Inclusivity as a Competitive Advantage

Inclusivity as a Competitive Advantage and the Internet of Things – “The Electrification of 21st Century”

There is a tremendous opportunity for fostering inclusive development through the Internet of Things. But there are also potential downsides. The Industrial Revolution created unprecedented gaps among nations and their levels of development. The world is witnessing the democratizing impacts of the advent of the Information Age. But how can the drivers of the Information Age be leveraged to ensure inclusivity as opposed to widening the socioeconomic gaps among peoples, as occurred during the Industrial Revolution?

i4j = Innovation for Jobs

I am writing from the Innovation for Jobs, “i4j,” conference in Lund, Sweden. The discussion focuses on transitioning the economy of the Oresund region in southern Sweden and Eastern Denmark. The region boasts one of the highest concentration of highly educated people and a robust ecosystem characterized by healthy collaborations among industry, government and academia. The conference examines both a fundamental question and a very pragmatic one.

First, it asks the question of whether innovation by its fundamental nature destroys jobs. The basic idea is that innovation is the variable that enables productivity increases, such that greater outputs are achieved without increasing inputs. Since labor is an input, it stands to reason that innovation can be a job destroyer.

The conference posed the question of how human capital – the world’s most underutilized resource – can be better leveraged through a new innovation paradigm to reinvent the meaning of work through personalized jobs.

Second, A theme of the i4j summit was opportunities for job creation around the Internet of Things

Internet of Things and the 6th Kondratiev Wave

The Internet of Things has been called the “Electrification for the 21st Century,” referring to its broad, game-changing implications for the economies around the globe. The Internet of Things is part of the Information Age, the 6th “Intelligent Technologies” Kondratiev wave. As a quick refresher, electrification comes after the steam engine, steel and railways of the 19th Century as major technological breakthroughs of the Industrial Revolution. The internal combustion engine, petroleum and modern chemistry fueled the next wave. Semiconductors, computing and telecommunications drives the Information Age and forms the foundation of Kondratiev’s Intelligent Technologies wave. The Internet of Things is core manifestation of this.

The Internet of Things encompasses the idea that there are 10.5 billion connected devices today, but by 2020 the number of connected devices is anticipated to expand to 50 billion. The types of connected things is expanding from laptops and smart phones, to smart transportation and healthcare delivery, diagnostics and monitoring systems, household appliances, apparel, etc.

Inclusive Development through Innovation Partnerships

One of the major barriers to adoption of applications of the Internet of Things is culture of entrenched businesses like municipal infrastructures and healthcare providers. The experts are concerned about privacy and security – and rightly so. The early-adopters could well be closer to the bottom of the pyramid. Recall that mobile banking first took off in Africa because there was a huge un- and under-banked population. Service providers addressed privacy and security issues to fill that market niche. Markets that have the most to benefit, and the least to lose are where there is little or no installed base: the ‘pain’ is more acute because there is no viable alternative, so they are ripe for adoption of cutting-edge IoT technologies, while markets where there are acceptable solutions are more resistant to change because the risk-reward proposition favor the risk averse.

For example, a developer of smart-city technologies, might be well advised to look at some of the major African capitals like Nairobi which doubles in population every decade, rather than focus on retrofitting existing cities, where there is significant resistance to adopting cutting edge technologies. This could foster greater inclusivity on a global scale through new forms of public-private partnerships with stakeholders at the grass-roots. Africa and the Middle East could be the new hot bed of innovation in smart cities technologies, precisely because they are the test beds, building new cities.* The key to success is the willingness and ability of IoT enabling technology purveyors to engage in collaborative forms of partnership, building transitioning economies’ capacity to innovate.

It has been stated that virtually everything has to be reinvented at this phase of the Information Age. Perhaps the most important thing that needs to be reinvented is the nature of innovation-driven partnerships, to ensure inclusiveness.

*like Saudi Arabia in water desalination and China in clean coal-fired power-plants, as I discussed in my blog post, “Innovation by, from and for the Developing World.” https://mariaadouglass.com/2014/02/25/innovation-from-by-and-for-the-developing-world/