Digital Transformations and AI - Video 2

Summary

The transcript discusses the relentless investment in technology and the digital transformation across various industries. It highlights the shift from less than 10% to nearly 25% of capital expenditures going towards digital, leading to the emergence of tech giants. The script emphasizes the importance of leveraging data and technology in settings ranging from traditional markets to modern platforms, showcasing examples in fishing, agriculture, media, and transportation. It concludes by reflecting on the democratization of industries and the potential for individuals to innovate with accessible technology.

Takeaways

• 🌐 Investment in technology has significantly increased, with capital expenditures on digital technology approaching 25% in developed markets.
• 🚀 The rise of tech giants like IBM, Microsoft, and Google is a result of the world's recognition of the potential of digital technology and its decreasing cost.
• 📈 Digitization is expanding globally, creating new opportunities in various sectors, such as agriculture and fisheries, through the use of data and technology.
• 📲 The availability of meteorological data on smartphones has revolutionized traditional practices like fishing, providing real-time information to enhance decision-making.
• 🛳️ Fishermen can now access real-time market data to choose the best port for selling their catch, optimizing their profits.
• 🌱 Precision agriculture through satellite imagery and low-cost sensors is enabling more efficient farming practices accessible via smartphones.
• 💡 The mindset shift towards embracing digital technology is as crucial as the technology itself for innovation and progress.
• 📉 The cost of innovation with digital technology has dropped, making it more accessible and fostering a culture of imaginative problem-solving.
• 🎥 The media industry has been democratized by digital platforms, allowing individuals to broadcast events in real-time, changing the landscape of news reporting.
• 🚕 The taxi industry has been transformed by ride-sharing services, shifting from an asset-heavy model to an asset-light, democratized transportation system.
• 🔋 The energy industry is undergoing a similar democratization, with individuals becoming both producers and consumers of energy through solar panels and other renewable technologies.

Q & A

What is the significant change in capital expenditures towards digital technology in developed markets over the decades?

The significant change is the increase from less than 10% of capital expenditures allocated towards digital technology to now approaching close to 25%.

Which companies are mentioned as a result of the relentless investment in technology?

IBM, Microsoft, SAP, Netscape, Amazon, Google, and Salesforce are mentioned as companies that emerged due to the investment in technology.

What is the key opportunity presented by the digitization of the world?

The key opportunity is to identify and capitalize on the new possibilities that arise from the increased digitization to drive innovation and business growth.

How has the availability of meteorological data impacted fishermen's practices?

Fishermen can now access meteorological data through smartphones, which helps them predict weather conditions, locate fish, and choose the best port for selling their catch based on market demand and prices.

What is precision agriculture, and how has it been made possible through technology?

Precision agriculture is the use of technology such as satellite imagery and low-cost sensors to optimize farming practices. It has been made possible through the availability of these technologies on smartphones, allowing for more efficient and targeted agricultural management.

What is the main barrier to applying digital technologies in developing countries according to the speaker?

The main barrier is not just the technology itself, but also the mindset of people, which requires education and包装 to make the technology accessible and understandable.

How has the cost of innovation with digital technologies changed over time?

The cost of innovation with digital technologies has dropped exponentially, making it more accessible and allowing for a wider range of applications.

What is the impact of digital transformation on the media industry?

The digital transformation has democratized the media industry, allowing individuals to broadcast news and information through platforms like Twitter, Facebook, and TikTok, rather than relying solely on traditional media outlets.

What is the concept of citizen journalism proposed by NPR, and how does it relate to the digital transformation?

Citizen journalism involves training high school students to report news in their communities, leveraging digital media platforms. It is a response to the decline of local newspapers and represents the democratization of news production through digital transformation.

How has the taxi industry been transformed by digital platforms like Uber and Grab?

Digital platforms have democratized the taxi industry by allowing anyone with a vehicle to become a driver, shifting from an asset-heavy model to an asset-light model and providing more convenience and options for passengers.

What is the parallel between the computing industry's evolution and the energy industry's current transformation?

The parallel is the democratization of power generation and dissemination, similar to how computing evolved from mainframes to personal computers and mobile devices. The energy industry is moving towards a model where individuals can produce and consume energy through solar panels, wind turbines, and other renewable sources, connected to the grid digitally.

Outlines

00:00

🌐 Digital Transformation and Technology Investment

The first paragraph discusses the significant increase in technology investment worldwide, especially in developed markets. It highlights the shift from less than 10% of capital expenditures going towards digital to nearly 25%. This has led to the rise of tech giants like IBM, Microsoft, and Google. The speaker emphasizes the ongoing digitization of the world and the opportunities it brings, using examples from different settings, including a Harvard classroom and the C aach Fish Market, to illustrate how data can be leveraged in various industries. The importance of understanding and adapting to technological advancements is stressed, as is the role of human imagination in driving innovation.

