Digital Darwinism

by Tom Goodwin

  It’s more helpful to assume that everything will change rather than to underestimate it

  After the banking crash in 2006, governments around the world pumped over $12 trillion into the economy and quickly. They did so because they felt it was better to do too much and too soon, than too little too late. Similarly, when it comes to business planning and transformation, it’s better to apply more imagination to the future, to look further ahead, to overestimate the changes in the world, than it is to presume things won’t alter.

  I’m sure it’s clear by now that the missteps we took with the electrical age provide the perfect lens through which to view our mistakes with the transformation to digital. Every aspect and lesson learned has a parallel in the modern world. How we only applied the new technology to the edges, not the core. How accounting processes diminished its value, and factory owners refused to invest enough, assuming they could ride it out. How, in domestic applications, people could not really see the benefit, and how companies created closed systems out of protectionism. We see that what really changes isn’t the technology itself but the systems, appliances, ways of working that are built on top of this new world. Profound technology creates existential change. It rewires everything. It’s wiser to assume that everything will change rather than to underestimate it. The next chapter will explore how new technology arrives, what it looks like and what to do about it.

  So, as we seek to establish how best to apply new technology, it’s clear we must understand not just the technology itself, but its meaning. We need to look at the ways technology has effected change before.

  References

  Amara, R (2006) available at: http://www.oxfordreference.com/view/10.1093/acref/9780191826719.001.0001/q-oro-ed4-00018679

  Clark, J A (1920) cited in The 1920s (1920–1929), EC&M, 01/06, available from: http://www.ecmweb.com/content/1920s-1920-1929 [last accessed 7 December 2017]

  Culkin, J M (1967) A schoolman’s guide to Marshall McLuhan, Saturday Review, pp51–70

  Schurr, S H, Burwell, C C, Devine, W D and Sonenblum, S (1990) Electricity in the American Economy: Agent of technological progress, Praeger, New York City

  Schwartz, E (2012) We’re using way more paper than we have before, Gizmodo, 3 April, available from: https://gizmodo.com/5898830/were-using-way-more-paper-than-we-ever-have-before [last accessed 7 December 2017]

  The Victorian Emporium (2011) History of Lighting, 30 May, available from: https://www.thevictorianemporium.com/publications/history/article/history_of_lighting [last accessed 7 December 2017]

  03

  The three eras of technology

  We’ve seen how last century the world collectively got the meaning of electricity wrong. Taking a look at this century allows us to learn even more lessons from other and more recent examples. It is by studying how technology is adopted, how companies and society respond and when, how and where change should be applied, that we can best harness the potential of technology and establish when and how to do so.

  In this chapter we will investigate the adoption process and the notion of three eras: the three distinct stages in the adoption of any technology. I hope that by understanding the concepts we can become more confident in how, when and where to apply change. In this chapter I will be establishing patterns that we can use to make sense of change, to become more confident and to paint a more optimistic vision that we can embrace.

  For all the progress made in the digital age – our lives embellished by smartphones, TV shows beamed on demand, online retailers, all the services we can now access directly by ourselves – and for all the robot-centred auto-plants and the levering of new management techniques that best utilize these new forces, it’s not immediately obvious that productivity has been drastically changed by the ‘digital revolution’. Of course, productivity per worker goes up per year, but there is no drastic change of gradient, as is illustrated in Figure 3.1. How can this be?

  Figure 3.1 US productivity per worker in real GDP: quarterly from Q1 1947 to Q2 2016

  SOURCE An Economic Sense, https://aneconomicsense.files.wordpress.com/2016/07/gdp-per-worker-1947q1-to-2016q2rev.png

  The three phases

  The lack of change in productivity has been seen before. As we’ve learned from the introduction and use of electricity in the Industrial Revolution, there are three phases to the uptake of technology:

  First, we have a pre-technology environment, before the new technology is discovered or used in any way. In this period things generally are understood, the pace of change is slow and improvements are incremental.

  Then a new technology or way of thinking with the potential to change everything is installed or disseminated. This happens around existing mindsets and processes, augmenting and lubricating what went before. At this stage we have both the new and the old, with competing systems, inherited protocols, the feeling of change and panic, and where we often live with the most confusion and uncertainty.

  And then we have a third phase where we make sense of the new technology, where systems are rebuilt for the new world. It is in this final stage, when society and the commercial world appear to have made sense of the change, that the technology moves to the background and is widely understood and built upon. It’s this final stage where things appear simply to work.

  Often things appear to get more complex before they get simple. Nearly everyone likely to read this book in 2018 will have electrical power at their fingertips and around them. Power is abundant, reliable, relatively cheap and simple. Apart from strange plugs around the world (increasingly standardized as USB plugs), it seems to be uniform and straightforward. As a result, we don’t think about power because it works.

