Why GDPR Is A Helpful Catalyst For The Postmodern CIO – Business Intelligence Info

Businessessharesomethingimportantwithlions。

Whenalioncapturesandconsumesitsprey,onlyabout10%to20%oftheprey’senergyisdirectlytransferredintothelion’smetabolism。

Therestevaporatesaway,mostlyasheatloss,accordingtoresearchdoneinthe1940sbyecologistRaymondLindeman。

Today,businessesdoonlyaboutaswellasthebigcats。

Whenyouconsidertheenergyrequiredtomanage,power,andmoveproductsandservices,lessthan20%goesdirectlyintothetypicalproductorservice—whateconomistscallaggregateefficiency(theratioofpotentialworktotheactualusefulworkthatgetsembeddedintoaproductorserviceattheexpenseoftheenergylostinmovingproductsandservicesthroughallofthestepsoftheirvaluechains)。

Aggregateefficiencyisakeyfactorindeterminingproductivity。

Aftermakingsteadygainsduringmuchofthe20thcentury,businesses’aggregateenergyefficiencypeakedinthe1980sandthenstalled。

Japan,homeoftheworld’smostenergy-efficienteconomy,hasbeenskatingalongatornear20%eversince。

TheU。

S。

economy,meanwhile,toppedoutatabout13%aggregateefficiencyinthe1990s,accordingtoresearch。

Whydoesthismatter?

JeremyRifkinsaysheknowswhy。

Rifkinisaneconomicandsocialtheorist,author,consultant,andlecturerattheWhartonSchool’sExecutiveEducationprogramwhobelievesthateconomiesexperiencemajorincreasesingrowthandproductivityonlywhenbigshiftsoccurinthreeintegratedinfrastructuresegmentsaroundthesametime:communications,energy,andtransportation。

Butit’sonlyamatteroftimebeforeinformationtechnologyblowsallthreewideopen,saysRifkin。

Heenvisionsaneweconomicinfrastructurebasedondigitalintegrationofcommunications,energy,andtransportation,ridingatopanInternetofThings(IoT)platformthatincorporatesBigData,analytics,andartificialintelligence。

Thisplatformwilldisrupttheworldeconomyandbringdramaticlevelsofefficiencyandproductivitytobusinessesthattakeadvantageofit,hesays。

SomeeconomistsconsiderRifkin’sideascontroversial。

Andhisvisionofaneweconomicplatformmaybeproblematic—atleastglobally。

Itwillrequiremassiveinvestmentsandunusuallyhighlevelsofgovernment,community,andprivatesectorcooperation,allofwhichseemtobeatdepressinglylowlevelsthesedays。

However,Rifkinhassomeinfluentialadherentstohisphilosophy。

HehasadvisedthreepresidentsoftheEuropeanCommission—RomanoProdi,JoséManuelBarroso,andthecurrentpresident,Jean-ClaudeJuncker—aswellastheEuropeanParliamentandnumerousEuropeanUnion(EU)headsofstate,includingAngelaMerkel,ontheusheringinofwhathecalls“asmart,greenThirdIndustrialRevolution。

”RifkinisalsoadvisingtheleadershipofthePeople’sRepublicofChinaonthebuildoutandscaleupofthe“InternetPlus”ThirdIndustrialRevolutioninfrastructuretousherinasustainablelow-carboneconomy。

Theinternethasalreadyshakenuponeofthethreemajoreconomicsectors:communications。

Todayittakeslittlemorethanacellphone,aninternetconnection,andsocialmediatopublishabookormusicvideoforfree—whatRifkincallszeromarginalcost。

Theresulthasbeenahollowingoutofonce-mightymediaempiresinjustover10years。

Muchofwhatremainsoftheirbusinessmodelsandrevenueshasbeenconvertedfromphysical(rememberCDsandvideostores?