05:01

📡 Impact of Digital Media on News and Transportation

The second paragraph delves into the democratization of media and transportation due to digital technology. It contrasts traditional news broadcasting with the immediate, personal reporting enabled by social media, exemplified by a tweet from a Samsung executive during a plane crash landing. The paragraph also touches on the decline of local newspapers and suggests training high school students as citizen journalists as a solution. Furthermore, it discusses the transformation of the taxi industry with the advent of ride-sharing platforms like Uber, which have made transportation more accessible and democratized the role of taxi drivers.

10:04

🚗 Digital Transformation in the Auto and Energy Industries

The third paragraph continues the theme of digital transformation, focusing on the auto and energy industries. It describes how digital platforms have enabled individuals to use their vehicles for transportation and delivery services, creating income opportunities for millions in Southeast Asia. The paragraph also draws a parallel between the evolution of computing power from mainframes to mobile devices and the democratization of energy production, with the rise of solar panels and other renewable energy sources. This shift towards a more connected and decentralized energy grid is presented as an exciting development in the industry.

Keywords

💡Relentless investment

Relentless investment refers to the continuous and persistent allocation of resources, particularly in the context of technology and IT. In the video, it is mentioned as a driving force behind the significant shift in capital expenditures towards digital technologies, highlighting a major trend in developed markets over several decades.

💡Capital expenditures

Capital expenditures, often abbreviated as 'capex', are funds used by a company to acquire, upgrade, and maintain physical assets. The video discusses the historical increase in capex dedicated to digital technology, moving from less than 10% to nearly 25%, indicating a substantial change in business investment priorities.

💡Digital transformation

Digital transformation is the process of integrating digital technology into all areas of a business, fundamentally changing how an organization operates and delivers value to customers. The video script discusses how this transformation has led to the emergence of tech giants and the digitization of various industries, including media, transportation, and energy.

💡Tech giants

The term 'tech giants' refers to large, influential technology companies that have a significant impact on the global economy and society. Examples given in the script include IBM, Microsoft, SAP, Netscape, Amazon, Google, and Salesforce, which have all emerged due to the increasing availability and decreasing cost of computation.

💡Computation cost

Computation cost represents the expenses associated with performing computational tasks, which can include the cost of hardware, software, and human resources. The script mentions the decrease in computation cost as a catalyst for the increased use of computers and the opening of new opportunities in various sectors.

💡Smartphone

A smartphone is a mobile device with advanced computational capability and connectivity, often used for communication, internet access, and a wide array of applications. The video script uses the smartphone as an example of how technology has enabled access to data and services, such as meteorological data for fishermen, enhancing decision-making and efficiency.

💡Precision agriculture

Precision agriculture is an approach to farming that leverages information technology to manage agricultural processes more efficiently and effectively. The script mentions the use of satellite imagery and low-cost sensors to enable precision farming, illustrating how digital technology can transform traditional practices like agriculture.

💡Citizen journalism

Citizen journalism involves ordinary people, rather than professional journalists, creating and disseminating news through digital platforms. The video discusses the concept as a potential solution to the decline of local newspapers, suggesting that high school students could be trained to report news in their communities, democratizing the media industry further.

💡Ride-sharing

Ride-sharing is a service where individuals share rides in private vehicles that are available for hire through a digital platform. The script highlights the impact of ride-sharing services like Uber and Grab on the traditional taxi industry, transforming it from an asset-heavy to an asset-light model and democratizing transportation.

💡Digital media

Digital media refers to any media that is encoded in a digital format, such as text, images, and audio, that can be distributed over the internet or other digital networks. The video script discusses the democratization of media through platforms like Twitter, Facebook, and TikTok, allowing individuals to share news and information instantly.

💡Asset-light

An asset-light business model minimizes the company's reliance on physical assets, focusing instead on services and digital infrastructure. The script uses the example of the transportation industry shifting from a traditional, asset-heavy model with expensive medallions and taxis to an asset-light model enabled by digital platforms and individual drivers' vehicles.

💡Democratization

Democratization in the context of the video refers to the process by which access to opportunities, services, and power is spread more evenly across society, often facilitated by digital technology. Examples include the democratization of news reporting through citizen journalism, the transportation industry through ride-sharing, and energy production with solar panels and other small-scale energy solutions.

Highlights

Relentless investment in technology has led to a significant shift in capital expenditures, with digital investments approaching 25%.

The rise of tech giants like IBM, Microsoft, and Google is attributed to the increasing availability and decreasing cost of computation.

