED OU *
KI MA RG
NG LT
CH DO A
IN M
A*
I IN *
SO J REL DIA
UT AP AN
H AN D
KO **
RE *
A*
ICT’s percentage contribution
to GDP (2013).
12.0
LI
Figure 1:
10.7
11.0
Despite the fact that the digital development of companies is unequal,
according to OECD data, digital and communication technologies contribute
more than 4% to both the most developed economies in the world (Japan,
USA and EU) and emerging economies (BRICS).
*Year 2012 **Year 2011 ****Year 2010
What is more, the digital and IT industry companies included among the
world’s 2,000 largest companies have a stock market capitalisation close to 6
trillion euros, 15% of the value of the rest of the companies in the list. It is the
second-largest industry by stock-market capitalisation, beaten only by the
finance industry.
6 / 32
1. THE WEIGHTING OF THE DIGITAL ECONOMY
Apple, Microsoft and Google, which are paradigms of the digital economy, are
among the world’s largest companies in terms of stock market capitalisation.
They have recently been joined by Alibaba from China, which has become
the largest listed company with an overall value that placed it among the 20
largest companies in the world from the very first day of trading.
Figure 2:
Weighting of ICT industry
companies in the Forbes
2000 List.
Source: Forbes 2000 List (2014).
16
5986.6
14
7000
15
12
4578.5
6000
13
12
5000
10
4000
8
3000
6
2000
4
2
0
315,7
0
0.5
Capitalización
Bursátil 2013
1
1.5
2
Ventas 2013
2.5
3
3.5
1000
ICT
(billions of €)
0
Percentage
Beneficios 2013
However, the digital economy faces barriers and resistance (connectivity
and infrastructure, regulations, lack of skills, trust and accessibility to
data and content), which may slow down its development and bring
about insurmountable differences between the most and least advanced
economies (in terms of digital friction). This may result in the share of the
digital economy in countries with a greater degree of digital development and
those suffering from greater friction being more than twice the difference in
their GDP.
7 / 32
2. THE IMPACT OF DIGITAL TRANSFORMATION ON
WEALTH AND JOB CREATION
2. THE IMPACT OF
DIGITAL TRANSFORMATION ON WEALTH
AND JOB CREATION
No-one disputes that the process of digitalisation we are going through is
transforming all of our socioeconomic practices, one by one. Nor do they
question its role as the main driver behind future change. Information
technologies have significantly contributed to the growth of developed
economies over the last decade. Oulton (2012) estimates the contribution
made by the use of ICT to the economy as a whole and the average annual
contribution at more than 0.4% of GDP in a large number of economies. If the
use of ICT intensified in different countries to usage levels similar to Sweden,
the digital economy by itself would produce average annual growth of 0.6% in
a large number of developed economies.
0.7
0.71
0.66
0.7
0.7
0.6
0.51
0.28
0.36
0.4
0.62
0.61
0.7
0.71
0.79
0.94
0.79
0.68
0.58
0.39
0.5
0.44
0.48
0.57
0.53
0.62
0.7
0.68
0.76
0.76
0.81
0.81
0.73
0.6
0.53
0.7
0.58
0.66
0.76
0.8
0.64
Source: Nicholas Oulton, “Long Term
Implications of the ICT Revolution:
Applying the Lessons of Growth
Theory and Growth Accounting,”
Economic Modelling 29,
no. 5 (2012): 1722–1736.
0.9
0.66
Contribution of ICT use to
annual GDP growth since 2000.
1
0.46
Figure 3:
0.3
0.2
0.1
Current ICT usage intensity
US
A
IT
AL
Y
JA
NE
TH PA
N
ER
LA
N
SL DS
OV
EN
IA
UN
S
IT WED
ED
E
N
KI
NG
DO
M
AU
ST
RA
L
AU IA
ST
R
BE IA
LG
IU
CZ
CA M
EC
NA
H
RE DA
PU
B
DE LIC
NM
AR
K
SP
AI
N
FI
NL
AN
FR D
AN
GE CE
RM
A
HU NY
NG
A
IR RY
EL
AN
D
0
Usage intensity equivalent to current Swedish level
According to econometric analyses, in spite of the unfavourable global
economic situation in 2011, digitalisation contributed more than $193 billion
to the global economy and generated around 6 million jobs around the world.
Regional impact
Tabla 1:
Digitization’s impact on GDP
and jobs, 20011.
Region
8,3
618,699
Source: Booz & Company analysis.
COMMONWEALTH OF INDEPENDENT STATES
11,8
340,820
EAST ASIA AND THE PACIFIC
55,8
2,370,241
7,0
159,015
LATIN AMERICA AND THE CARIBBEAN
27,0
636,737
MIDDLE EAST AND NORTH AFRICA
16,5
377,772
NORTH AMERICA
25,3
167,650
9,4
1,117,753
GDP Impact (US$ Billions)
AFRICA
EASTERN EUROPA
SOUTH ASIA
WESTERN EUROPE
TOTAL
Number of jobs created
31,5
213,578
192,6
6,002,266
8 / 32
2. THE IMPACT OF DIGITAL TRANSFORMATION ON
WEALTH AND JOB CREATION
According to these estimates, a 10% increase in a country’s digitalisation
represents 0.75% per capita GDP growth. As an economic catalyst,
digitalisation is 4.7 times more powerful than the average impact of
broadband rollout, which is an average of 0.16% of per capita GDP. The
economic effect of digitalisation is also accelerating as the degree of
countries’ digitalisation progresses. Digitally more restrictive economies
make less profit, largely because they still have to establish an ICT
infrastructure making it possible to capitalise on the benefits of digitalisation.