)todigital。

Butwehaven’thitthetrifectayet。

Transportationandenergyhavechangedlittlesincethemiddleofthelastcentury,saysRifkin。

That’swhensuperhighwaysreachedtheirsaturationpointacrossthedevelopedworldandtheinternal-combustionenginecameclosetothelimitsofitspotentialontheroads,intheair,andatsea。

“Wehaveallthesekillernewtechnologyproducts,butthey’rebeingpluggedintothesameoldinfrastructure,andit’snotcreatingenoughnewbusinessopportunities,”hesays。

Allthatmaybeabouttoundergoabigshake-up,however。

ThedigitalizationofinformationontheIoTatnear-zeromarginalcostgeneratesBigDatathatcanbeminedwithanalyticstocreatealgorithmsandappsenablingubiquitousnetworking。

Thisdigitaltransformationisbeginningtohaveabigimpactontheenergyandtransportationsectors。

Ifthattrendcontinues,wecouldseeametamorphosisintheeconomyandsocietynotunlikepreviousindustrialrevolutionsinhistory。

Andgiventhepaceoftechnologychangetoday,theshiftcouldhappenmuchfasterthaneverbefore。

Thespeedofchangeisdictatedbytheincreaseindigitalizationofthesethreemainsectors;expensivephysicalassetsandprocessesarepartiallyreplacedbylow-costvirtualones。

Thecostefficienciesbroughtonbydigitalizationdrivedisruptioninexistingbusinessmodelstowardzeromarginalcost,aswe’vealreadyseeninentertainmentandpublishing。

AccordingtoresearchcompanyGartner,whenanindustrygetstothepointwheredigitaldrivesatleast20%ofrevenues,youreachthetippingpoint。

“Aclearpatternhasemerged,”saysPeterSondergaard,executivevicepresidentandheadofresearchandadvisoryforGartner。

“Oncedigitalrevenuesforasectorhit20%oftotalrevenue,thedigitalbloodbathbegins,”hetoldtheaudienceatGartner’sannual2017ITSymposium/ITxpo,accordingtoTheWallStreetJournal。

“Nomatterwhatindustryyouarein,20%willbethepointofnoreturn。



Communicationsisalreadythere,andenergyandtransportationareheadingdownthatpath。

Iftheyhitthemagic20%mark,theimpactwillbefeltnotjustwithinthoseindustriesbutacrossallindustries。

Afterall,whodoesn’trelyonenergyandtransportationtopowertheirvaluechains?

That’swhybusinessesneedtofactorpotentiallymassivebusinessmodeldisruptionsintotheirplansfordigitaltransformationtodayiftheywanttoremaincompetitivewithorganizationsinearlyadoptercountrieslikeChinaandGermany。

China,forexample,isalreadyhalfwaythroughanUS$88billionupgradetoitsstateelectricitygridthatwillenablerenewableenergytransmissionaroundthecountry—allmanagedandmoveddigitally,accordingtoanarticleinTheEconomistmagazine。

AnditiscompetingwiththeUnitedStatesforleadershipinself-drivingvehicles,whichwillshiftthetransportationprocessandrevenuestreamsheavilytodigital,accordingtoanarticleinWiredmagazine。

OnceChina’sandGermany’srenewablesanddriverlessinfrastructuresareinplace,theonlyadditionalcostsaremanagementandmaintenance。

Thatcouldbringbusinessesinthesecountriesdramaticcostsavingsoverthosethatstillrelyonfossilfuelsandnuclearenergytopowertheirsupplychainsandlogistics。

“Onceyoupaythefixedcostsofrenewables,themarginalcostsarenearzero,”saysRifkin。

“Thesunandwindhaven’tsentusinvoicesyet。



Inotherwords,zeromarginalcosthasbecomeazero-sumgame。

Tounderstandwhythatis,considerthemajorindustrialrevolutionsinhistory,writesRifkininhisbooks,TheZeroMarginalCostSocietyandTheThirdIndustrialRevolution。

Thefirstmajorshiftoccurredinthe19thcenturywhencheap,abundantcoalprovidedanefficientnewsourceofpower(steam)formanufacturingandenabledthecreationofavastrailwaytransportationnetwork。

Meanwhile,thetelegraphgavetheworldnear-instantcommunicationoveragloballyconnectednetwork。

Thesecondbigchangeoccurredatthebeginningofthe20thcentury,wheninexpensiveoilbegantodisplacecoalandgaverisetoamuchmoreflexiblenewtransportationnetworkofcarsandtrucks。

