What will you change in the Economy 4.0?
World Economic Forum, 2016 meeting, Mastering the Fourth Industrial Revolution
What will you change in the Economy 4.0 so you can sustain and grow again? The fourth industrial revolution is still in a nascent state. But the time to join in is now. It’s not only technology, but primarily a refreshed worldview. This is what I’m trying to explain to my customers and friends.
What will you change in the Economy 4.0?
I hope no the usual excuse “the web is eating our business”. I’ve found myself in a knowledge exchange session with three small-size owners recently and they all attributed with different words (and backgrounds) their growth decline to post-recession and the internet. Indeed, the world economy is changing at a pace never witnessed before in history.
Is it all for the worse? No, most is the opposite!
The Economy 4.0?
Digital transformation brings along four major forces[/inlinetweet] who comprise huge opportunity for business owners. Each on its own is breath-taking and each feeds upon the other:
- Digital transformation and digital economy. You can benefit from low-cost tools that secure global reach, best customer service, and experiences. With lower OpEx, you can reach many screens in one second. The peril is if you stay behind and do old-fashioned marketing, you’ll go out of your profession and industry (yes, FMCG’s as well)
- Rapid Urbanization. The 70% of global population will join metropolitan areas. Bigger communities, greater opportunities, more hubs for Growth, and synergies. The peril here is if our cities stay behind, with old infrastructure, systems, and policies
- New definitions and uses on Material-, Gene-, Bio-, Renewable Energy- and Nanotechnologies. Billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge. Possibilities will be multiplied by emerging technology in fields such as A.I., robotics, IoT, autonomous vehicles, 3-D printing, biotechnology, energy storage, and quantum computing.
- Demographics (in developed and emerging countries). Opportunity and Peril? Who will attract and own the young talent?
- Globalisation meaning economic collaboration networks, the increasing flow of goods, services, finance, people. This isn’t ignited by some conspiracy theory but through multinational companies networks and innovation hubs that scale new solutions. It won’t stop here.
We haven’t realized what is going on
In the first industrial revolution, it took the UK 154 years to double their per capita output. India and China recently managed this in just 16 and 12 years respectively. Their invasion is already something we feel…
When the telephone was introduced, it reached 1 million places/locations in 100 years. The app Angry Birds reached the same number of users in 35 days! The Change is happening, according to McKinsey, 10 times faster, or roughly 3,000 times the impact.
Retailers in agony
In my very first Borrow my Brain session, it was a retailer. We sat together one hour more, beyond my service time. He owns loans. He follows a low-price strategy, hurting profitability and brand value. He markets the same portfolio for 20 years. Has a brochure-website from 2009 without a story to tell, no e-shop basic facility.
When I’ve explained to him the first steps (reworking selectively portfolio, brand story and content, pricing “packages”), and then the CX criteria he must work upon and offered him options on a) google-blog-social hints and b) how to market he smiled again with confidence.
I refer to this customer of mine because it is an indicative example of Europe’s SME’s situation: marketing and replicating old-habits for long, not changing anything in business, dreaming premiums that don’t exist anymore. We should swiftly adjust to new realities.
You need a story
In my second customer interaction example, the same insights. We were discussing sales’ drop, cash-out personal investments, but not for the website, the etsy.com, social media, creative marketplaces, brand affinity and product diversification. When we’ve started discussing how to set online the story, how to market handcrafted uniqueness and create networks of influence the customer re-energized.
Just within the last 30 years, world trade has increased tenfold. Yes, tenfold increase. We possibly don’t feel it because of the negative news around, but this increase hasn’t happened in traditional channels. Can you grasp that the marketing channels of Chinese fashion and arts’ segments account for $197 billion? We must start thinking differently.
Technology has made possible new products and services that increase the efficiency and pleasure of our lives. Ordering a cab, booking a flight, buying a product, making a payment, listening to music, watching a film, or playing a game—any of these can now be done remotely. Even having a booking system on your website with only $60, a one-off cost (as the Bookly I’m using).
Imagine a robot capable of treating Ebola patients or cleaning up nuclear waste… You cannot wait until a house burns down to buy fire insurance on it. We cannot wait until there are massive dislocations in our society to prepare for the Fourth Industrial Revolution.
Jewelry producer feeling lost
In this customer case, we mined into another big issue. Having a website gives you the opportunity to target, test, learn and segment. So the actual challenge wasn’t the price strategy or the demand for his products, but where to market. There were countries showing more preference and sales’ increase. Immediately we’ve started discussing the region partners, presence and visits he should have done to build a network, along with the Google tools he should employ.
Next phase will be his diversification into new product lines, opening to new consumer targets. From gold rings to everyday accessories, under the same brand name. Simple moves with a unified scope to re-energize the business model, saving on costs and risks, while focusing on value targets.
This guy was working like a slave for 30 years without updating himself on evolution and techniques.
Two parallel worlds
On the one hand, we have the major forces of transformation, innovating, co-creating, presenting robots, drone-helicopters, and new software platforms. On the other hand, we have the business community who fights for survival without knowing where to start. And in this critical junction, thousands of amateurs trying to sell ad-hoc solutions to business owners, without helping them transform 360o.
That’s a big bet for governments in the digital agenda of national economies; how to raise and support the small-medium sized enterprises, spreading valuable information and trends. And of course, a high-stakes responsibility for all stakeholders, educators, events addressing business community.
Next issue, Talent
We are in the middle of the most rapid migration-shift in world’s history. Talent leaves in whichever direction (or mega-city) that ‘promises’ personal growth and development. Only in 2015-17, China’s mega-city Chongqing reached 33 million inhabitants(!), and 1.000 new migrants arrive from the countryside and foreign countries every day.
In my country, Greece, political leaders discuss the talent challenge under their political parties’ lenses without having any response plan on the 5 major forces presented above. Talent flocks away doing the right thing, going where they will excel and grow.
Brand your mega-city
The latest research studies (2016) indicate that the density of urban areas, globally, drives productivity gains because of increased opportunities (greater social and economic collaboration). Mega-cities attracting more talent and businesses, create more services. Look in Ireland.
Half of the global GDP’s growth between 2010-2030 will be generated in nearly 500 cities in emerging markets. Young talent will go to the cities’ of infrastructure, jobs, waste management, parks, opportunities, where the future seems more prosperous.
My advice to business owners…
Stay agile. On-guard. All year. Learn 24/7. Change anything that doesn’t work. Ask experts on how to solve problems with solutions. Train yourself, but train your staff. No one will live up through this on-going Transformation, in routine and safety zones.
Talk to peers, customers, suppliers employing tech smart tools. Spread questions, insights, and discussions. Do commerce off-and-online with an on-going customer marketing and service improvement policy. For all these, you have new solutions in the Economy 4.0.
I’m passionate about it. Don’t have a recipe, but my since my Ericsson journey started in 2009, I’ve seen huge disruptions destroying old models and careers and breeding new ones.
Growth shifts. Disruptions accelerated. A new societal deal is here. Powerful forces for Companies, Owners, Change-makers, and careers demand thoughtful and actionable responses. Don’t go there alone. “Borrow My Brain” and you can always Brand-build something unique.