However, the impact of digitalisation on both countries and industries
is unequal. Developed economies benefit almost 25% more in terms of
economic growth. The main reason for this difference in the effects of
digitalisation can be explained by structural differences between developed
and emerging economies. In developed economies, digitalisation improves
productivity and has a measurable effect on growth. However, the short-term
result may be the loss of unskilled jobs and offshoring of low value-added
jobs to emerging economies where labour is cheaper. Conversely, emerging
markets are more focussed on exports and driven by more commercial
sectors, so digitalisation tends to boost employment there.
Although, as we have seen, digitalisation is a major driving force behind
wealth and employment and, therefore, more policies are required to make
it possible to reduce factors that get in the way of and slow down its full
development (improving infrastructure to allow connectivity, enhancing the
skills of organisations, professionals and the public, and deregulation and
less state intervention), other authors see digitalisation as a potential source
of socioeconomic inequality. This second school of thought warns that,
while productivity, wealth and profits are constantly breaking records, the
average worker today is poorer than 15 years ago. Not only have the structure
and conditions of employment changed but, in many cases, jobs have
disappeared or are scarcer, giving rise to the so-called productivity paradox,
as set out by Brynjolfsson and McAfee.
We are therefore witnessing what the authors call the “great uncoupling”, i.e.
increasing separation between the economic growth curve and the increase
in the number of jobs. In the words of Brian Solis, we are approaching an era
of Digital Darwinism in which technology and society are evolving faster than
companies’ ability to adapt to them. There are three main answers to this
paradox. There are those who think we may be facing just another cyclical
crisis, like the others that have occurred throughout history. Others suggest
we are in a prolonged stage of economic stagnation. A third possibility is
that we are facing an unprecedented phenomenon: the end of work brought
about by excess technology.
Brynjolfsson and McAfee argue that the first two options are flawed as
they have not managed to incorporate technology into the analysis and
that, while the third option is right about the consequences, it is too
pessimistic. According to the authors, technology boosts productivity and
makes societies richer in general, but they also say that there is a dark
9 / 32
2. THE IMPACT OF DIGITAL TRANSFORMATION ON
WEALTH AND JOB CREATION
side: technological progress is making many kinds of work unnecessary
and is “impoverishing” the average worker. The problem is that technology
advances too quickly and a large proportion of individuals and organisations
are not capable of adapting fast enough. That creates a gap that could widen
over the coming years.
If the economic recovery in the USA and the Eurozone takes off, as expected,
analysis of the indicators will enable us to make out the true extent and new
rules of the labour market in the digital economy.
10 / 32
3. A COMPLEX, SILENT, DYNAMIC ECONOMY
3. A COMPLEX,
SILENT, DYNAMIC
ECONOMY
What classic economic theory is capable of responding to the challenges and
opportunities this new scenario presents? Are traditional approaches good
enough? Are the economics of the digital economy different to those of the
traditional economy? If so, what are its characteristics? What new business
models does it make possible? And what are the implications for free
competition, innovation and welfare? What kind of rules will help maximise
people’s welfare and what role should governments and social or business
institutions play?
It seems that in accordance with its liquid nature (Zygmunt Baumann), the
world has overflowed and complexity has become one of the main drivers
for organisations and individuals when weighing up and taking decisions.
Knowing how to live within and manage this complexity is now the main
attribute people need. So much so that some people are now speaking of a
new economic paradigm that rejects traditional hypotheses, which saw
the economy as a closed system in search of a state of equilibrium, in favour
of complex adaptive systems, which are open and evolve endogenously.
Systems whose normal state is not necessarily equilibrium. In this paradigm,
economic agents constantly change their strategies in response to changing
contexts they themselves create, which in turn modifies the results again,
constantly bringing about new changes in response. The traditional economy
has also avoided non-equilibrium states. Where the traditional economy sees
order, determination, deduction and stability, the economics of complexity
stress the contingent, the indeterminate, common sense and change.
It is not just a matter of incorporating the behaviour of agents into standard
economic models but of a complete change of paradigm in which actions
and strategies are constantly evolving, structures are constantly formed
and remade, in which phenomena are not visible based on the hypotheses
of equilibrium economics, and a new layer becomes relevant between
the macro and the micro. A second economy, as it has been called, would
run in parallel to the physical economy and would be: silent, connected,
autonomous, global, infinitely configurable, always active, self-adaptable
and self-managed. An economy that would constitute a kind of neurone
layer superimposed on the physical economy and that, due to its current
growth rate, would be the same size as the physical economy within a couple
of decades and then overtake it. However, it is an economy with a negative
side in terms of employment and wealth distribution. Lastly, markets and
organisations enable the knowledge of the few to reach the many, making
them collectively wiser. The key here is not so much the amount of knowledge
each individual possesses as the diversity of that knowledge and the skill to
combine and use it.