Telephones,radios,andtelevisionshadasimilarimpactoncommunications。

BreakingDowntheWallsBetweenSectors

Now,accordingtoRifkin,we’repoisedforthethirdbigshift。

Theeyeofthetechnologydisruptionhurricanehasmovedbeyondcommunicationsandisheadingtoward—oraspublishingandentertainmentexecutivesmightwarn,comingfor—therestoftheeconomy。

Withitsassemblageofglobalinternetandcellularnetworkconnectivityandever-smallerandmorepowerfulsensors,theIoT,alongwithBigDataanalyticsandartificialintelligence,isbreakingdowntheeconomicwallsthathaveprotectedtheenergyandtransportationsectorsforthepast50years。

Daimlerisnowamongthefirstmoversintransitioningintoadigitalizedmobilityinternet。

Thecompanyhasequippednearly400,000ofitstruckswithexternalsensors,transformingthevehiclesintomobileBigDatacenters。

Thesensorsarepickingupreal-timeBigDataonweatherconditions,trafficflows,andwarehouseavailability。

Daimlerplanstoestablishcollaborationswiththousandsofcompanies,providingthemwithBigDataandanalyticsthatcanhelpdramaticallyincreasetheiraggregateefficiencyandproductivityinshippinggoodsacrosstheirvaluechains。

TheDaimlertrucksareautonomousandcapableofestablishingplatoonsofmultipletrucksdrivingacrosshighways。

Itwon’tbelongbeforevehiclesthatnavigatethemorecomplextransportationinfrastructuresaroundtheworldbegintothinkforthemselves。

Autonomousvehicleswillbringmassiveeconomicdisruptiontotransportationandlogisticsthankstonewaggregateefficiencies。

Withoutthecostofhavingahumanatthewheel,autonomouscarscouldachieveasharedcostpermilebelowthatofownedvehiclesbyasearlyas2030,accordingtoresearchfromfinancialservicescompanyMorganStanley。

Thetransitionisgettingapushfromgovernmentspledgingtogiveuptheiraddictiontocarspoweredbycombustionengines。

GreatBritain,France,India,andNorwayareseekingtogoallelectricasearlyas2025andby2040atthelatest。

TheFinalPieceoftheTransition

Consideringthatautomobilesaccountfor47%ofpetroleumconsumptionintheUnitedStatesalone—morethantwicetheamountusedforgeneratorsandheatingforhomesandbusinesses,accordingtotheU。

S。

EnergyInformationAdministration—Rifkinarguesthattheshifttoautonomouselectricvehiclescouldprovidethemomentumneededtoupendthefinalpillaroftheeconomicplatform:energy。

Thoughenergyhasgonethroughthreemajordisruptionsoverthepast150years,fromcoaltooiltonaturalgas—eachcausingmassiveteardownsandrebuildsofinfrastructure—theunderlyingeconomicmodelhasremainedconstant:highlyconcentratedandeasilyaccessiblefossilfuelsandhighlycentralized,verticallyintegrated,andenormous(andenormouslypowerful)energyandutilitycompanies。

Now,accordingtoRifkin,the“ThirdIndustrialRevolutionInternetofThingsinfrastructure”isoncoursetodisruptallofit。

It’sneithercentralizednorverticallyintegrated;instead,it’sdistributedandnetworked。

Andthatfitsperfectlywiththecommercialevolutionoftwoenergysourcesthat,untiltheefficienciesoftheIoTcamealong,madenosenseforlarge-scaleenergyproduction:thesunandthewind。

ButtheIoTgivespowerutilitiesthemeanstoharnessthesebatchestogetherandtoaccountforvariableenergyflows。

Sensorsonsolarpanelsandwindturbines,alongwithintelligentmetersandasmartgridbasedontheinternet,manageanew,two-wayflowofenergytoandfromthegrid。

Today,fossilfuel–basedpowerplantsneedtokickinextraenergyifinsufficientenergyiscollectedfromthesunandwind。

