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OUT of the BLUE Iam 2/4 .NOW EDITORIAL OUT OF THE BLUE iAM 2/4 .NOW EDITORIAL The Digital Revolution is all around us. The impact of digitization on Under the overarching theme iAM, we have developed four established businesses, institutions, and start-ups is profound, and different concepts. is opening up new dimensions to deliver products and services and .me: How individualism and personalization take on new to interact with customers. dimensions with digital. However, perhaps even deeper than the industry changes are .now: How digital is changing our perception of time and our use the underlying changes that digital is having on our personal of resources and professional lives. In a positive feedback cycle, users foster the development of innovations and, at the same time, change .here: How digital is broadening the concepts of place behaviors and preferences upon using them. The expectation of and presence technology to make our lives easier and faster is growing. As digital continues changing what we do, the question arises: is digital .mind: How digital is affecting our minds and our attention changing who we are? The material is crowdsourced and linked for further reference Out of the Blue digs into these changes: new behaviors, new and reading. We are only scratching the surface and invite you to preferences, and new social mores that are emerging with such a join us on this journey. Both .here and .mind are scheduled for a strength and transformative power that we could be witnessing the January release. dawn of a new concept of the self: the i.AM. Knowing how individuals evolve in the digital revolution will be – Oliver Wyman’s Communications, Media and Technlogy practice critical for business and institution. Out of the Blue’s purpose is to contribute to this knowledge. 2 “ Are our devices turning us into a new kind of human?” – Amber Case, cyborg anthropologist, TED Radio 3 iAM Digital is an integral part of our lives. Technology is blurring the lines between the digital, physical and biological spheres while reshaping our perception of space and time and even the concept of our identity or persona. The expectation of technology to make our lives easier and faster is growing. As digital continues changing what we do, the question arises: is digital changing who we are? 4 iAM INDEX .ME How individualism and personalization take on new dimensions with digital. .NOW How digital is changing our perception of time and our use of resources .HERE How digital is broadening the concepts of place and presence .MIND How digital is affecting our minds and our attention Ogilvy & Mather China Center For Psychological Research, Shenyang Phone Wall Campaign. Used under permission 5 How digital is changing our perception of time and our .NOW use of resources Digital platforms have enabled producers to connect with consumers to deliver solutions and results faster than established organizations, responding to immediate needs, often in user friendly and intuitive ways. They have also demonstrated their effectiveness in freeing up underutilized resources in the moment of need. Successful services are built around a moment, and the context of that moment, often in a network that leverages independent contractors and partnerships. We can step in and out of experiences as we wish and as our needs evolve. In this way, digital platforms have given consumers more choices, more tools, more information, and more peer-to-peer power than ever. 6 “ We no longer have a sense of a future, of goals, of direction at all. We have a completely new relationship to time; we live in an always-on “now,” where the priorities of this moment seem to be everything.” – Douglas Rushkoff, American media theorist 7 A SHIFT IN SOCIAL CAPITAL THE PREVALENCE OF “NOW” IN DECISIONS ON HOW TO INVEST OUR TIME AND RESOURCES Our linear lives are changing. The standard path that previous generations followed of investing in a good education, landing a good job with a company HOME OWNERSHIP DOWN AND where they stayed for the majority of their career, buying a house, and saving RENTING UP up for old age is no longer valid, possible, nor always desirable. According to the English Housing Survey 2014- Materialism is losing importance in defining who we are and as a measure 2015, the past decade shows a clear trend of success. We increasingly define ourselves and others by different status towards increased renting as opposed to buying symbols such as experiences, authenticity, connection, health, ethical, for young people. In 2004-05, 24% of those and sustainable lifestyles, etc., that by definition are more ephemeral. aged 25-34 rented privately. By 2014-15 this had increased to 46%. Over the same period, In parallel, we are valuing “now” more. Secularized societies, consumerism, the proportion of 25-34 year olds buying with a and dimmer prospects of the future are opening up a new spirituality rooted mortgage decreased from 54% to 34%. in mindfulness and making the most of here and now. In the US, the number