11 / 32
3. A COMPLEX, SILENT, DYNAMIC ECONOMY
Complex economies are those that make it possible to integrate large
amounts of knowledge into large networks of people to generate
knowledge-intensive products.
One clear example of this complex and polyhedral economy is the boom
in the collaborative economy, the sharing economy or the P2P economy.
This is quickly transforming traditional sectors such as accommodation
and transport. Following the latest venture capital financing rounds in
2014, the three largest companies in the accommodation sector of the
sharing economy are valued at one fifth of the three largest companies in
the traditional sector. Airbnb’s valuation is similar to the Accor Group’s.
Meanwhile, the three largest companies in the car rental sector in the
sharing economy now have a market value three quarters of the three largest
companies in the industry. Uber alone has a valuation that almost matches
the market value of the two largest companies, Avis and Hertz.
Figure 4 - 5:
Market value of the three
largest companies in the
Sharing Economy versus three
of the largest companies in the
accommodation and car hire
industries.
Source: Yahoo! Financials; Notas
de prensa de las compañías
Uber, Airbnb, Couchsurfing, Lyft,
RelayRides y Homeaway (2014).
6000
Accor
Marriot
6000
Hilton
6000
Couchsurfing
Homeaway
6000
Airbnb
6000
6000
0
Sharing Economy
Traditional
25000
Localiza
Avis
20000
Hertz
RelayRides
15000
Lyft
10000
Uber
5000
0
Sharing Economy
Traditional
In this new context there are obviously vast opportunities and new
production models but at the same time there are major challenges that
governments and legislatures need to respond to. The friction they are
causing in the collaborative economy in both the USA and in Europe are a
good sign of this. Once again doubts have arisen as to how to provide an
effective and rapid solution to a phenomenon that is growing and developing
at such a pace and speed that the structures of traditional organisations and
States are unable to understand it and act appropriately.
12 / 32
4.Meritocracy in networked times
4. MERITOCRACY IN
NETWORKED TIMES
The modern version of the concept of meritocracy was coined by the Labour
Party activist Michael Young, the founder of the Open University, in an
essay in 1958 titled The rise of the meritocracy, 1870-2033: An essay on
education and equality. Paradoxically, while the term was initially proposed
as a criticism of traditional, hierarchical models of power and relationships,
it was soon taken up by more liberal streams of socioeconomic thought.
The appearance of the internet, the expansion of more horizontal project
management practices (e.g. free software) and, generally speaking, the
appearance of information technologies and social networks have made
the concept fashionable again. Some people now wonder to what extent
the internet is characterised by meritocracy and the rule of equal reward
for equal talent. A system in which merit, individual ability and even
competitiveness would be rewarded and in which an individual’s contribution
would be proportionate to his/her reward.
Based on the available data, it seems that using or not using the internet
results in an additional gap that widens income differences between citizens.
Since ICT use has spread in the USA in 1995, internet use has had a much
greater impact on more developed areas than less-developed ones, leading
to an increase in pay differences between them.
0.2
0.15
Most developed
counties
0.1
Other counties
0.05
2000
1999
1998
1997
1996
1995
-0.05
1994
0
1993
Fuente: Forman, Chris; Avi Goldfarb
and Shane Greenstein. 2012. “The
Internet and Local Wages: A Puzzle”.
American Economic Review,
102(1), 556-75.
0.25
1992
Elasticity of internet
investment against average
salaries in US counties.
0.3
1991
Figure 6:
However, given the current extent of digital development, one might
wonder whether the internet and social networks are structures that
promote meritocracy. According to the experts, the answer would depend
on the extent of such networks’ connections and the number and quality
of connections to each node on the network. Network structures that are
not sufficiently dense or have few connections would give rise not to
a meritocracy but rather to a topocracy in which compensation would
depend on how each individual is connected to the others and what each one
would receive would be based not on their merits but instead primarily on
their network. Given a network of people who produce and distribute content
13 / 32
4.Meritocracy in networked times
and services, we would find “many nodes” that act as distributors. If you have
a well-connected group of people, the network will be more meritocratic.
There are self-organised network structures in which new forms of leadership
emerge and new content arises, which is chosen for its quality. However,
there are other contexts in which large intermediaries have appeared and in
which, although it is easier to find what you’re looking for, at lower cost to the
buyer and seller, de facto monopolies arise, bringing about an increase
in inequality.
14 / 32
5. TOWARDS DIGITAL MATURITY
5. TOWARDS DIGITAL
MATURITY
Digital is a transforming force. It certainly is from the point of view of the
demands of customers and employees that are intensively using new digital
technologies, and it should also be from the point of view of supply in
companies and organisations. However, except for some well-known cases,
organisations are not taking full advantage of the opportunities the digital
economy appears to offer. Many organisations have incorporated digital
into their customer relations, communication and marketing processes
and even their operations but few of them have truly reached the degree of
digital maturity needed to maximise its benefits. The data show that the
Digirati, organisations and companies that have sufficient digital maturity not
only to incorporate digital innovation but also to carry out comprehensive
transformation and benefit from it in business terms, are 26% more
profitable than their competitors and earn 9% more income.