Butindustrial-strengthbatteriesandhydrogenfuelcellsarebeginningtotaketheirplacebystoringlargereservoirsofreservepowerforrainyorwindlessdays。

Inaddition,electricvehicleswillbeabletosendsomeoftheirstoredenergytothedigitalizedenergyinternetduringpeakuse。

Demandforever-moreefficientcellphoneandvehiclebatteriesishelpingpushtheevolutionofbatteriesalong,butbatterieswillneedtogetalotbetterifrenewablesaretocompletelyreplacefossilfuelenergygeneration。

Meanwhile,silicon-basedsolarcellshavenotyetapproachedtheirlimitsofefficiency。

Theyhavetheirownversionofcomputing’sMoore’sLawcalledSwanson’sLaw。

AccordingtodatafromresearchcompanyBloombergNewEnergyFinance(BNEF),Swanson’sLawmeansthatforeachdoublingofglobalsolarpanelmanufacturingcapacity,thepricefallsby28%,from$76perwattin1977to$0。

41in2016。

(Windpowerisonasimilarplungingexponentialcostcurve,accordingtodatafromtheU。

S。

DepartmentofEnergy。

)

Thankstotheplummetingsolarprice,by2028,thecostofbuildingandoperatingnewsun-basedgenerationcapacitywilldropbelowthecostofrunningexistingfossilpowerplants,accordingtoBNEF。

“Oneofthesurprisingthingsinthisyear’sforecast,”saysSebHenbest,leadauthorofBNEF’sannuallong-termforecast,theNewEnergyOutlook,“isthatthecrossoverpointsintheeconomicsofnewandoldtechnologiesarehappeningmuchsoonerthanwethoughtlastyear…andthosewereallhappeningabitsoonerthanwethoughttheyearbefore。

There’sthissensethatit’snotsomedistantriskordistantopportunity。

Alotoftheserealitiesarerushingtowardus。



Theconclusion,hesays,isirrefutable。

“Wecanseethedataandwhenwemapthatforwardwithconservativeassumptions,thesetechnologiesjustgetcheaperthaneverythingelse。



Thesmartmoney,then—72%oftotalnewpowergenerationcapacityinvestmentworldwideby2040—willgotorenewableenergy,accordingtoBNEF。

Thefirm’sresearchalsosuggeststhatthere’smoreroominSwanson’sLawalongtheway,withsolarpricesexpectedtodropanother66%by2040。

Anotherfactorcouldpushtheeconomicshifttorenewablesevenfaster。

JustascomputerstransitionedfrombeingstrictlycorporateinfrastructuretobecomingconsumerproductswiththeinventionofthePCinthe1980s,ultimatelycausingadramaticincreaseincorporateITinvestments,energygenerationhasalsomadethetransitiontotheconsumerside。

ThankstofuturetechmediastarElonMusk,consumerscangotohisTeslaEnergycompanywebsiteandordertemperedglasssolarpanelsthatlooklikechic,designerversionsofold-fashionedroofshingles。

Modelsthatlooklikeslateoracurved,terracotta-colored,ceramic-styleglassthatwillmakeroofslooklikethoseofTuscancountryvillas,arepromisedsoon。

Consumerscanalsobuyasleek-lookingbatterycalledaPowerwalltostoreenergyfromtheroof。

Thecombinationofsolarpanels,batteries,andsmartmeterstransformshomeownersfrompassiveconsumersofenergyintoactiveproducersandtraderswhocanchoosetotakeenergyfromthegridduringoff-peakhours,whensomeutilitiesofferdiscounts,andsellenergybacktothegridduringperiodswhenpricesarehigher。

Andnewblockchainapplicationspromisetoacceleratetheshifttoanenergymarketthatislaterallyintegratedratherthanverticallyintegratedasitisnow。

Consumersliketheirnewfoundsenseofcontrol,accordingtoHenbest。

“Energy’sneverbeenaninterestingconsumerdecisionbeforeandsuddenlyitis,”hesays。

Asthepriceofsolarequipmentcontinuestodrop,homes,offices,andfactorieswillbecomelikenodesonacomputernetwork。

