Future of Digital Economy and Society

The exponential growth in digitisation and internet connectivity is creating significant new opportunities for business and society. What makes the changes so significant is the combination and leverage of multiple technologies: algorithms, sensors, data, cloud, artificial intelligence, machine learning and virtual reality working together that is new. These digital technologies can also combine with other technologies such as 3D printing, robotics, advanced materials, and energy storage, to have a multiplier effect on the way we live and work. The result is that digitisation is transforming what we do — from smart factories, to smart homes, to smart health — from the means of production to our personal well-being.

Much of the focus on the digital economy has been on the growth of digital industries relative to the rest of the economy, technology investment, internet usage, digital jobs and digital skills. Governments have been busy creating the enabling conditions for the digital economy from new computing curriculum, digital skills strategies, to new eGovernment services. These initiatives are important in that they enhance efficiency, reduce costs and encourage innovation.

Where there has been less focus is on the opportunity to realise specific societal benefits through the application of these new digital technologies. For example, cars are evolving into sophisticated, connected data platforms which allow for new features from assisted vehicles to semi autonomous and ultimately fully driverless vehicles and robo-taxis. The societal benefit is that assisted driving features will improve overall vehicle and road safety as well as reducing fuel consumption.

In the UK, the Insurance Institute for Highway Safety has estimated there is a 7% reduction in crashes for vehicles with a basic forward-collision warning system and a 14% reduction for those with automatic braking. Assisted driving has the potential for value creation, through value addition for the industry, value impact for customers, and value impact for society and the environment. Assisted driving can deliver a number of societal benefits: less people killed or injured on the roads; reduced CO2 emissions, and savings for customers who opt for usage based insurance premiums through the adoption of ADAS ‘advanced driver assistance systems’ in cars.

The full benefits of digitisation will not be realised without a sharper societal lens; digital benefits require multiple players to come together; for cars it will involve the car manufacturers, driver groups, highways agencies, insurance sector with Government playing a catalysing role.

The full benefits of digitisation will not be realised without a sharper societal lens; digital benefits require multiple players to come together

Connected cars are only the start of a wide range of potential societal benefits; there are opportunities for new mobility solutions that connect road, rail, ferry, public and private transport with walking and cycling. Multiple solutions will require platforms to work together to recognise the traveller and allow for new ways of integrating transport. The societal benefits through time saved and reduced emissions could be significant in many cities. Add to transport solutions the possibility of more efficient use of available logistics capacity, which would offer better rates, more convenience and real time tracking of goods. Logistics has low utilisation rates, particularly in trucking fleets, due to empty backhauls faced by most truckers. The EU trucking industry is very fragmented; well over 90% of the players operate a fleet of less than 20 trucks. The creation of a logistics platform to match demand with empty backhaul capacity opens the door to improved utilisation; which in turn offers the potential for less empty trucks, lower emissions and lower delivery costs.

Digital opportunities come in many forms. A Europe that has always believed in a balanced socio-economic model needs to look at digital in the same way. The digital economy is growing faster than the rest of the economy; but this growth undervalues the additional societal benefits that can be achieved through time savings, reduced emissions, and better utilisation of assets. To achieve these societal benefits will require forward looking policy makers and collaboration across sectors.

One thing we know is that digital is blurring industry boundaries and enabling new cross industry partnerships to be formed; realising societal benefits through digital begins with the identification of opportunities in sectors such as transport and energy and then requires strong cross sector collaboration to agree on the policies, incentives, standards and pilots to unlock societal value for all our citizens.

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