Digital maturity is determined in two dimensions: digital intensity and
the intensity of management transformation. The former measures
the investment made in technological projects focusing on changing the
company’s operational management (customer relations, operations
and business model). The latter has to do with internal development
of the leadership capacities necessary to comprehensively digitally
transform the entire organisation. One is technology and the other affects
the organisational culture. One has more to do with ‘hardware’ and the
other with ‘software’. They are both important and only organisations that
simultaneously stand out in the two dimensions achieve digital maturity.
Combining them results in a matrix that describes four different degrees of
digital maturity.
•
1. Digital Beginners: these are organisations that have experimented
with and implemented technological solutions. Although some of them
add value to the business most of them do not. A coordinated strategy and
comprehensive vision of transformation are lacking.
•
2. Digital Fashionistas: these are organisations that are strongly motivated
to bring about digital change but their strategy is not based on real
knowledge of how such transformation can and must add value to the
business. In spite of the maturity of some of their business units, these
organisations still lack a global strategy as an organisation.
•
3. Digital Conservatives: these are organisations that put prudence ahead of
innovation. They see the importance of strategy, coordination, of questions
of governance and cultural organisation when tackling a transformation
process but they are very sceptical about the value of digital in such
processes. Although they are willing to invest in digital change, their slowness
and excessively cautious way of tackling these issues causes them to miss
opportunities that more risk-taking organisations benefit from.
15 / 32
5. TOWARDS DIGITAL MATURITY
•
4. Digirati. These are organisations that know how to add value to
their business through digital transformation. They combine vision and
governance with a commitment to investment. Thanks to their global vision
and integration of the entire organisation in the digital transformation
strategy, they manage to develop a digital culture that allows the
organisation to make new changes to its business model. They are
organisations that have achieved digital maturity.
The Initiative on the Digital Economy at MIT Sloan has quantified the digital
advantage in different companies in different industries. In a global survey
of 400 large companies, it found that the Digirati are an average of 26% more
profitable, achieve a 9% higher return on their assets and have a stock market
valuation 12% higher than their counterparts in the same industry. This study
also highlights that there are different speeds of digital transformation. While
some companies stand out for their investment in technologies, social media
and analytics, others focus more on managing transformation.
REVENUE GENERATION
DIGITAL INTENSITY
Distribution of the impact on
income, profits and market
valuation based on the
degree of intensity of
digital transformation.
Source: The Digital Advantage: How
digital leaders outperform their
peers in every industry: MIT Sloam
and CapGemini consulting, 2013.
+6%
+9%
-4%
-10%
PROFITABILITY
Basket of indicators
• Revenue / Employee
• Fixed Assets Turnover
(Revenue / Property, Plant
& Equipment)
DIGITAL INTENSITY
Figure 7:
TRANSFORMATION MANAGEMENT INTENSITY
-11%
+26%
-24%
+9%
Basket of indicators
• EBIT Margin
• Net Profit Margin
TRANSFORMATION MANAGEMENT INTENSITY
DIGITAL INTENSITY
MARKET VALUATION
-12%
+12%
-7%
+7%
Basket of indicators
• Tobin’s Q Ratio
• Price / Book Ratio
TRANSFORMATION MANAGEMENT INTENSITY
In this context, a model has been developed combining the 8 skills a
professional must develop to comprehensively digitally transform any
organisation and guarantee its digital maturity.
•
1. Digital knowledge: the ability to operate professionally and personally in
the digital economy.
•
2. Information management: the ability to search for, find, assess, organise
and share information in digital contexts.
•
3. Digital communication: the ability to communicate, maintain
relationships and collaborate efficiently with digital tools and in digital
environments.
16 / 32
5. TOWARDS DIGITAL MATURITY
•
4. Networking: the ability to work, collaborate and cooperate in
digital environments.
•
5. Continuous learning: the ability to manage learning autonomously,
know about and use digital resources, maintain and take part in
learning communities.
•
6. Strategic vision: the ability to understand the digital phenomenon and
incorporate it into the strategic approach of your organisation’s projects.
•
7. Network leadership: the ability to manage and coordinate networkdistributed teams to direct and coordinate work teams that are networkdistributed and spread among digital environments.
•
8. Customer orientation: the ability to understand, comprehend, know how
to interact with and meet the needs of new customers in digital contexts.
However, there is no single roadmap towards digitalisation. Achieving it
requires contextualisation of the digital challenge, focusing on investment,
involving the entire organisation and being persistent with transformation.
17 / 32
6. MOBILE STRATEGY
6. MOBILE STRATEGY
There are now more connected mobile devices than people in the world. 80%
of the global population has gained access to mobiles in the last two decades.
Since 2013, more than 1 billion smartphones have been sold and in 2014 most
companies are thinking of increasing their Wi-Fi capacity by at least 20% to
develop internal BYOD policies. There is more internet access from mobile
devices than from wired devices and in 2015 the proportion will be 8 to 2. The
average age at which people use their first mobile is around 13 years old and
72% of children aged 8 in the USA use one.
In 2020, it is expected that there will be 24 billion internet-connected
devices. For a vast and growing majority of users around the world, the
internet is essentially a mobile experience. A new universal connectivity
characterised by ubiquity (it is wherever you are), by being personalised,
social and ever-present. There are technologies and business models linked
to mobility, such as data, proximity marketing, geolocation and real-time
interaction, and wearable computing that will have an estimated impact of
around $96 billion in 2015.