Andifpromisingnewsolarcelltechnologies,suchasorganicpolymers,smallmolecules,andinorganiccompounds,supplantsilicon,whichisnotnearlyasefficientwithsunlightasitiswithonesandzeroes,solarreceiverscouldbecomeembeddedintowindowsandbuildingcompounds。

Solarproductioncouldmoveofftheroofandbecomeintegratedintotheexternalfacadesofhomesandofficebuildings,makingnearlyeveryedificeintownanode。

Thebigquestion,ofcourse,ishowquicklythosenodeswillbecomelinkedtogether—if,saydoubters,theybecomelinkedatall。

AswelearnedfromMetcalfe’sLaw,thevalueofanetworkisproportionaltoitsnumberofconnectedusers。

TheWillDeterminestheWay

Rightnow,thenetworkislimited。

Windandsolaraccountforjust5%ofglobalenergyproductiontoday,accordingtoBloomberg。

But,saysRifkin,technologyexiststhatcouldenablethenetworktogrowexponentially。

Weareseeingthebeginningsofadigitalenergynetwork,whichusesacombinationoftheIoT,BigData,analytics,andartificialintelligencetomanagedistributedenergysources,suchassolarandwindpowerfromhomesandbusinesses。

Asnodesonthisnetwork,consumersandbusinessescouldtakeamoreactiveroleinenergyproduction,management,andefficiency,accordingtoRifkin。

Utilities,inturn,couldtransitionfromsimplytransmittingpowerandmaintainingpowerplantsandlinestomanagingtheflowtoandfrommanydifferentenergynodes;sellingandmaintainingsmarthomeenergymanagementproducts;andmonitoringandmaintainingsolarpanelsandwindturbines。

Byanalyzingenergyuseinthenetwork,utilitiescouldcreatealgorithmsthatautomaticallysmooththeflowofrenewables。

Consumersandbusinesses,meanwhile,wouldnothavetoworryaboutconnectingtheirwindandsolarassetstothegridandkeepingthemupandrunning;utilitiescouldtakeonthosetasksmoreefficiently。

AlreadyinGermany,twoutilitycompanies,E。

ONandRWE,haveeachsplittheirbusinessesintolegacyfossilandnuclearfuelcompaniesandnewservicescompaniesbasedondistributedgenerationfromrenewables,newtechnologies,anddigitalization。

Thereasonissimple:it’saboutsurvival。

Asfossilfuelgenerationwindsdown,theutilitiesneedanewbusinessmodeltomakeupforlostrevenue。

DuetoGermany’spopulationdensity,“theutilitiesrealizethattheywon’teverhaveaccesstoenoughlandtoscalerenewablesthemselves,”saysRifkin。

“Sotheyarestartingservicecompaniestolinktogetherallthedifferentcommunitiesthatarebuildingsolarandwindandaremanagingenergyflowsforthemandfortheircustomers,doingtheiranalytics,andmanagingtheirBigData。

That’showtheywillmakemoremoneywhilesellinglessenergyinthefuture。



Thedigitalenergyinternetisalreadystartingoutinpocketsandatdifferentlevelsofintensityaroundtheworld,dependingonacombinationofcitizensupport,utilitycompanyinvestments,governmentalpower,andeconomicincentives。

ChinaandsomecountrieswithintheEU,suchasGermanyandFrance,arethemostlikelyleadersinthetransitiontowardarenewable,energy-basedinfrastructurebecausetheyhavebeenabletoalignthegovernmentandprivatesectorsinlong-termenergyplanning。

IntheEUforexample,windhasalreadyovertakencoalasthesecondlargestformofpowercapacitybehindnaturalgas,accordingtoanarticleinTheGuardiannewspaper。

Indeed,RifkinhasbeenworkingwithChina,theEU,andgovernments,communities,andutilitiesinNorthernFrance,theNetherlands,andLuxembourgtobeginbuildingthesenewinternets。

Hauts-de-France,aregionthatborderstheEnglishChannelandBelgiumandhasoneofthehighestpovertyratesinFrance,enlistedRifkintodevelopaplantoliftitoutofitsdownwardspiralofshutteredfactoriesandabandonedcoalmines。

