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How Digital Transformation is Changing Our WorldJust like the industrial revolution, the digital one is changing our lives in ways we couldn’t even imagine before. However, its effects are very diverse because the laws of information differ from the laws of physical production. Thanks to modern technology, we can send hundreds of messages for free, shop at midnight, find a rare book in three clicks, and even to find a taxi during the rush hour. It is even predicted that cars will soon drive by themselves and we will be treated before getting sick. It is not the first time new technologies turn our world upside down.
All these have also changed our lives beyond recognition. Paradoxically, the most profound, most structural transformations are those that affect the way goods are produced. The transition from artisanal production to industrial production led to the creation of enormous wealth, the emergence of the middle class, and the formation of mass society. Because of the amount of transmitted and processed data, the digital revolution is making a far more profound effect on our lives the previous technological revolutions. 1. MonopolyOur physical world is governed by the law of diminishing returns. Formulated by Turgot two and a half centuries ago, it states: "An increase in one production factor leads to a decrease in output.” The law, which applies both to industry and agriculture, allows the freedom of competition. What it means is that anyone with enough capital and ideas can compete on a par with existing market players. In the digital world, it is not Turgot's law that is at work but that of Metcalfe. According to this American computer scientist, the usefulness of a network is proportional to the number of its users. For example, the more subscribers Facebook has, the more valuable this social network is. The more people use Google, the better the search results are. Quality increases with size. The economy of the platforms is the realm of natural monopolies. “The winner takes it all” is the name of the game here. Not because of their predatory behavior, such as that of Rockefeller at the beginning of the twentieth century, but because of the intrinsic characteristics of their activity. Nobody is going to nationalize Google and Facebook, even if they capture the bulk of the online advertising market. Regulating new monopolies, therefore, still remains a question to which there is no answer. 2. PolarizationThe loom, jackhammer, and assembly line — all of these inventions reinforce the efficiency of manual labor. It was machine owners who were the first to benefit from productivity gains. But little by little, employees caught up with them and took their share. Their incomes came closer to those who were better placed on the social ladder. So, an immense middle class formed. The rise of digital enterprises, artificial intelligence, or the availability of huge amounts of data reinforce the effectiveness of intellectual work. While the industrial revolution made the social ladder narrower, the digital revolution lengthened it. Intermediate jobs are being replaced by very low-skilled ones. Society is polarizing, and inequality is increasing. 3. PrivacyThis difference is the easiest to grasp. Thanks to new sources of energy, new materials, and mass production, industrial revolutions transformed our world beyond recognition. However, they didn't change the way we think. The information revolution, on the other hand, affects our perception of the world. The border between public life and private life is shifting or even disappearing. Our privacy isn't what it used to be. Any of these differences would be enough to change our lives and our society. However, the decline in competition in a polarized society exacerbates inequality (economy of "superstars"). Our privacy is getting threatened by increasingly powerful monopolies, and the way it is happening is reminiscent of science fiction dictatorships (such as the one in the "Minority Report" movie). A society in which privacy is fragmented is characterized by deep mistrust (a good example of it could be the election of Donald Trump). It is hardly surprising then that one wonders about the social purpose of companies in modern society.
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