Only in the mobile apps industry will contribute in 2018 €63 billion to the
European economy and will employ around five million people. Almost all
analyses agree on the unique size of the transformation we are experiencing.
Notable features include intense provision of instantaneous information,
globally, in real-time, with ubiquitous, constant and permanent access.
In this increasingly mobile context it is necessary to establish mobile
strategies that make it possible to tackle the impact of mobility on companies
and businesses. Mobile-mature organisations that are technology-intensive
but also intensively develop the internal capabilities necessary to transform
the entire organisation for mobile, which have a clear vision and strategy for
its implications.
18 / 32
6. MOBILE STRATEGY
In developed countries one third of users of smart handsets have made
purchases through them. Payment by mobile is less developed; generally
around 10% of smartphone users have done this.
Figure 8:
M-commerce and mobile
payment penetration as a
percentage of users.
Source: Google Our Mobile
Planet 2013.
22.7
VIETNAM
15.2
15.2
14
13.8
12.4
12.8
UKRAINE
CHINA
INDONESIA
KOREA
INDIA
THAILAND
USA
IRELAND
JAPAN
SINGAPORE
HONG KONG
TURKEY
MALAYSIA
AUSTRALIA
RUSSIA
MEXICO
UNITED KINGDOM
UAE
TAIWAN
SWITZERLAND
ROMANIA
SWEDEN
NEW ZEALAND
NORWAY
PHILIPPINES
GREECE
GERMANY
ISRAEL
DENMARK
SLOVAKIA
SAUDI ARABIA
AUSTRIA
BRAZIL
ITALY
CZECH REPUBLIC
SOUTH AFRICA
POLAND
CANADA
FRANCE
FINLAND
SPAIN
ARGENTINA
HUNGARY
PORTUGAL
NETHERLANDS
BELGIUM
6
5.3
59.8
44.5
69.4
56.6
56.2
54.2
51.3
45.8
44.2
44
9.1
43.5
5.9
43.2
10.1
43
11.2
42.4
4.3
40.7
26.2
39.3
7.1
39
2.9
38.8
12.8
38.3
7
36.5
4.8
36
17.8
33.6
13.7
33.4
4.5
32.7
17.6
32.7
12.8
31.9
3.1
31.5
3.5
31.5
3.5
31.2
14.3
31.2
15.9
30.5
6.1
30.5
6.3
30.4
4.6
30.3
3.2
30.2
26
29.7
9.3
29.5
18.6
28.5
3.1
26.9
2.3
26.1
18.9
25.6
1.4
24.7
8
24.7
15.6
24.2
11.8
21.2
23.7
17.7
10.7
16.2
Penetración M-Commerce
11.3
Penetración Pago Móvil
19 / 32
7. MOBILE AND MOBILE-ONLY NATIVES
7. MOBILE AND MOBILE-ONLY NATIVES
We are increasingly social and multitask more. We are better informed and
are connected for longer. Consumption of social media is growing, as is the
time we spend on the internet and the number of hours we spend watching
TV. Social recommendations are rising too. We are increasingly connecting
from more places and for more varied activities. We are increasingly
mobile and many people are now mobile-only. Two major demographic
trends prompt the need for organisations to adopt consistent and robust
mobile strategies. The first is the arrival of a new generation of consumers,
millennials (16-34), in developing economies. This group is larger than the
baby boom in the 1960s and is more technologically sophisticated, has a
greater appetite for consumption and a growing need to be connected. It is
also a generation whose first internet experience was mobile. The second
aspect is that most of the world’s population lives in developing markets in
which the internet is mainly reaching people in
mobile form.
72% of 8-year old children have used mobile devices for activities such as
online games, watching videos and using apps. As many as 38% of 2-year-old
children have used mobile devices (compared with 10% two years ago). The
number of children who use mobile devices every day has doubled in the last
two years from 8% to 17%. A recent study shows that the economic impact
of mobile apps in 2017 will comprise a $77 billion market with 286 billion
downloads. Each user will send data to more than 100 apps and services per
day.
Mobile natives make much more intense use of mobile internet. It is worth
highlighting that the proportion of mobile natives who use mobile internet
every day and consume content through mobile phones is twice that of other
internet users.
33
33
28
35
30
19
15
14
READING BOOKS
NATIVES
WATCHING THE NEWS
OTHERS
WATCHING THE NEWS
NATIVES
0
E-MAIL
OTHERS
5
8
5
20 / 32
4
PODCASTS
OTHERS
7
PODCASTS
NATIVES
15
READING BOOKS CONSUMING
CONTENT (FILMS, GAMES...) OTHERS
20
READING BOOKS CONSUMING
CONTENT (FILMS, GAMES...) NATIVES
25
26
READING BOOKS
OTHERS
40
E-MAIL
NATIVES
Source: Eurostat 2014.
40
45
DAILY ACCESS TO MOBILE INTERNET
OTHERS
Mobile phone use by mobile
natives in the EU.
