By Ideval Munhoz, president of T-Systems Brasil
Not many years ago, the ranking of the world's largest companies was dominated by banks and oil companies. Today, we see technology companies - Google, Apple, Amazon, Microsoft and Facebook - occupying these positions. At the same time, startups like Uber and AirBNB have been gaining in value, eclipsing other established companies.
Who hasn't heard success stories from innovative, technology-driven companies? On the other hand, we see a series of studies pointing out the risks of being accommodated during this period of technological transformation. In a recently published article, Claudia Nemat, member of the Board of Administration, Technology and Innovation at Deutsche Telekom, recalled that, in Germany, this concern with digital transformation applies to all industrial sectors, as well as small and medium-sized companies.
More than that, she asks whether it would be true that companies like Tesla, Apple or Uber could, in the future, threaten large German manufacturers such as Daimler, BMW or Volkswagen. It is not news that production conditions change all the time.
More than a hundred years ago, economist Joseph Schumpeter already showed concern about this phenomenon, which he called “creative destruction”, where new structures replace old ones. But this does not happen by chance. These changes are always brought about by innovation.
What we see again today is digitalization as a source of innovation, enabling and provoking fundamental and, at times, quite radical changes. Today we know that the creation of the assembly line and the container revolutionized production and logistics processes around the world, but digitization has the potential to change not only processes, but entire business models, establishing new value chains, organization of enterprise, mobility, communications, sales and monetary transactions.
For Claudia Nemat, these changes are what put in doubt whether the business model of car manufacturers established and developed over decades – selling cars to consumers -, can continue in the future. What if customers prefer to use mobility as a service, paying per kilometer traveled or hour used?
Mechanical engineers and wind turbine manufacturers are currently discussing similar business models for their customers. In a short time, these customers will not be comparing machines or turbines, but produced units, with payment based on revenue sharing.
There are many other examples of digital innovation, from driverless cars to cashierless supermarkets to washing machines that work when electricity is cheaper. All of this is becoming possible thanks to machine-to-machine communication, with other machines or people, connected through digital network infrastructures.
At the same time, it is not yet possible to measure the full innovative power of digitization. Before long, 5G technology will enable very high-speed bandwidths, lower latency and the ability to manage billions of sensors efficiently. By today's standards, there seems to be no limit to the potential that artificial intelligence has for analyzing data and making it useful.
If that's true, innovation through digitalization is fundamental and, more than that, more radical than the waves of innovation we've experienced before, which will keep us talking about digital or technology companies. But instead, perhaps we should accept that companies will have to face the digital transformation and successfully master it, or they will jeopardize their current market positions, perhaps their very existence, leaving in the near future only technology companies. .
Claudia Nemat says that it is common knowledge that innovation is the key to the success of the German economy, regardless of the sector. That's good, because being open to innovation and change is a matter of attitude. However, successfully implementing digital transformation requires knowledge and experience that are not universally available. Therefore, digitalization will come with partnerships and coalitions between companies and segments. This is true for Germany and also for Brazil.
Who hasn't heard success stories from innovative, technology-driven companies? On the other hand, we see a series of studies pointing out the risks of being accommodated during this period of technological transformation. In a recently published article, Claudia Nemat, member of the Board of Administration, Technology and Innovation at Deutsche Telekom, recalled that, in Germany, this concern with digital transformation applies to all industrial sectors, as well as small and medium-sized companies.
More than that, she asks whether it would be true that companies like Tesla, Apple or Uber could, in the future, threaten large German manufacturers such as Daimler, BMW or Volkswagen. It is not news that production conditions change all the time.
More than a hundred years ago, economist Joseph Schumpeter already showed concern about this phenomenon, which he called “creative destruction”, where new structures replace old ones. But this does not happen by chance. These changes are always brought about by innovation.
What we see again today is digitalization as a source of innovation, enabling and provoking fundamental and, at times, quite radical changes. Today we know that the creation of the assembly line and the container revolutionized production and logistics processes around the world, but digitization has the potential to change not only processes, but entire business models, establishing new value chains, organization of enterprise, mobility, communications, sales and monetary transactions.
For Claudia Nemat, these changes are what put in doubt whether the business model of car manufacturers established and developed over decades – selling cars to consumers -, can continue in the future. What if customers prefer to use mobility as a service, paying per kilometer traveled or hour used?
Mechanical engineers and wind turbine manufacturers are currently discussing similar business models for their customers. In a short time, these customers will not be comparing machines or turbines, but produced units, with payment based on revenue sharing.
There are many other examples of digital innovation, from driverless cars to cashierless supermarkets to washing machines that work when electricity is cheaper. All of this is becoming possible thanks to machine-to-machine communication, with other machines or people, connected through digital network infrastructures.
At the same time, it is not yet possible to measure the full innovative power of digitization. Before long, 5G technology will enable very high-speed bandwidths, lower latency and the ability to manage billions of sensors efficiently. By today's standards, there seems to be no limit to the potential that artificial intelligence has for analyzing data and making it useful.
If that's true, innovation through digitalization is fundamental and, more than that, more radical than the waves of innovation we've experienced before, which will keep us talking about digital or technology companies. But instead, perhaps we should accept that companies will have to face the digital transformation and successfully master it, or they will jeopardize their current market positions, perhaps their very existence, leaving in the near future only technology companies. .
Claudia Nemat says that it is common knowledge that innovation is the key to the success of the German economy, regardless of the sector. That's good, because being open to innovation and change is a matter of attitude. However, successfully implementing digital transformation requires knowledge and experience that are not universally available. Therefore, digitalization will come with partnerships and coalitions between companies and segments. This is true for Germany and also for Brazil.
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