Overview of digitalization, emerging technologies, and new organizational forms on labor and value creation in society. Presentation made in Sweden during January 2018.

1. The Year 2028?
---
How the new industrial revolution
is influencing value creation in society
January 2018

2. If the rate of change on the
outside (of an organization)
exceeds the rate of
change on the inside,
the end is near....
-Jack Welch

3. Digital is the main reason
just over half the Fortune 500 companies
have disappeared since the year 2000.
-Pierre Nanterme, CEO Accenture, 2016
Yet..Digital disruption
has only just begun.

4. All our knowledge is about the past, but all
our strategic decisions are about the future
What we don’t know
we don’t know
about the future What we
know
What we know
we don’t know
Conway 2003

5. Thx to R. Wieselfors, Ericsson for photos

6. Thx to R. Wieselfors, Ericsson for photos

7. “We always overestimate the change
that will occur in the next two years
and underestimate the change that will
occur in the next ten.”
- Bill Gates, The Road Ahead, 1996

8. 2015
Smart Robots

9. H.I.S. Co. has two Henn na Hotels run
“entirely” by robots and plans to open 100 hotels.
Food
deliveriesCheck-in
Other Automated Tasks
Concierge
Porters
Cleaning
Lawnmowing
Room Service
Robot Trashcan
Robot fish

10. Assembly
Welding
Food service
Housekeeper
Bookkeeping
Telephone
operator
Programmers
Data scientists
Four types of jobs
Autor et al., 2003
Cognitive
“Brains”
Manual
“Hands”
Routine
“Well-defined rules”
Non-routine
“Rules difficult to define”

11. Decline in routine jobs, even after recovery
H. Siu (Univ of BC) & N. Jaimovich (Duke Univ), 2015
In 2000, the U.S. cash equities trading desk at Goldman
Sachs’s New York headquarters employed 600 traders,
buying and selling stock for large clients.
Today there are just 2 traders left.

12. People
• “Net generation”
• 24x7 “mobile” workforce
• Knowledge via MOOCs
• Sharing not owning
• Sustainability
• Gigs and not jobs
Technology
• Broadband/wifi
• Smart phones
• Cloud
• Internet of Things
• Data/ML/NN
• Autonomous vehicles
• Smart Robotics
• VR/AR/Holography
• 3D printing/ALM
• Blockchains
Open Source IP
• Software
• Hardware
• Physibles
Convergence of…..
Finance
• Microlending/microfinance
• Crowdfunding/equity/P2P
• Cryptocurrencies/tokens
• Blockchains
• Mobile money and payments
• M2M and R2R payments

13. http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/

14. Technology replacing Energy and Banking
Updated from http://www.visualcapitalist.com/chart-largest-companies-market-cap-15-years/
$905B $660B$730B $512B
2018
$280B

15. FIRM FOUNDED EMPLOYEES MKT CAP
BMW 1916 125,000 $60B
UBER 2009 11,000 $48B
MARRIOTT 1927 227,000 $51B
AIRBNB 2008 5,000 $31B
WALT DISNEY 1923 195,000 $167B
FACEBOOK 2004 21,000 $512B
WALMART 1962 2,300,000 $298B
ALIBABA 1999 50,000 $469B
Adapted from Parker & Van Alstyne, with Choudary, 2016, updated January 2018
Something fundamental is changing

16. Access to resources, not ownership

17. Expanding industry boundaries
“to build the future infrastructure of commerce”
“We want to help
small businesses grow
by solving their
problems.”
- Founder & CEO Jack Ma

18. Alibaba’s Ecosystem– “Doing more with less”

19. Pipeline BMs vs Platform BMs
• Seller of products and/or services
• SMACIT to make linear process
efficient
• Supply-side economies of scale
• Manager of firm with distinct
boundaries
• First mover advantage
• Ownership of resources
• Destination for solving customer
needs
• SMACIT to co-create value
• Demand-side economies of scale
(network effects)
• Leader of ecosystem with fuzzy
boundaries
• First to scale advantage
• Access to resources
PLATFORM
CONSUMERSPRODUCERS
Elements of value exchange
Adapted from Parker & Van Alstyne 2016