  We once noticed computers a lot. We had Macs that didn’t work with PCs. We had prompts to load computer programs, machines would run out of storage, they’d crash all the time. At university, computers were all kept in a special room. Computers were new, scarce, exciting, you’d most likely have to wait to get on one. I remember the first machine at school with a hard drive. I didn’t get how it could just have all the programs in it already; it was magical.

  For many years we’d notice how many of our possessions had a power supply, we’d note the things that had ‘computers inside’, but now we don’t. We used to turn TVs on and off, and shut down PCs. Everything had a prominent on/off switch. Today we rarely bother. It’s even hard to define what is and what isn’t a computer. A tablet is a computer, but is Amazon Echo? Is a Google Wi-Fi router a computer? Is a Sonos speaker? My TV may or may not have a processor: it’s not important to me. Everything is just increasingly smart.

  When you think about a technology, when you notice it, it’s a sign it’s not yet working perfectly. It’s rather paradoxical that what you notice least is often what works best. The fact you get angry when your phone isn’t rendering movies immediately is a testament to your expectations that it should always be perfect. It’s with this thought that we can see we are post-electricity and post-computerization, but now we are in the midst of the most complicated part of the digital age.

  The pre-electricity age

  For millennia, we lived in the pre-electricity age. Either we had no power and no factories or, as we started constructing them in the early Industrial Revolution, factories relied on water or steam for power. The location and design of these factories and the manufacturing processes used within them all evolved over time. Progress was relatively straightforward, change was slow, and increasingly focused. Lubrication technology may have made line drives a little more efficient, new materials made pulleys better, gear boxes gave more control over speed, steam plants got more powerful, but all the changes were designed to optimize existing equipment and processes within a pretty fixed environment.

  The domestic environment was also one of relatively limited change. Houses at the time were focused on better provision of running water and reducing the risk of disease through improved sanitation. It was an era of incremental improvements in he
ating technology, from open fires to wooden stoves. Another focus was on how to reduce the risk of fire or how better to respond to fire risk. Before the vast changes that would occur as electricity spread through the world, life was simple: there were no compatibility issues between windmills and waterwheels, there was no chaos as people switched from horses to oxen to draw their ploughs. No management consultants would swoop in to tell roof thatchers about Six Sigma hay. In short, in retrospect it was a time of slow change, agreement on how to optimize towards a better solution, regardless of how it may have felt at the time.

  The mid-electricity age

  The discovery of electricity and the ability to harness its power, both in its generation and transmission, and the ability to use it, had enormous effects in virtually every direction. It was a time of great change, complexity, chaos and vast disagreements.

  For a long middle stage, people lived in a hybrid age: a pre-electricity world which was being adapted at the edge, and with minimal effort, for the electrical age. Throughout this period, we had pre-electrical thinking and constructs running in parallel at the same time with electrically-altered businesses and processes.

  In business and factories, there was a spectrum of companies operating with electricity being used in vastly different ways. Some businesses changed nothing, stubbornly refusing to see any benefit. Others made tiny changes, alterations at the periphery of what was done before. Yet others made larger changes, embracing the potential of what was possible, but – rather like electric group drive – did so with limited imagination and investment. And we had the beginnings of pure-play ‘electrical’ companies: businesses built for the modern age, founded conceptually and operationally on the new source of power.

  During this period there was mass confusion, little agreement and many choices. There was no best practice, but unproven mathematics and new theories abounded. The confusion led to the creation of consultants. The first recognized management consulting firm was formed in 1890 by Arthur D Little, initially specializing in technical research, later building a specialism in what became known as ‘management engineering’, then evolving into management consultants as we know them today. Companies employed specialist and well-paid staff to assess the potential impact of electricity and then to drive business transformation with it.

  It was a time of great uncertainty and non-standardization, requiring new regulations, agreements and protocols in order to best harness the potential of power.

  In the UK, The Electricity Supply Act of 1926 led to the setting up of the National Grid to standardize the nation’s electricity supply and established the first synchronized AC grid. Yet for a long time, because it was new, confusing and misunderstood, electricity wasn’t deemed particularly important. A bit like the internet today, which is still largely regarded as a nice thing to have and not a human right, it wasn’t until 1934 that the Public Utility Holding Company Act recognized electricity utilities as public goods of importance along with gas, water, and telephone companies, outlining restrictions and providing regulatory oversight of their operations.

  As discussed in Chapter 2, in homes, schools, universities, healthcare and many other areas, electricity led to a proliferation of new appliances, new ways to live life, new ways to think about the world and women entering the workforce. It was a time of great debate about the changing nature of society, of gender role models, a time of big philosophical questions about the nature of humanity, of resistance to change and desire to resort to simpler times. There were fears of mass job losses and protesting workers, and the birth of the Arts and Crafts movement as a rebellion against the sweeping standardization and loss of artisanal practices. There were whole periods where the new technology felt disruptive beyond any good it could ever bring. There were massive increases in wealth for those who took advantage, huge changes to social fabric and the value and meaning of work – and two world wars!