50
DAILY ACCESS TO MOBILE INTERNET
NATIVES
Figure 9:
8. THE IMPACT OF THE DIGITAL AGENDA, EUROPE 2020
8. THE IMPACT OF
THE DIGITAL AGENDA, EUROPE 2020
The Digital Agenda for Europe is one of the seven initiatives in the Europe
2020 strategy. The aim is to improve the European growth model by creating
the necessary conditions for it to be smarter, more sustainable and more
inclusive. It is seeking to boost innovation and economic growth by helping
citizens and companies take advantage of the entire socioeconomic potential
of ICT, in particular the internet. The Agenda is based on 7 main pillars:
•
1. Dynamic digital single market.
•
2. Interoperability and standards
•
3. Trust and security
•
4. Fast and ultrafast internet access
•
5. Research and innovation
•
6. Enhancing digital literacy, skills and inclusion
•
7. ICT-enabled benefits for EU society
The first four concern improvement of the current conditions in the
economic and social framework, based on issues such as improving
infrastructure, increasing accessibility (for example, roaming is set to
be abolished in the single market; according to some estimates this could
generate a market worth €110 billion a year), legal standardisation and
telecommunications operator concentration (it is expected that the
European market will end up in the hands of 4 or 5 large groups). The many
forms of action having an immediate impact notably include open data and
intellectual property policies, security improvements and personal data
protection. The increase in connectivity and security for European users
will result in an increase in e-commerce and European companies’ presence
in the digital economy. The other three pillars of the Digital Agenda for
Europe have more to do with ensuring a better future through heavy
investment in research and innovation, training and skills acquisition and
ensuring environmental sustainability and social integration.
One of the priorities for Europe is for citizens and companies to develop
digital skills and culture. These digital skills should reduce the existing gap
between jobs offered and the skillsets of European professionals. They
would also lead to greater and better integration of digital into organisations,
not only by bringing in professionals with better digital skills but also by
encouraging digital transformation processes within organisations in terms of
both their internal processes and relations with customers and stakeholders.
The European Union is especially aware of the need for skills, technological
development and digital in European small and medium-sized enterprises.
21 / 32
8. THE IMPACT OF THE DIGITAL AGENDA, EUROPE 2020
Digital transformation through information technologies and communication
offers SMEs the opportunity to operate beyond their borders, achieve larger
and better segmented markets, create links between countries and improve
their value chains. Without complete development of the digital economy,
European SMEs run the risk of not being able to compete in a globalised
market. These seven pillars are organised in more than 100 actions, each of
which is in turn broken down into
specific projects.
Since the Digital Agenda began in 2009, the degree of development of the
Information Society in Europe has increased. However, the impact of the
Digital Agenda has especially been felt in the form of internet access, in terms
of both increased availability and speed. The impact on production has been
more modest, so a thoroughgoing review of the Digital Agenda is now
being considered.
80
76
70
60
75
62
57
90
82
73
73
65
65
64
50
47
40
40
37
73
30
20
13
57
10
10
12 15
15
47
39 42
12 14
INVESTMENT IN TELECOMMUNICATIONS
NETWORKS, IN BILLIONS...
2013
R&D INVESTMENT, IN BILLIONS
OF EUROS*
COMPANIES WITH 10 OR MORE EMPLOYEES
WHO SELL THROUGH THE INTERNET,
AS A PERCENTAGE OF...
2009
E-COMMERCE INCOME FOR COMPANIES WITH 10
OR MORE EMPLOYEES...
COMPANIES WITH 10 OR MORE EMPLOYEES WITH A
WEBPAGE, AS A PERCENTAGE OF...
INDIVIDUALS WHO PURCHASE CONTENT THROUGH
THE INTERNET, AS A PERCENTAGE OF...
INDIVIDUALS WHO BUY THROUGH THE INTERNET,
AS A PERCENTAGE OF INDIVIDUALS
DAILY USE OF THE INTERNET, AS A PERCENTAGE
OF INTERNET USERS IN ...
INDIVIDUALS WHO USE THE INTERNET,
AS A PERCENTAGE OF INDIVIDUALS
0
INDIVIDUALS WHO USE THE INTERNET,
AS A PERCENTAGE OF INDIVIDUALS
Source: Eurostat 2014.
98
90
MOBILE BROADBAND SUBSCRIPTIONS
PER 100 INDIVIDUALS
Impact of the Digital Agenda,
Europe 2020, main indicators.
100
HOMES WITH BROADBAND ACCESS,
PERCENTAGE
Figure 10:
* Dato más reciente 2012
22 / 32
9. DIGITAL Y TERRITORIO. CADA VEZ MÁS LOCAL,
SIN SER MENOS GLOBAL
9. DIGITAL AND
TERRITORY.
INCREASINGLY LOCAL WITHOUT BEING
LESS GLOBAL
Markets are global, organisations are global, professionals are global. No
one doubts that one of the main consequences of the internet has been to
accelerate the process of globalisation. Digital has narrowed distances
and blended differences. But one of its main features, ubiquity, has made
the internet a powerful tool for expanding the local and developing business
models focused on aspects such as local, geo-positioning, specialisation
and retail.
The internet, ubiquitous connections, mobility, social networks and social
software tools have brought about the development of virtual and horizontal
networks that connect the local with the global, people with environments,
and needs with possibilities, like never before. For more than ten years
now, the so-called long tail has explained, made sense of and offered new
opportunities for highly-specialised businesses regardless of their location
or size.
However, the internet is also “many internets” and they are not all the same.