IncollaborationwithadiversegroupofCEOs,politicians,teachers,scientists,andothers,itdevelopedRev3,aplantoputpeopletoworkbuildingarenewableenergynetwork,accordingtoanarticleinVice。

Today,morethan1,000Rev3projectsareunderway,encompassingeverythingfromresidentialwindmillsmadefromlocallinentoafullyelectriccar–sharingsystem。

Rev3hasreceivedfinancialsupportfromtheEuropeanInvestmentBankandahandfulofprivateinvestmentfunds,andstartupshavebenefitedfromcrowdfundingmechanismssponsoredbyRev3。

Today,90%ofnewenergyintheregionisrenewableand1,500newjobshavebeencreatedinthewindenergysectoralone。

Meanwhile,thanksinparttogenerousgovernmentfinancialsupport,Germanyisalreadyproducing35%ofitsenergyfromrenewables,accordingtoanarticleinTheIndependent,andthereisnearunanimouscitizensupport(95%,accordingtoarecentgovernmentpoll)foritsexpansion。

Ifrenewableenergyistomoveforwardinotherareasoftheworldthatdon’tenjoysuchstrongeconomicandpoliticalsupport,however,itmustcomefromtheabilitytomakegreen,notactgreen。

Noteveryoneagreesthatrenewableswillproducecostsavingssufficienttocausewidespreadcostdisruptionanytimesoon。

ArecentforecastbytheU。

S。

EnergyInformationAdministrationpredictsthatin2040,oil,naturalgas,andcoalwillstillbetheplanet’smajorelectricityproducers,powering77%ofworldwideproduction,whilerenewablessuchaswind,solar,andbiofuelswillaccountforjust15%。

Skepticsalsosaythatrenewables’complexmanagementneeds,combinedwiththeneedtostorereservepower,willmakethemlesseconomicalthanfossilfuelsthroughatleast2035。

“Alladvancedeconomiesdemandfull-timeelectricity,”BenjaminSporton,chiefexecutiveofficeroftheWorldCoalAssociationtoldBloomberg。

“Windandsolarcanonlygeneratepart-time,intermittentelectricity。

Whilesomerenewabletechnologieshaveachievedsignificantcostreductionsinrecentyears,it’simportanttolookattotalsystemcosts。



Ontheotherhand,therearemanyareasoftheworldwheredistributed,decentralized,renewablepowergenerationalreadymakesmoresensethanacentralizedfossilfuel–poweredgrid。

Morethan20%ofIndiansinfarflungareasofthecountryhavenoaccesstopowertoday,accordingtoanarticleinTheGuardian。

Locallyownedandmanagedsolarandwindfarmsarethemosteconomicalwayforward。

Thesameistrueinotherdevelopingcountries,suchasAfghanistan,whereruggedterrain,war,andtribalterritorialismmakeacentralizedgridaneasytarget,andmountainousCostaRica,wherestrongwindsandrivershavepushedthecountrytonear100%renewableenergy,accordingtoTheGuardian。

TheLightandtheDarknet

EvenifallthedifferentIoT-enabledeconomicplatformsbecomefinanciallyadvantageous,thereisanotherconcernthatcoulddisruptprogressandpotentiallycausewidespreaddisasteroncethenewplatformsareupandrunning:hacking。

PoorlysecuredIoTsensorshaveallowedhackerstotakeovereverythingfromWi-FienabledBarbiedollstoJeepCherokees,accordingtoanarticleinWiredmagazine。

Humansmaybelousydrivers,butatleastwecan’tbehacked(yet)。

Andwhilethegridmaybepronetooutages,itistightlycontrolled,hasfewaccesspointsforhackers,andisphysicallyseparatedfromtheWildWestoftheinternet。

Ifourtransportationandenergynetworksjointhefray,however,everysensor,fromthoseinthesteeringsystemonvehiclestogrid-connectedtoasters,becomesasvulnerableasacreditcardnumber。

Fakenewsandelectionhackingarebadenough,butwhataboutfakedriversorfakeenergy?