  It was while this new technology was being unequally adopted and unfairly distributed geographically, demographically and culturally, that we talked most about the implications of these changes. And it happened over a long period of time, as electricity spread around the world, and moved to developing nations, to different sectors and different use cases. Figure 3.2 shows the n-gram trend lines of references to electrification in books in the English language corpus. It is obvious that it became a big topic of conversation from 1870 onwards, before taking over 100 years to become something we didn’t notice, think about, discuss or work around.

  Figure 3.2 Frequency of the term ‘electrification’ in the English language corpus, 1800–2000

  SOURCE Google Books

  The post-electricity age

  Postmodernism in architecture was a movement started by a generation of designers who had grown up with modernist architecture. They were so close and comfortable with it, it was so ingrained and natural to them, that they didn’t need to play by its rules. They didn’t need to signal to others that they understood it; it was just known that they got it. This confidence and innate understanding of modernism allowed them to playfully, confidently and knowingly design a world that could move past it. So, when I use the term ‘post’ in this chapter I’m talking about the same idea: a group of people or a society having the confidence and the maturity to accept the idea of moving forward, creating new things in the world, and then collectively looking back on our progress.

  Electricity had the same watershed moment as architecture. Many years after the arrival of electricity we got to a place where electricity wasn’t a thing. It wasn’t there to be designed for. It wasn’t simply ‘not new’ – it was a given. There was no celebration of it. Like oxygen it was just the natural order of life. There was no one set moment, no stories in the press, no anniversary we now celebrate; we got to the point where it became notable by its absence.

  A technology is truly here when it fits into the background. We usually think that those growing up with a technology, who embrace it naturally and understand it innately, are ‘natives’. But the people of today are not ‘electricity natives’: we are beyond that. The world today just makes sense in the era of electricity. We don’t see companies struggling to adapt, we don’t talk of ‘heads of electricity’ as we talk about ‘heads of finance’, we don’t define companies on the stock market as being electricity-centric. There are no topics of contention, no new standards being launched, no legal cases rooted in the awkwardness of what this new power means. Things are very simple now. There is no duplicity, we don’t own both electricity- and steam-driven appliances. We’ve made it. We now live firmly in the post-electricity age.

  The three-era thinking has been borne out by other technologies. Another good example of this same pattern is computerization, which happened between the early 1970s and the late 2000s.

  The pre-computer age

  Before the mainframe and then personal computers, life across business, education, home and transportation was largely settled in the post-electricity age. Progress again was generally simple, convergent, and without controversy. Management consultants worked with factories to increase efficiencies, new theories like Just-in-Time manufacturing and Six Sigma were introduced and then perfected. When you look back at this time, it seems amazing. People on trains taking briefcases to work, the use of Xerography machines not printers, people around the world making phone calls (and from desks!), calendars on paper. In this era, offices were aligned like command and control systems replicated from the armed forces with a strict organizational hierarchy, an essential structure when communication takes time and costs money.

  Business in this age consisted of forms to fill in, stamping stamps and internal mail protocols. Progress was slow and improvements limited: slightly faster photocopiers, cheaper ink, better workflows, cheaper and more advanced calculators developed at snail’s pace. Desks were lined with intrays and outboxes. There we no blue screens of death, no ‘systems down for maintenance’ at weekends, no server issues or hacking scandals.
No computer rooms, no IT support function. I’m certainly not suggesting life was better, but everything worked smoothly and slowly. Life was simple and effective, and about to undergo a huge shift.

  The mid-computer age

  The advent of computers didn’t change business overnight. As with electricity, it took a while, was ignored by many businesses, and adopted with different speeds, enthusiasm and depth by different companies, sectors and nations. It was perhaps partly because of this asymmetry that things felt very complex.

  For this age, new skills were required, new equipment needed to be purchased and new systems created. We first used them to embellish the existing structures and systems. We bolted on a new IT department, reluctantly and entirely as a support function. In the beginning we needed computers to fit around us, but then we needed to change around them.

  What changed was largely an addition to rather than a replacement for what we had in the past. Initially, we still held briefcases and kept paper calendars. We printed out e-mails, and we kept internal mail. Over time people talked about workflow management in new ways. Mail became electronic, we invited people to meetings with digital calendars (which some people have still not adopted!), we used intranets, and laptops allowed people to work from home and stay connected. Then things again got overwhelmingly complex. We had mixed protocols with Mac vs PC, and different types of printer (remember daisywheel printers?!). The systems of the old were supplanted by the new, not rethought. It was painful. In fact, the only thing harder than changing technology is changing the way that people use it. IT departments to this day have an expression PICNIC, which stands for Problem In Chair, Not In Computer to convey the degree to which it is the people who are lagging behind.