20. “Pipeline” business models
Parker & Van Alstyne, with Choudary, 2016
Linear

21. Platform-based business models
Network Effects
Value rises as more people
use the platform
Metcalfe’s LawParker & Van Alstyne, with Choudary, 2016

22. PLATFORM
CONSUMERSPRODUCERS
Ecosystem Leadership
Ensure central
position
within
ecosystem
Develop deep
understanding
of users on
both sides
Define value
co-creation
opportunities
Leverage
resources in
the ecosystem
Create
attractiveness
through
cultivating
trust
Leveraging network principles1. Enable
interactions across
all “boundaries”
5. Scale through
operational
excellence
4. Create agility through
control over and access
to resources, not
ownership
3. Expand industry
boundaries through
providing holistic
solutions
2. Analyze data
from multiple
sources
Teigland 2017

23. Interpersonal trust – people
Institutional trust – platform
Enabling trust between strangers
1st Rev
2nd Rev
3rd Rev
Changing nature of trust
Institutional trust - brand
4th Rev

24. TRUST: The prerequisite to the ability to scale
• Third parties attached to platform
– Fraud
– Operational
– Health, safety
• Payment systems
– Functionality
– Fraud
• Privacy of data
– Cybersecurity
– Ethical usage of personal data
Trust in
Digital
Environments

25. Exploitation
Improving existing
value creation
activities
Exploration
Developing new
value creation
activities
Adapted from March 1991

26. Community platform
Hierarchical firmVS
E.g., Ford
~ Created by employees within
organizational boundaries
E.g., Local Motors
~ Created by community collaborators
regardless of affiliation
The Flipped Firm: New model of value creation?

27. • 100xs lower capital cost
• 5xs faster production
“Local Motors is the place for people to create
influential vehicles together.”
https://launchforth.io/explore/
• 100xs lower capital cost
• 5xs faster productionhttps://launchforth.io/explore/

28. • 100xs lower capital cost
“Local Motors is the place for people to create
influential vehicles together.”

29. Olli - 3D printed autonomous vehicle
with IBM Watson
https://www.3dprintingbusiness.directory/news/local-motors-prepares-serial-production-ollie-3d-printed-smart-vehicles/
From 25-30,000 parts to 50 partsFrom 25-30,000 parts to 50 parts

30. Integrating offline and online communities
in local and mobile factories
Arizona
Maryland
Tennessee
Germany

31. Do-it-yourself (DIY) microfactory networks

32. Shifting market logics
Ericsson & Augur 2011

33. http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/

34. From factories to office parks to….

35. https://www.inc.com/glenn-leibowitz/meet-the-ceo-running-a-billion-dollar-company-with-no-offices-or-email.html

36. “Third Places” and co-working spaces

37. Sharing economy for workspace?
http://www.bbc.com/news/business-35246320

38. Gigging and Entrepreneuring
in co-living/co-working spaces
As a member of TechFarm you will have access to all houses in the network. Imagine
being a remote worker and hang out in Hong Kong for 2 months, Bali for 4 monts,
Stockholm for 6 months, and have a sense of community and home in all places.

39. Increasing forces
for local community and
circular economies

40. Walkable towns without cars
Shopping, dining, outdoor movie theater,
concerts, comedy, events, etc.

41. http://marketrealist.com/2016/01/fourth-industrial-revolution-need-know/

42. All our knowledge is about the past, but all
our strategic decisions are about the future
What we don’t know
we don’t know
about the future What we
know
What we know
we don’t know
Conway 2003

43. Jobs that did not exist in 2006
• App developer
• Social media manager
• Uber/Lyft driver
• Driverless car engineer
• Cloud computing specialist
• Big data analyst/data scientist
• Sustainability manager
• YouTube content creators
• Drone operators
• Millennial generational expert
https://www.weforum.org/agenda/2016/06/10-jobs-that-didn-t-exist-10-years-ago/

44. All jobs have been created within non-routine
Food service
Housekeeper
Programmers
Data scientist
Admin Assistant
Manufacturing

45. •Major retailers in USA closed down more than 5000
stores in 2017 and plan to close >1000 stores in 2018
•20-25% of USA malls to close within 5 years
http://clark.com/shopping-retail/major-retailers-closing-2017/US
https://www.cnbc.com/2017/12/04/retail-jobs-decline-as-amazons-robot-army-grows.html
Retail and supporting mall jobs hit hard in USA

