Is That Digital Transformation I See Before Me?

Digital transformations have hit the skids, falling prey to poor leadership, disconnects between IT and the business, lagging employee engagement, substandard operations — just about every area required for success. That’s the conclusion of a July 2018 report from Capgemini Digital Transformation Institute and MIT Sloan School of Management, which surveyed more than 1,300 executives in over 750 global organizations. https://www.cio.com/article/3274447/digital-transformation/why-digital-transformations-are-lagging.html

Digital transformation is the profound transformation of business and organizational activities, processes, competencies and models to fully leverage the changes and opportunities of a mix of digital technologies and their accelerating impact across society in a strategic and prioritized way. It is the integration of digital technologies into everyday life.

During my recent visit to Belarus, I was amazed to see the capital city Minsk, and the EU border city Brest, which I also visited, an energetic mirror of how Berlin and Moscow were in the 1990s. Trendy coffee bars (which indeed do not suffer but benefit from the absence of Starbucks), POS holograms in supermarkets, taxi apps, mobile phone shops in abundance, international brands and businesses, flat LED traffic lights, dynamic local brands and businesses all mixing to create a vibrant digital business and tech culture. I could charge my phone for free and enjoy a coffee watching my child play in the Mall kids area AND, I could pay with the VISA swipe app on my phone most any place. This was a much different Belarus than when I first visited in 2007. In fact it is much different from what I experience in Germany even today. What I found most noticeable is that I was not able to detect the same energy and obvious everyday digital transformation in trips to other cities in which I visited after an extended absence.

More than 30,000 tech specialists now work in Minsk, a city of about two million, many of them creating mobile apps, software, and games (Wargaming.net was founded in Minsk in 2008 and is number 8 of the top ten money making games in the world). Back in 2005, Belarus began implementing laws to boost its tech sector. Recently these laws also included Visas, Digital Contracts, and Cryptocurrencies. Resident companies of the High Tech Park Belarus are exempt from all corporate taxes, including VAT and profit tax, as well as customs duties.

Obviously not all that sparkles is gold in the New Digital Economy. The old woman who asked me for money spent her life working for The State and now has a miserly pension. She must watch as the last Soviet Dictatorship of Europe flirts openly with Capitalism, to see the growing number of Mercedes on the streets and the young tech crowd, who never knew privation, drinking matcha smoothies at The Hilton. Where is the fairness in that? With 21% of Germans living along or below the poverty line, and Jeff Bezos fortune currently at 131 billion dollars, we can ask ourselves where is the fairness living in any industrialised country today?

“Master Builders spend years trying to empty their minds to get even a fleeting glimpse of the man upstairs, and yet your mind is so prodigiously empty; there is nothing to remove in the first place.” Lego Movie 2014. I am reminded of this quote because I find it analogous with the ease in which Belarus has been able to (in many respects) quickly develop a digital friendly society without the growing pains that other countries are having.

The new Digital Society is developing faster than current infrastructures (government, education, business etc) can adapt or respond. Transformation is more than the gentrification of a pickle factory and flex time for working fathers – it means a completely new mindset. Germany and Japan were able to develop intro industrial and economic powerhouses after the second world war because there was very little infrastructure remaining to be adapted. Silicon valley? It was from the start a tech hub. With mostly orange tree groves, there was nothing to replace there, and Stanford from its inception encouraged the development of local businesses in electronics. Frederick Terman created an industrial park on 660 acres of Stanford’s land where the land was leased to electronics and other high technology companies on long-term leases. Hewlett-Parkard and Varian Brothers were among the first tenants. This provided income to Stanford and created an agglomeration in high tech industry.

We need more orange tree groves. Is Syria, after it’s devasting war, a possible place to start? A Free Trade Zone, digital infrastructure, international investment without a flag?

Populism and social fragmentation are just some of the many manifestations of the growing pains we are experiencing as technological change moves faster than most of us can accept or understand. Two hundred years ago the Industrial and 2nd Agrarian revolutions brought about the same upheavals as the introduction of machines moved people from the fields to the cities and factories. In a world with increasing numbers of elderly, and lower income populations, this transformation will be extremely difficult for countries whose structures are grounded in the affluent post war years.

Successful transformation will require more than another co-working space and set of trending hashtags. The CEO of Bosch, at the annual general meeting, appeared on stage wearing a blue tshirt. People cheered this as a positive sign of cultural and digital transformation. We have been down the road of dotcom CEOs in shorts and tshirts before. If what the boss wears is a guide of how far along the road of digital transformation a company is then we really still have not grasped what it’s all about and what is going to happen.

https://www.nytimes.com/2017/10/05/world/europe/belarus-minsk-technology.html
https://globalriskinsights.com/2018/01/belarus-tech-law-revolution
http://www.campdenfb.com/article/belarus-new-capital-cryptocurrency
https://www.forbes.com/sites/forbestechcouncil/2018/01/04/disruptive-technologies-and-new-economic-models