THE NETWORK: THE NEW INFRASTRUCTURE OF OUR FUTURE PROSPERITY By: Karl-Heinz Land Author, Speaker, and Investor neuland GmbH & Co.KG he digital matrix permeates all areas In many regions of the world, a new Tof modern life. Digital transformation digital infrastructure is emerging. This is not only growing at a fast speed but data and communication system is a also permanently increasing acceleration. global, finely woven fabric that will be Although the media, business, and politics much larger, more powerful, and more talk and write in "4.0 mode" (commerce useful than anything we are familiar with 4.0, industry 4.0, education 4.0), we have from the first 20 years of the internet. already reached the "Fifth Industrial In this "world machine," everything can Revolution," with the Internet of Things communicate with everything. It will fuse (IoT), blockchain, and artificial intelligence the capabilities of man and technology, emerging as critical technologies. In generate information of unprecedented this environment of rapid growth, value, and manage even the most cloud and big data have become the complex global processes. It will optimize most important business enablers. itself, break down boundaries between industries, and enable solutions that are The "Fifth Industrial Revolution" is only a distant concept today. In the past, characterized by cyber-physical systems cities, and companies used to settle near and IoT. These technologies not only rivers, railway stations, and motorways enable automated and AI-controlled to gain rapid access to the infrastructure processes, routines, and services but will and accelerate the value chain. Today, ultimately abolish the interface between access to high internet bandwidth and the artificial and the biological sphere. data determine the new infrastructure. Without these barriers, the collaboration Anyone who is not connected to this between man and machine becomes infrastructure can no longer participate possible. We are no longer talking in the new way of creating value. about automation but autonomous systems. These systems can operate independently without human interaction. Whitepaper | The Network: The New Infrastructure of our Future Prosperity 2 DIGITAL DARWINISM IS TAKING HOLD: "ADAPT OR DIE" The network is the new infrastructure of our future prosperity. echnological progress and changing operator but are bundled for the customer Tparadigms have been common in the and combined with other data-driven value. past. Remarkably, the first three stages Above all, the customer gains transparency of industrialization and the associated and access to additional, more convenient increase in productivity lasted for another services. Platform partners or product 250 years or so, while the last two manufacturers gain a wider reach and revolutionary stages were climbed within benefit from lower infrastructure costs 20 years. There are currently more than such as logistics, distribution, and provision 30 billion networked devices. These will of the offer. For this reason, the decisive generate more than 11.1 trillion euros factor for product provider success is fast, in new economic value added by 2025. uncomplicated access to the platform. Many of these activities will be driven by This results in an extensive partner start-ups that have emerged from the network, which the platform operator internet economy. In addition, they will has to map in a technically clean way. come from the service sector and no longer be product-driven. In the same Subscription, commission, or advertising way that we continue to build cars and revenues are popular business models machines today, we will have to think in the platform economy. This leads to about software and services in the future. economies of scale, allowing the platform provider to grow rapidly without making Anyone who wants to participate in further significant investments. The digital value creation should understand greatest profit that can be achieved the paradigm shift in the digital through the platform economy is by economy. The three main drivers of this offering a superior interface to the end development are disintermediation, customer. Detailed information about a disaggregation, and dematerialization. customer's specific purchase and operating behavior gives the platform provider a Disintermediation describes the elimination competitive advantage. The data and of the middleman, also known as the information coming from direct customer platform economy. A platform uses the contact are the new currency of the digital network and becomes more valuable with economy. Therefore, even a marketplace each additional user. The added value, like Amazon is fighting for the last mile to therefore, increases with every user who the customer and changing from a pure joins it. The core of the platform business is online marketplace to a multi-channel that the products and services offered are provider with increasingly stationary not exclusively provided by the platform shops. Online and offline offers are Whitepaper | The Network: The New Infrastructure of our Future Prosperity 3 cleverly interlinked and made measurable are the machines that make the printer. to offer the customer the best possible Also, the individual parts from which the added value on all channels. Other classic printer is produced are dematerialized. examples of platforms include Uber, They are simply no longer needed. The Netflix, Google, YouTube, Airbnb, Facebook, value chain is changing significantly. and the Apple Appstore. They all offer their Anyone who believes that products like customers data-based services. They create a car cannot be dematerialized because transparency about distributed offers and the driver will always be physically seated are also able to adapt and individualize in the vehicle is mistaken. Through the the offer to the customer. In this way, they interaction of the three factors presented generate additional data and information, - platform economy, service economy, improve the offer for the customer, and and dematerialization - it is possible to benefit from an immense competitive maximize the utilization of a vehicle. advantage over individual suppliers. Car sharing makes it possible for many households to use just one car together Disaggregation describes the breakdown and only when needed. Twenty cars of existing data into individual elements or become just one. Nineteen cars are specific characteristics. This is the basis for dematerialized. This triad of paradigm the sharing economy and various digital shifts must be understood and used to service models such as the "pay-per-use continue to participate in value creation principle." Car sharing is a clear example in the future. After all, they do not stop of this. In the past, a car manufacturer at any industry, including the automotive knew, at best, when and how many cars industry, trade, banks, media, tourism, were bought by which customer. Today, or mechanical and plant engineering. In manufacturers know a lot more about the age of COVID-19, we are even forced the customer, like the exact time he to dematerialize physical meetings and opened the car door, where he went, how events. The event and catering industry fast he was going, how many kilometers is facing unprecedented challenges he covered, which radio station he and is currently reinventing itself. listened to, and where he locked the car. Disaggregation opens the doors to entirely COVID-19 has turbo-boosted digitization, new, digital business and service models. and yet change will never be as slow as it is today. Each of us can feel how the Dematerialization describes the conversion world seems to be spinning faster and of analog products into digital formats. faster. The lockdown resulting from the Material things become software. If we COVID-19 pandemic showed how quickly only have our train ticket as a QR code on we need to adapt, govern for change, our mobile phone, neither the paper nor adjust our economy, change our social the toner is needed to produce the ticket. and individual behavior in response to The printer is no longer necessary, nor new conditions in record time. In 1965, Whitepaper | The Network: The New Infrastructure of our Future Prosperity 4 Gordon Earle Moore, computer scientist I get? On the 64th field, I have so many and co-founder of the computer chip grains of rice that I could cover the entire company Intel, formulated a law known area of the Federal Republic of Germany as "Moore's Law". It states that every one 2,065 meters high with rice. Only the or two years, the density of transistors on Zugspitze mountain would still rise! a computer chip doubles. The computing power of the computer, therefore, doubles The result of exponential development is every two years. Mathematicians will difficult for us to imagine, and the same immediately realize that this is nothing applies to technological progress. The more than an exponential function. It is an capacity of the room-sized computer exponential development of technological with which the Apollo 13 mission flew to progress which, together with the the moon is less than that of the average effects of digitization, will regularly turn smartphone today. Today, we are just our world completely upside down. on the 37th square of the chessboard, and the fun has just started. We can only Most people know the story of rice grains guess at the possibilities and opportunities on the chessboard and how the Brahmin offered by technological development. Sissa