of renter households City life is also spreading: Not only are we growing more urban, but digital increased by nearly 9 million from 2005 to devices also are enabling us to bring urban experiences with us wherever 2015, the largest 10-year gain on record. Rental we go. demand has risen across all age groups, income levels, and household types, with large increases among older renters and families with children. Sources: English Housing Survey, The State of the Nation’s Housing 2016 8 The internet makes human desires more easily attainable. In other words, it offers convenience. Convenience on the internet is basically achieved by two things: speed, and cognitive ease. If you study what the really big things on the internet are, you realize they are masters at making things fast and not making people think.” – Evan Williams, Twitter co-founder ON-DEMAND DIGITAL PLATFORMS OFFER INSTANT GRATIFICATION, CONVENIENCE, AND EASE OF USE Our fast-paced connected lives and the increasing amount of economic activities centred around online platforms, where SIZING THE ON-DEMAND ECONOMY sellers can reach customers directly by responding to an Europe: In 2015, gross revenue in the EU from collaborative immediate or specific need, have resulted in the rise of a platforms and providers was estimated to be €28 billion. booming on-demand economy. The biggest five sectors were accommodations, passenger Most notable in big cities, an array of on-demand services promises transport; household services; professional and technical to make our lives easier by summoning a chauffeur, butler, chef, services, and collaborative finance. florist, bartender, or fashion consultant, as well as almost any US: In 2015, 22.4 million consumers were estimated to conceivable item via apps, often with the promise of instant spend $57.6 billion. The largest category spends were online delivery and/or gratification. marketplaces (16.3 million consumers, $36 billion annual While some on-demand companies are relying on independent spend), transportation (7.3 million consumers, $5.6 billion contractors to get high volume for one-time transactions with annual spend), food/grocery delivery (5.5 million, annual close to zero margin, others are looking into subscription models, spend $4.6 billion). optimization of delivery routes, and training and coaching of their According to Crowd Companies, the collaborative economy own staff to find viable business models and to deliver timely and has received $28 billion in funding from 2002 to date. While convenient services. investments are still happening, the rate seems to be slowing, and startups are disappearing or consolidating. Sources: Harvard Business Review, European Commission, Crowd Companies 9 REAL-TIME MATCHMAKING DIGITAL PLATFORMS ENABLE US TO LEVERAGE RESOURCES WHEN AND AS WE NEED THEM Apart from saving us time and allowing us to order nearly everything on our smartphones instantly, the on-demand or sharing economy allows for THE VALUE OF UNDERUSED RESOURCES AND optimization of underutilized assets, property, and skills. MONEY SAVING Along these lines, the true value of the likes of Uber and Airbnb is that they The potential economic gain, linked with a better fulfil our needs for mobility, personalized “boutique” lodging, and adventure use of capacities (otherwise underused) as a result without having to own and deal with the hassles of ownership of the assets of the sharing economy, amounts to €572 billion in we temporarily use. annual consumption across the EU-28, according to a recent study by the European Parliament. Likewise, online university courses offered by the likes of Coursera and edX offer us the possibility to tap into micro-targeted learning experiences without A June 2016 Eurobarometer shows that users investing in high tuition fees and dedicating our time entirely to studying. mainly appreciate that collaborative economy services are easily accessible and cheaper than traditional services, and that products or services can be exchanged, rather than paid for. A Piper Jaffray report from June 2015 found that private accommodations available through digital platforms, such as Airbnb, were generally less expensive than hotels in cities throughout the world, often undercutting hotel prices by more than 50%. Sources: European Parliament, European Commission, Piper Jaffray 10 NEW STAKEHOLDERS IN A .NOW WORLD, THE ROLES OF AN EMPLOYER, AN EMPLOYEE AND A CUSTOMER ARE BEING REDEFINED Just like technology is disrupting traditional business models, it is also creating challenges for regulators around the world. Across the US, Europe, and Asia, the kinds of Digital platforms are bringing together people who might otherwise not markets most impacted by the sharing economy be consumers with people who might otherwise not be producers. The on- are those with a history of significant top-down demand economy is creating new stakeholders in need of protection and new regulation: transportation, lodging, employment, problems that need to be remediated.
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