The current global problems require a new approach. To continue trying to fix broken systems doesn’t work (healthcare, environment, financial, education, etc). The GFC clearly demonstrates the economic consequences of this global crisis. The consequences of environmental problems and the energy crisis send a clear message that they cannot be solved in the traditional way. These significant global developments are giving us an opportunity to make that break with the past and use transformational processes to create totally new ideas, new solutions, new policies and new business strategies.
In economic terms, the end-result of a full industry or sector transformation is ‘digital productivity’. This can be achieved by changing processes and systems, operating them more horizontally, with the assistance of big data, in order to make them more efficient and effective – often removing 50%+ of the current business operating costs. There are many examples where these cost savings are more like 70%-80%. This makes these changes not just incremental, but transformative.
Transformation – business case examples
· E-health could save $30 billion over 10 years and save 1,300 lives a year (Australia).
· Video monitoring will reduce aged care hospitalisation by 40%.
· Smart grids can save 25%-30% of energy costs.
· Smart communities suit our lifestyle (people want it – cost is important but not critical).
· Current healthcare, energy, education budgets need to be redirected. No new money is needed except seeding capital to kick-start the process.
Furthermore, our affluent western society has evolved and people/consumers are now looking for different values and different lifestyles, other than just simply earning more money. At least in these societies there is no longer any need for linear growth; sustainability is becoming a more important issue.
Global developments that are forcing transformation
· There will soon be 9 billion people – how to manage that?
· The environment has problems coping with the world’s human population.
· Whole business sectors are facing digital disruption.
· Healthcare in western economies could take 40% of national GDP by 2040 – unsustainable.
· Education system based on principles from the Middle Ages.
· People are more empowered and are moving away from traditional behaviour patterns.
· New jobs are in the new economy, not in the old one.
ICT cannot eradicate hunger and poverty in the world, but one thing is certain – without ICT it is never going to happen.
This applies to all of the challenges mentioned above. ICT alone cannot solve them, but without ICT none of them can be resolved in an effective and sustainable way without major social and economic disruptions. In the past, such challenges often led to wars or severe economic collapses.