The very local nature of the internet, which has increased its value, also
shapes it. The internet is heavily influenced by context (geographical,
economic, social and regulatory). It depends on many different factors,
various institutional frameworks, different forms of social and political
control and also—why not?— those who finance and economically support
it. There is not one single internet and that means that neither the services
offered nor the results returned by search engines are the same. Because
their users are not the same nor are the contexts they are in nor the moments
in which they use it. And that is especially important in the case of mobile
access. Brian Prentice identifies three basic ideas that configure the mobile
internet and the exchange of data and services:
•
1. Politicians’ demand for control
•
2. People’s desire for freedom
•
3. Companies’ search for profit
The internet has superimposed an additional layer on geographical
territory, a digital skin on our bodies, a digital identity for our battered
selves. Over the last 10 years, there has also been a rapid process of
hybridisation of digital and analogue, of physical territories and digital
networks. The internet has changed the concept of time, which we
understand as presence and our ways of relating with one another
If you look at the kind of content consumed on the internet, users access
local content more when shopping. There are differences based on the
mechanism used to access the internet, as individuals who purchase through
mobile phones tend to buy less local content, as they tend to buy content and
23 / 32
9. DIGITAL Y TERRITORIO. CADA VEZ MÁS LOCAL,
SIN SER MENOS GLOBAL
services rather than products (which they have a greater tendency to
buy locally).
Figure 11:
Percentage of consumers
who look for local content by
purchase stage and device.
Source: Ipsos Media - Google 2014.
83
90
80
66
70
60
57
64
53
50
43
37
40
40
30
20
10
0
INSPIRATION
SEARCHING
PURCHASING
AFTER SALES
Mobile
Computer
Online life is increasingly more local; but that does not stop it from being
more global at the same time. There will still be vast opportunities for
homogenisation and globalisation but also great possibilities for localisation.
It seems obvious that as we trust our connected devices more to explore the
physical environment digital information will form a superimposed layer to
blend, influence and configure the environments themselves and how we
relate to them. Mobility has freed us from belonging to a specific space. To
some extent it has freed us from taking a global view and has opened us up to
the possibility of the local, of territories, of the private sphere.
24 / 32
10. EDUCATION: FROM CONTENT TO SKILLS
10. EDUCATION:
FROM CONTENT
TO SKILLS
We are living in a extremely paradoxical era. We are living at a time of
extremely high levels of youth unemployment, while businesses say they
cannot find enough workers with the necessary skills. It would appear
that while technology is rapidly advancing, organisations and our
professional skills lag behind. 43% of employers say they cannot find
workers with the right knowledge and skills, while more than 75 million young
people around the world are jobless. Young people are three times more
likely than their parents’ generation not to be able to find work. One in eight
young people aged 15 to 24 in the OECD is not in education, employment or
training (NEET). Almost half of young people are not sure that their postcompulsory education has improved their expectations and opportunities
for finding work. However, in 2020 there will be a need for 85 million more
workers with medium-high skills.
The proportion of such jobs in more developed countries is growing. In
many OECD countries they now account for 20%. Most jobs are related to
organisational capital, i.e. knowledge of the business that is a basic factor in
improving productivity.
Figure 12:
Jobs that contribute to the
creation of Knowledge Capital
as a percentage of total
employees 2012.
Source: OECD Science, Technology
and Industry Scoreboard 2013.
USA
UNITED KINGDOM
ICELAND
NORWAY
FRANCE
GERMANY
SWEDEN
NETHERLANDS
BELGIUM
ESTONIA
SLOVENIA
FINLAND
IRELAND
AUSTRIA
LUXEMBOURG
CZECH REPUBLIC
POLAND
DENMARK
GREECE
SPAIN
HUNGARY
PORTUGAL
ITALY
SLOVAKIA
TURKEY
0.00
5.00
Organisational Capital
10.00
15.00
Computerised Information
20.00
R&D
25.00
Design
30.00
Mixed
The appearance of the digital world has transformed design, production
and distribution processes, and access to knowledge. It is a
transformation that has more to do with software than hardware, more to
do with values than technologies. The economic model and the associated
educational model based on generating and managing scarcity has
come to an end. The current educational model is not capable of meeting
our everyday needs. Ever-increasing doses of creativity and innovation
are required. The employees of the future will mainly deal in producing,
distributing and transforming knowledge. It’s not so much a matter of being
trained to perform a specific activity as being capable of meeting constant
needs to relearn.
25 / 32
10. EDUCATION: FROM CONTENT TO SKILLS
If one interprets learning as no longer being merely a question of assimilating
contents then it is a matter of being capable of assimilating values and
processes and acquiring skills and abilities such as collaborative working
and teamwork, time management, and the ability to search, filter and
prioritise information. New forms of distance learning, learning in the cloud
and collaborative learning are creating a learning ecosystem characterised by
its spatial, social and conceptual multiplicity. It is a new, open learning space
between formal and informal learning.
Creating more effective education and employment systems requires
new structures and new incentives in at least three areas. First of all,
more and better data are needed for decision-making. Students and their
families need more information about the career possibilities different
educational routes provide. Secondly, the best solutions arise from
collaboration between many different players working in a specific sector
and solving the skills imbalance at sector level. Thirdly, at national level,
integrators are needed who provide a global overview of the system. Their
role should be to gather and spread good practices both regionally and at
sector level.
