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How digital innovation is changing markets, businesses and processes

    • Peschiera Borromeo (Milan)
    • 14 March 2016

          The baseline for discussions at this National Conference on digital innovation was that amid opportunities and stumbling blocks, the digital ecosystem is blazing a trail of profound change. The development and spread of new technologies was characterized as constituting an out-and-out revolution, from which no aspect of society is immune, whether it be the media, business, social life, the workplace, the organization of cities, or the public administration. One of the distinctive traits of this digital revolution is the increasingly wider use of big data, a phenomenon of enormous scope that is full of potential but also fraught with risks. The challenge is to extract meaning from infinite masses of data for a variety of purposes, such as monitoring social behavior, preventing the spread of epidemics, improving the safety of cities, and planning for the economic development of places based on people’s movements. In addition, if analyzed creatively, big data can yield new information for analysts than that originally sought. It was suggested that training people in handling big data is essential for managing such a powerful tool, and should focus on instilling descriptive, analytical, and storytelling skills, as well as encouraging the ethical use of such data.

          Estimates were cited indicating that each of us produces 4GB of data a year – a figure that is expected to grow. One need only access a social network, use a smartphone, or simply surf the web to hand over information regarding personal details, consumption patterns, or habits. The prospect looming is one where, in the not-too-distant future, people will be able to monetize the sale of their data. Indeed, many services today, especially those online such as social networks and e-mail accounts, are provided free in exchange for users’ information, but it was envisaged that the number of consumer goods obtainable through “payment” in the form of personal information will continue to grow.

          Technology has also had a game-changing impact on the organization of labor. In this regard, it was observed that the digital revolution is transforming many job descriptions, entailing the need to develop new professional roles and adapt skills, as well as inevitably signaling the end of some job profiles. It was stressed, however, that efforts should be made to avoid this culminating in a clash between absolute faith in innovation and lobbying for the preservation of old professions. The internet of things, big data analytics, and mobile and cloud computing were singled out as some of the challenges that businesses face to survive in a competitive environment – a climate so competitive that it has been described as Digital Darwinism, where technology and society evolve faster than an organization can adapt, such that some companies listed on the stock market five years ago no longer exist today. Ultimately, those that can come to grips with changes and know how to adapt quickly are the ones that thrive.

          A statistic was quoted indicating that thirty thousand Italian firms make regular use of one of the main architects of the retail revolution, namely, eBay, with 60% of them using it as an export vehicle. Real-time customization was also cited as a tool that is being increasingly adopted, with sites like Amazon changing the price of goods even day-to-day, based on sales trends. In short, consumer acquisitions are migrating online, and firms need to continue to tap into such sales. But it was emphasized that even the bricks and mortar retail model has changed, since the decisions of customers visiting a physical store are shaped by the information they have already gleaned online.

          In conclusion, the participants maintained that the Italian entrepreneurial system will only be able to keep pace if it overcomes its weaknesses, starting from a lack of strategic vision on the part of both businesses and the state. It was felt that this can be accomplished by recapturing the visionary engineering that made the country a leader in innovation in the twentieth century, ceasing to use the internet solely for recreational purposes (that is, as consumers rather than for producing wealth), training young people in online business models, reducing the fragmentation of the system (there being around forty thousand public authorities in the country), and, lastly, putting in place a robust administrative chain (which is to say an effective chain of command), as well as instilling efficiency in the public administration.

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