The Digital Revolution

The information Age

As a kid who grew up in the 1990s I have always seen myself as part of the first generation of kids who truly grew up with modern communications technology, with cell phones, home computers and the internet (world wide web) as an integral part of everyday life. I remember that computer science was the only subject in school that us kids knew much better than the teachers, to many grown ups frustration. In 1995 <1% of the world population had access to internet connection. It almost sounds ridiculously low and I now realize how fortunate I am to have come from a Swedish middle class home with a dad and an older brother who were (still are) both computer geeks. I'm not sure what year we first got a modem but I do remember how slow it was and how my mum yelled at my brother to disconnect so that she could use the phone. Much has happened since then. In 2000 the number of internet users globally was around 6.7%, five years later it reached one billion users. The second billion was reached in 2010 and the third billionth user is expected at the end of this year, then accounting for 40% of the global population (figure 1). As of 2013 Asia stands for almost 50% of internet users globally (figure 2).  

          Fig. 1 Internet users globally                    

Fig. 2 Internet users by region

graph of internet users
Source:Internet live stats
Economy 4.0
We are now in the middle of a third industrial revolution - the information age. The invention of the steam engine turned agricultural society (economy 1.0) into industrial society (economy 2.0) and wide-spread education turned it into the service society (economy 3.0). Now, the invention of computers, the internet, the world wide web and social media are transforming service societies into digital societies (economy 4.0). With computers reaching the level of human brainpower in perhaps 10 years, with intelligent service robots, and Big data some 50 % of jobs in the industrial and service sectors could be lost within the next 20 years (Helbing, 2013). Example of changes in different sectors include: 
- Education: Massice Open Online Courses (MOOCS)
- Research: Big Data Analytics
- Transportation: self-driving cars, drone transportation of goods
- Shopping: online stores for example Amazon, eBay
- Production: robots, 3D printers
- Health care: personalized medicine
- Politics: citizen participation
- Financial: crypto currencies, algorithmic trade, online co-funding platforms 
- Military: drones, cyber warfare 

Governing the masses?
Some believe that we need more government resources to watch over all these new activities, however, it might not be plausible. Because the amount of data doubles every year and the complexity of networked systems is growing even faster (see figure 3) top-down control will become less and less effective. Moreover, many of the industrialized nations already have record high public debt levels of 100 to 200 % of their annual productivity. How should we be able to pay for this? or even more regulation?
Fig. 3 Data evolution
big data
Source: Helbing, 2013
One logical answer is bottom-up self control. While this vision has not worked well in the past due to coordination and market failures there is strong evidence from complexity research that smaller but connected units of decision-making make for stronger resilience of the overall system. Nobel prize winner Elinor Ostrom have demonstrated that guided self-organization can produce desirable outcomes in a flexible and more efficient way. One example of such organization is the self-ruling of Swedish municipalities, within the framework of national policy. In a rapidly changing world, feedback processes must enable the system to adapt in a flexible manner to local conditions and needs. In the recent Swedish election we experienced a growing disconnect between national politics and local needs and opinions. Political feedback processes, from the local to the national, have been ignored or broken down. Perhaps real time data could help in this matter by providing a more direct link between citizens and politicians. 

What about the future economy?
We know from environmental science that market failures and coordination problems are two of the main reasons why we are degrading our planet in such a rapid pace. However, we also know that top-down control seldom works well in protecting local peoples and habitats. Therefore one could argue that there needs to be some kind of mix between both self-regulation and top down enforcement of rules and regulations. In any case, it seems like a new economy is already underway whether we like it or not. A participatory market society is on the rise. As the 20th century was an era of democratization of consumption the 21st century can become an era of democratization of production. Social media platforms make it possible to bring ideas and skilled workers together. This could complement large-scale industrial production by creating more diverse production, tailored to individual needs. Thus, while computers will replace old manufacturing jobs we might have an opportunity to replace such jobs with more creative activities. 

New challenges

Information is everywhere and instantly available in ways that dissolves borders. Secrets will be very hard to keep. Changes will come with extreme speed, so much so that our knowledge will likely be outdated by the time we make decisions. We therefore need the help of smart devices that can keep us up to date. The more connected different systems are the higher the complexity and less controllable they become. Increased bureaucracy will not help solve this issue, but simple bottom-up solutions will. As data volume grows, data becomes cheaper but also harder to interpret and can lead to information overload. Designing algorithms that can mine the data therefore becomes more important and profitable. 

To think about

At the moment no country in the world seems to be well prepared for the latter part of the digital era. Countries who recognize these new challenges and can turn them into their advantage will fare much better than those who don't adapt to these new realities. Therefore it is key to invest in digital infrastructure, adopt policies that foster small-scale businesses and digital innovations and modernize the education system with increased digital literacy and interactive ways of learning. Moreover, institutions and legal frameworks will be needed to protect the integrity of citizens. A third party organization could ensure transparency and consent in regards to data collection, and thus establish stronger trust between governments and their citizens. As data is a artificially unlimited resource increased consumption and production of data will not degrade the environment as is the case in others sectors. However, energy supply is vital so thinking about renewable ways of supplying households with energy will also be key to a sound future development. 


Out of the ashes into the fire

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