Transforming the education and training system also requires people to
constantly answer questions such as: what skills are necessary in modern
economies? How can students and workers prepare for an uncertain labour
market? And how can a country make sure its existing skills are
used productively?
26 / 32
REFERENCE DOCUMENTS
REFERENCE
DOCUMENTS
1. The Weighting of the
Digital Economy
• The Digital Economy. June 2013 Briefing. Global Trends
• The Internet Economy in the G-20. BCG. 2012
• Adapt and Adopt: Governments’ Role in Internet Policy. BCG. 2012
• The new digital ecosystem reality: Nine trends rewriting the rules of
business. PWC 2013
• Greasing the wheels of the Internet economy. The connected world.
BCG. 2014
• The new digital economy: How it will transform business. PWC
• Digital Transformation of Business (RocaSalvatella, 2014)
2. The impact of digital
transformation on wealth
and job creation
• Race Against The Machine: How The Digital Revolution Is Accelerating
Innovation, Driving Productivity, and Irreversibly Transforming
Employment and The Economy. Erik Brynjolfsson & Andrew McAfee. 2012
• Meet your new boss: a machine. Larry Dignan. 2011
• How IT Costs More Jobs than It Creates. David Talbot. 2011
• Jobs, Productivity and the Great Decoupling.
Erik Brynjoflsson & Andrew McAfee. 2012
• How Technology is destroying jobs. David Rotman. 2013
• The Great Stagnation. Tyler Cowen. 2011
• Has the ideas machine broken down. The Economist. 2013
• If You Want To Avoid Being Replaced By A Robot, Here’s What You Need
To Know. DigitalTonto. 2014
3. A complex, silent, dynamic
economy
• Complexity Economics: A Different Framework for Economic Thought. W. Brian Arthur. 2013
• Rethinking economics using complexity theory.
D. Helbing & A. Kirman. 2013
27 / 32
REFERENCE DOCUMENTS
• IdeasLabs 2012 - Brian Arthur - Complexity Economics. Youtube
• The Atlas of economic complexity. Hausman, Hidalgo et al. MIT. 2011
• The Second Economy. W. Brian Arthur. 2011
4. Meritocracy
in networked times
• Meritocracy and topocracy of networks. Cesar Hidalgo. MIT
5. Towards
digital maturity
• The Digital Advantage. How digital leaders outperfom their peers
in every industry. Capgemini Consulting
• The Digital Advantage. How digital leaders outperfom their peers
in every industry. Capgemini Consulting
• the 8 skills a professional must develop. RocaSalvatella. 2014
6. Mobile strategy
• Through the mobile looking glass. BCG. 2013
• 50 incredible WiFi tech Statistics.The Huffingtonpost. 2014
7. Mobile and
mobile-only natives
• Through the mobile looking glass. BCG 2013
• The Demise of the Desktop: Digital Natives Are Mobile. Eileen Mullan. 2013
• Millennials, breaking the myths. Nielsen 2014
• The State of the Media. The Social Media report. Nielsen 2012
• Zero to eight. Children’s media use in America 2013.
Common Sense Media. 2013
28 / 32
REFERENCE DOCUMENTS
8. The impact of the Digital
Agenda, Europe 2020
• The Rise of DIgital Multitasker. KPMG. 2013
• Digital Agenda for Europe.
• Socio-economic Assessment of the Benefits of Social Networks for
Organisations.
9. Digital and territory.
Increasingly local without
being less global
• The New Local. The Economist. 2012
• The new digital ecosystem reality: Nine trens rewriting the rules
of business. PWC 2013
• Digital ecosystems. A framework for online business. 2011
10. Education: from
content to skills
• Digital Culture and Transforming Organisations: 8 Digital Skills for
Professional Success. . RocaSalvatella 2014
• Developing Key Competences at School in Europe. Eurydice 2012
• Education to employement: Designing a system that works. McKinsey. 2012
• Pillar 6: Enhancing digital literacy, skills and inclusion.
Digital Agenda for Europe
29 / 32
ABOUT THE AUTHORS
ABOUT
THE AUTHORS
PEPE CEREZO
Digital strategist and specialist in new digital business models, with special
focus on digital media. An expert in market analysis and digital media trends,
his aim is to transfer his knowledge to organisations and sectors that are
initiating their digital transformation. He designs and develops the projects
necessary in order for companies to integrate the advantages of the network
society into their strategy, organisation and culture. He frequently lectures at
events related to the information society and digital transformation.
CARLOS MAGRO
A specialist in brand building and positioning, reputation management, digital
communication, and management of content, networks and social media. He
works on digital transformation projects and has extensive experience in the
education sector. He has worked as a director of communication and marketing
for the School of Industrial Organisation (EOI), the International University of La
Rioja (UNIR) and the Community of Madrid (Fundación mi+d).
JOSEP SALVATELLA
A digital economy strategist, entrepreneur and analyst. He is an expert in
business models and strategic and organisational transformation in the
development of digital skills. He has 25 years’ experience in managing
companies in the retail sector, higher education, digital content and start-ups.
30 / 32
REFERENCE DOCUMENTS
31 / 32