The social effects of digitalization

Looking at the social effects of digitalization, it becomes clear that it has at least as much impact as the invention of currency, or even the written word

Distinguished guests from around the world attended the first ABB Technology Forum in Zurich in late October. Scientists from universities and research institutions, employees from R&D departments of tech companies, managers of renowned businesses, and founders of innovative startups met to exchange information and network at the illustrious Gottlieb Duttweiler Institute.

Presentations and podium discussions about the digital transformation offered insights into technological developments, challenges, and repercussions from a number of perspectives. It became clear that far more was at stake here than mere digitalization, the Internet of Things (IoT), or big data. This is about more than just technological innovation. The effects reach much further, influencing the economy, politics, and society — around the globe.

The prevalence of sensors, hardware that keeps getting more powerful as prices decline, the constant increase in connectivity, storing limitless quantities of data — by themselves, these things don’t add up to a digital transformation. They’re merely the prerequisites necessary for its technical implementation. The digital transformation is already changing every field that involves measurement, diagnosis, or control. But the most important question is, what are the actual benefits of these developments? This topic was also addressed at our Technology Forum. The purpose of IoT is to help solve real problems, to drive the development and implementation of new solutions, even in industries that, until now, have not typically been heavily digitized, for instance mining, shipping, and agriculture.

Digitalization also affects the value of products such as automobiles. A vehicle’s value is no longer purely a function of its hardware. Software increasingly plays a role as well. The motor — traditionally the focal point of engineering and innovation — is completely irrelevant in electric vehicle purchasing decisions. Furthermore, performance keeps increasing as dimensions become more compact.

New business models based on IoT were also discussed. Pay for use is one option here. Instead of focusing on products and connected devices, it’s time shift towards thinking about systems and connected services. Many of those services will be free of charge.

Looking for the social effects of digitalization, it becomes clear that it has at least as much impact as the invention of currency, or even writing.

Discussions on the topic of energy invited reflection. One of the biggest challenges is providing electricity to the world so all people have access to affordable electricity. Because people in developing countries and emerging markets want access to the world, they want information. At the same time, there are justified expectations regarding environmental concerns and energy efficiency which must be addressed. Which regions need which technologies, what fits in a particular society? Digitalization and additional technical innovations in the field of power and energy will play a central role in improving energy efficiency around the globe and implementing intelligent distribution systems.

The disadvantages for society that are implicit with digitalization were also addressed. Is the increase in connectedness and transparency not causing the end of privacy, a loss of jobs, and the division of society? Isn’t it only a small global elite that profits from digitalization? Do globalization and digitalization really lead to prosperity? And even if they do — increasing prosperity has not yet resulted in world peace.

Advanced technologies and the ability to communicate globally do not replace the need for social contact and trust, for local values. Because trust works in small, manageable units much better than it does in anonymous networks. So there are good reasons to observe the countertrend to globalization, de-globalization, as well.

One important conclusion reached at the ABB Technology Forum is that education, science, and research are of key importance so that the people of the world can benefit from the advantages of globalization, digitalization, and technological innovation.

Let’s write the future. Together.

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About the author

Reiner Schoenrock

I am the Head of Strategic Product and Innovation communications at ABB. Previously, I worked in various communication positions at Siemens and Infineon Technologies.
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