Digital disruption – if you are not part of it, then it is because it is either happening to you and you are resisting, or worse, you don’t even see it coming.
I hope most of you are thinking that’s a ridiculous thing to say. Digital disruption is presented to us as “the next big thing occurring simultaneously across all industries around the world” and “life as we know it will never be the same again.” New business models rise, old ones are trashed, and governments will be transformed by people power. Digital disruption is talked about in terms of a zero-sum game: as one new business model rises, a traditional business model crashes and burns (e.g. Uber vs. the taxi industry). So act fast, get on board, and ride this incredible wave of change.
You can’t help thinking we have heard some of this before – Y2K, the dotcom era, and that ubiquitous term “e-government.” E-government, we were led to believe in the early 2000s, would enable us to sit at home and electronically vote on the issue of the day rather than rely on governments to do it for us. It’s interesting to note that digital technology is a common denominator behind all these transformations. The computers we had to fix to survive the turn of the century were… digital. The dotcom era and the rise of the Internet were … digital. And e-government, well how digital that was going to be (this is one area where aspirations didn’t quite match reality at the time, but are now quickly catching up). So digital is perhaps not as new as the marketing hype would have us believe.
This digital disruption discussion reminds me of the warnings around the impending death of the cinema industry when VCRs became widely available. Who would ever want to go to the cinema to watch a movie when you could watch it in the comfort of your own home? And for a time there, cinemas were closing down in droves; a zero-sum game was unfolding as the corner video store replaced the local cinema. But then the cinema owners struck back and completely transformed their offer. Today’s cinematic experience is a far cry from the 1980s, with multiplexes and premium seating now standard. Their offer is now based on providing all-around entertainment value instead of simply watching a movie. This is innovation in action where an industry responded to the challenges of the time and transformed to a new and more sustainable business model. Interesting to note, the cinema owners have endured, where the video store owner didn’t.
Getting back to digital disruption, it’s a mistake to focus on the digital technology aspects instead of the innovation potential enabled by digital. And innovation is not just a tech thing – it is something that all industries need to be thinking about. The IT industry is very good at pitching digital as the enabler and prerequisite for innovation, to the point that innovation can seem to be within the exclusive domain of IT. For example, we have just had a federal election campaign in Australia, where the incumbent government made a strong pitch around innovation, but just barely won the election. There is speculation that among the many reasons for the close result is that the innovation message didn’t cut through with large sections of the electorate. I think one of the reasons is that innovation is often presented in the same breath as digital and technology, and digital disruption is seen as a zero-sum game, with as many losers as winners. This could create the perception that innovation is something to fear and be avoided – especially if you are outside the IT industry. However, there are many sections of the economy and the labor market where innovation is needed but it may not be dependent on IT or IT may only be an enabler. Instead of encouraging innovation, the digital disruption message may be pushing people away.
The dialogue around digital disruption needs to be re-tuned towards creating an environment where every industry, including government, has incentives to innovate to create value. Digital disruption can make us all winners if we use digital data to deliver informed business insight. Business insight combined with new inventions or ideas, which do not have to be IT related, are the ingredients of innovation.
What is different about the current era of digital disruption versus Y2K, dotcom, and e-government? The focus is on data and information as enablers to innovation, rather than the technology itself as the next big thing. Discovering the next big thing is not necessarily the exclusive domain of the IT industry – the IT industry is providing a rich source of raw materials for all industries and governments to survive and thrive in these uncertain and changing times. For government agencies, the opportunity to create public value from leveraging the data generated through the digital revolution has never been better.