46. Increasing demand for Data Scientists

47. The Blockchain is the glue that is going to drive a
productivity revolution across the globe on par with
what Henry Ford did with the automobile.
— Paul Brody, Americas Strategy Leader,
Technology Sector, Ernst & Young

48. Cognitive Manual
Routine
Non-routine
Predicted
Automation
Rate
64-69%
Predicted Automation Rate
<20%
Future Skills in Demand
• Creativity
• Complex problem solving
• Generating new patterns
• Coordinating others
• Negotiating
• Emotional intelligence
Predicted
Automation
Rate
81%
Predicted Automation Rate
26%
Future Skills in Demand
• Fine and gross motor skills
• Mobility
• Natural language processing
• Navigation
• Sensory perception
• Social and emotional capabilities
van der Zande et al., 2018

49. Changes in the top 10 skills

50. Primary Required Capabilities
Gross and fine motor skills
Sensory perception
Mobility to some extent
Sample Tasks
Assembling
Picking and sorting
Welding
Cooking
Predicted Substitution Rate: 81%*
Primary Required Capabilities
Fine and gross motor skills Mobility
Natural language processing Navigation
Sensory perception
Social and emotional capabilities
Sample Tasks
Plumbing and electrician
Assisting with surgery
Janitorial work
Dog walking
Predicted Substitution Rate: 26%*
Cognitive Manual
Routine
Non-routine
Primary Required Capabilities
Retrieving information
Recognizing known patterns
Optimizing and planning
Logical reasoning/problem solving
Natural language processing
Sample Tasks
Data processing, e.g., calculating, bookkeeping
Customer service, e.g., cashiers, tel operators, bank tellers
Predicted Substitution Rate: 64-69%*
Primary Required Capabilities
Creativity Complex problem solving
Generating novel patterns Coordinating others
Social and emotional capabilities
Sample Tasks
Legal writing
Negotiating
Teaching
Diagnosing diseases
Predicted Substitution Rate: <20%*
Capability mapping onto the 2x2 job matrix
van der Zande et al., 2018

51. https://www.wsj.com/articles/how-to-manage-robots-and-people-working-together-1433301051

52. What will determine success?
• Lifelong learning
• Experience (Mastery)
• Financial resources
• Networks

53. Exploitation
Improving existing
value creation
activities
Exploration
Developing new
value creation
activities
Adapted from March 1991

54. twitter

56. Khan Academy
https://www.khanacademy.org/

57. Knowledge through MOOCs
(Massively Open Online Courses)

58. The role of universities?

59. Tremendous progress

60. What progress is this?
https://sv.wikipedia.org/wiki/Handelsh%C3%B6gskolan_i_Stockholms_historia

61. Trading one job for a number of “gigs”…

62. https://www.taskrunner.se

64. Banking is essential,
but banks are not.
- Bill Gates
Industry transformation?

65. https://bitcoin.org/bitcoin.pdf
“…an electronic payment system based on cryptographic proof
instead of trust, allowing any two willing parties to transact
directly with each other without the need for a trusted third party.”

66. From the north of Sweden

67. https://www.indiegogo.com/projects/afripreneurs-and-the-leapfrog-effect#/

68. What will determine success?
• Lifelong learning
• Experience (Mastery)
• Money
• Networks

69. Why do networks matter?
Casper & Murray 2002
German
biotech
scientists

70. BA
Two individuals (organizations)
with the same number of contacts…

71. …but with very different
access to resources
BA

72. Design your social networks
1. Build relationships across diverse networks
2. Ask “What if?” and challenge basic assumptions
3. Go from “Problem Solver” -> “Solution Finder”
4. Ensure access to resources, not ownership
Boundary
spanner

73. “We always overestimate the change that will
occur in the next two years and underestimate
the change that will occur in the next ten.”
- Bill Gates, The Road Ahead, 1996
Scenario
Thinking

75. Robin Teigland
robin.teigland@hhs.se
www.robinteigland.com
www.slideshare.net/eteigland
@robin.teigland
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