Nowwe’retalkingdangerousdisruptionsandputtingmillionsofpeopleinharm’sway。

Theonlyanswer,accordingtoRifkin,isforbusinessesandgovernmentstostarttakingthehackingthreatmuchmoreseriouslythantheydotodayandtobeginpouringmoneyintoresearchandtechnologiesformakingtheinternetlessvulnerable。

Thatmeansestablishing“afullydistributed,redundant,andresilientdigitalinfrastructurelessvulnerabletothekindofdisruptionsexperiencedbySecondIndustrialRevolution–centralizedcommunicationsystemsandpowergridsthatareincreasinglysubjecttoclimatechange,disasters,cybercrime,andcyberterrorism,”hesays。

“Theabilityofneighborhoodsandcommunitiestogooffcentralizedgridsduringcrisesandre-aggregateinlocallydecentralizednetworksisthekeytoadvancingsocietalsecurityinthedigitalera,”headds。

StartLookingAhead

Untiltoday,digitaltransformationhascomemainlythroughthenetworkingandcommunicationsefficienciesmadepossiblebytheinternet。

Airbnbthrivesbecausewebcommunicationsmakeitpossibletocreatevirtualtrustmarketsthatallowpeopletofeelsafeaboutswappingtheirmostprivatespaceswithoneanother。

Butnowthesesameefficienciesarecomingtotwootherareasthathaveneverbeenconsideredcoretobusinessstrategy。

That’swhybusinessesneedtobeginmanagingenergyandtransportationaskeyelementsoftheirdigitaltransformationportfolios。

Microsoft,forexample,formedaseniorenergyteamtodevelopanenergystrategytomitigateriskfromfluctuatingenergypricesandincreasingdemandsfromcustomerstoreducecarbonemissions,accordingtoanarticleinHarvardBusinessReview。

“EnergyhasbecomeaC-suiteissue,”RobBernard,Microsoft’stopenvironmentalandsustainabilityexecutivetoldthemagazine。

“TheCFOandpresidentarenowactivelyinvolvedinourenergyroadmap。



AsDaimler’sexperienceshows,driverlessvehicleswillpushautonomoustransportationandautomatedlogisticsupthestrategicagendawithinthenextfewyears。

BostonConsultingGrouppredictsthatthedriverlessvehiclemarketwillhit$42billionby2025。

Ifthathappens,itcouldhavealateralimpactacrossmanyindustries,frominsurancetohealthcaretothemilitary。

Businessesmuststartplanningnow。

“There’salwaysaperiodwhenbusinesseshavetoliveinthenewandtheoldworldsatthesametime,”saysRifkin。

“Sobusinessesneedtobeconsideringnewbusinessmodelsandstructuresnowwhilecontinuingtooperatetheirexistingmodels。



Heworriesthatmanybusinesseswillbeleftbehindiftheircommunications,energy,andtransportationinfrastructuresdon’tevolve。

Companiesthatstillrelyonfossilfuelsforpoweringtraditionaltransportationandlogisticscouldbeatamajorcompetitivedisadvantagetothosethathavemovedtothenew,IoT-basedenergyandtransportationinfrastructures。

Germany,forexample,hassetatargetof80%renewablesforgrosspowerconsumptionby2050,accordingtoTheIndependent。

Ifthecostadvantagesofrenewablesbearout,Germanbusinesses,whicharealreadytheworld’sthird-largestexportersbehindChinaandtheUnitedStates,couldhaveamajorcompetitiveadvantage。

“Howwouldasecondindustrialrevolutionsocietyorcountrycompetewithonethathasenergyatzeromarginalcostanddriverlessvehicles?

”asksRifkin。

“Itcan’tbedone。

”D!

AbouttheAuthors

MaurizioCattaneoisDirector,DeliveryExecution,EnergyandNaturalResources,atSAP。

JoergFerchowisSeniorUtilitiesExpertandDesignThinkingCoach,DigitalTransformation,atSAP。

DanielWellersisDigitalFuturesLead,GlobalMarketing,atSAP。

ChristopherKochisEditorialDirector,SAPCenterforBusinessInsight,atSAP。

ReadmorethoughtprovokingarticlesinthelatestissueoftheDigitalistMagazine,ExecutiveQuarterly。

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