Digital Transformation and the 4th Industrial Revolution by Marina Alamanou




Hosting another article for the digital transformation and the 4th Industrial Revolution, by Marina Alamanou (regional partner at FasterCapital) who gave us permission to publish in our blog space.

''During my first month as a regional partner for the FasterCapital incubator, the most common question I have received from Greek founders around Europe has been the following: “Since FC is based in Dubai how can they help me while I am based in Europe”? While my answer is that “FC is a virtual incubator”, I find myself explaining to them what it means to belong to a “virtual community living in the cloud”! Essentially a community of digital associations, interconnections and new emerging associations of people and businesses all distributed globally and crossing straight through traditional geographical, cultural and political boundaries. So, enter the 4th industrial revolution, an era that is going to be characterized by a fusion of technologies blurring the lines between the physical, digital, and biological spheres.

The 1st industrial revolution gave us the steam engine, the 2nd revolution gave us the telephone and the internal combustion engine, and the 3rd revolution gave us the personal computer and the Internet. The advent of the Internet and all the digital technologies that came with it have changed the long-established communication and interaction patterns between people and businesses giving us access to “a new virtual space” for interacting within. Suddenly, with only a smartphone in our hands we have started navigating “inside the cloud” in search of business opportunities, business partners and global investors. Looking back to our ancestors, at the time of explorers and pioneers, they have navigated through the oceans for thousand of years with the help of the stars. Nowadays, our modern explorers and pioneers i.e. start-uppers, founders, inventors, investors and entrepreneurs are navigating in a “digital ocean” in the cloud - where gravity and traditional geography have ceased to exist - with the help of a smartphone. In an analogy with the past, FasterCapital is like the vessel our ancestors have used to navigate around our oceans for reaching and discovering new and unknown destinations.

This 4th Industrial Revolution - marked by emerging technologies like robotics, artificial intelligence (AI), blockchain, nanotechnology, quantum computing, biotechnology, The Internet of Things, 3D printing and autonomous vehicles - will reach its first peak in 2025 when the entire population of Earth will have access to the Internet. Right now, half the Earth's population has access to the Internet while daily 270 billion emails are sent, 500 million Tweets are typed, 1.37 billion users are logged into Facebook, and 3.5 billion Google searches are made. More information about real time statistics can be found on Internet Live Stats (1).

In seven years from now 8 billion people with a smartphone (the tool “trademark” of this era) and a good Internet connection will be all virtually connected in real time. The way we eat, exchange products, learn, interact, do politics, do business, make drugs, have fun, choose our clothing, fell in love and even worship our gods is going to change radically, since our smartphone/tablet will digitally transport us in a new “space” where the limitations of our physical world have stopped to exist. We are going to need new platforms for e-commerce, fleet management, e-learning, data mining, business intelligence and other service sectors just immediately. We will need blockchain to protect our transactions, e-waste to properly manage our emerging environmental hazards (electronic and electrical waste), big data to make us understand better the complexity of all and more clean energy to support the Internet and the cloud.

According to an article published in the Financial Times on June 2018 (2), two-thirds of the 1,155 global manufacturing companies surveyed by PwC, “have just started or have not yet embarked on their digital transformation”. Europe, in particular, is lagging behind: just 5% of manufacturers in Europe, the Middle East and Africa (Emea) are “digital champions,” versus 11% in the Americas and 19% in Asia-Pacific. On the other hand, Europe has strong foundations in fields such as AI and cryptography. In the following nine European countries Belgium, Denmark, Estonia, Finland, Ireland, Luxembourg, Netherlands, Norway and Sweden 25% of the companies have digitalised their systems and 20% of businesses are using AI at scale.

According to the European Digital Index for 2016 London, Stockholm and Amsterdam are the best cities across Europe to support digital entrepreneurs while London, Stockholm and Paris are the best cities to scale up businesses. The index (3) provides also information about the strengths and weaknesses of the local ecosystems. According to Von Perger (4), who is part of the investment team at pan-European VC firm Wellington Partners, it is easier for a founder in Europe to prove that their product works, but if they want to scale their business they need to go to the USA. The reason the USA works so well for European companies looking to scale is its homogeneous market (one language, one strategy, one operation, one advertising approach).

Putting it differently, USA is a 320 million persons single market and Europe is a complex beast of many nations. So in the end, yes virtual incubators like FC will definitely be going to help European entrepreneurs overcome geographical and cultural barriers during their digital transformation. And yes, Europe is a complex beast of many nations, but at the core of the European complexity lies the base of a system made of regularly interacting or interdependent groups forming an integrated whole. And such European system hasn’t found yet what is looking for, the right digital platform!''       

1) http://www.internetlivestats.com

2) https://www.ft.com/content/9b5c24fa-5df6-11e8-ab47-8fd33f423c09

3) https://digitalcityindex.eu

4) https://www.forbes.com/sites/jasonhesse/2014/09/12/why-you-need-to-start-up-in-europe-but-scale-in-the-us/#645ee39cd1d0

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