Digitization is expanding, creating new opportunities across various sectors, emphasizing the need to adapt and innovate.

Data explosion is impacting settings from classrooms to local markets, offering insights and efficiencies previously unavailable.

Fishermen can now use smartphones to access meteorological data, improving their ability to predict fish locations and catch yields.

Technology allows fishermen to determine the best port for selling their catch based on real-time market data.

Precision agriculture enabled by low-cost sensors and satellite imagery is revolutionizing farming practices.

The digital transformation is lowering barriers to entry in various industries, democratizing opportunities for participation.

Innovation with technology has become more accessible, with the cost to innovate dropping exponentially.

The importance of building an ecosystem to support and nurture technological imagination and innovation.

Media industry transformation, with traditional news outlets being replaced by social media platforms and citizen journalism.

The example of the Miracle on the Hudson River incident showcases the shift from traditional media to immediate social media reporting.

The concept of news deserts and the proposal to train high school students as citizen journalists to fill the gap.

The taxi industry's transformation from asset-heavy to asset-light with the advent of ride-sharing platforms like Uber.

The democratization of transportation, allowing anyone with a vehicle to participate in the ride-sharing economy.

Digital transformation in the auto industry, enabling new business models and income opportunities for millions.

The energy industry's shift towards democratization, with individuals becoming both producers and consumers of energy through solar panels and other technologies.

Market-making in the energy sector, driven by digital connectivity and the integration of decentralized energy production.

Transcripts

so let's just take a step back and just

think about the fact that uh worldwide

especially in in in uh in in um in in

developed markets there has been a

Relentless investment in technology in

it and you know over the many decades

we've gone from less than 10% of capital

expenditures so like what happens how

companies allocate money uh going

towards uh digital to now approaching

close to 25% that's huge change it's a

huge change and in that era what we've

seen is all these Giants come about

right like IBM and Microsoft and sap and

Netscape and Amazon and Google and

Salesforce all these companies came

about because the whole world said to uh

to each other the business World said to

each other that as more and more

computers become available as the cost

of computation goes down right we can do

more things with this and more

opportunities show up and I think that's

a really important thing because this

trend is going to keep continuing right

more and more of the world is going to

get digitized more of the ways in which

we interact is going to get digitized

and then the key for us is to say what

can I do with it what are the

opportunities that come up uh from this

to to make it happen so think think

about um some of our participants right

whether it's participants in our Harvard

classroom whether it's the Aspire

Institute participants who are living

their lives you know um buying and

selling fish in the C aach Fish Market

that you were talking about earlier um

or as part of a micro Finance community

in in Mexico City yes um give me some

sense of how this explosion of data is

going to matter to any of those settings

or pick any setting no 100% so look like

let's talk about the fisherman there's

been some great examples right so a few

things now with the smartphone now you

probably can get meteorological data

yeah right so you know like When Storms

will be coming or where the temp

whatever the water is going to be and

where the fish are going to be right

that's a that's P before it was like

instinct you would sort of smell the air

WID all wisdom like you know you know

Red Sky sailor Delight you know all that

kind of stuff like you know so those are

all wisdoms now you can quantify it and

you can have it available to you on your

smartphone so it makes your life easier

there's these great examples of when

fishermen go out there and they're

fishing they need to land at a port to

sell their fish right and different

ports and different Brokers will offer

different prices right and so now they

can get immediate access to saying where

should I go which Port would offer me

the best price for my fish where is

their relative scarcity of fish they go

there exactly exactly right and so

before you would always go the same port

and maybe your broker cheated you

because the supply was a lot and then

you were like okay the prices are going

to drop right but now you know exactly

where the demand is going to be and you

can go that or even agriculture right

same with agriculture right as we were

talking

earlier a big portion of the world

relies on agriculture as a source of

employment of employment and so forth

but now you can with salad imagery

that's now low cost you can do Precision

agriculture all again available through

your smartphone right and with lowcost

sensors you can do so much more so so

now the you know like now we're like

digitizing the the the the farmers field

right and putting it into into action

absolutely along the way so what's

interesting to me about this Kore is is

that I think uh and tell me if you agree

with this perspective my perspective

from wandering around the developing

world is that the barrier to applying

these is as much in people's mindsets as

it is in the technology technology has

moved way ahead yeah for humankind to

catch up with it

requires i' like to say

self-servingly people who are packaging

it in a way that they can that they can

understand it 100% I mean look I mean I

think I think the the big thing my sense

is that the cost to

innovate with these Technologies has

dropped exponentially right and the

tools available to use the Technologies

has become widely available so now I

think it's a matter of imagination it

really is I it really is it really is

and and if I can connect to what we

spoke about earlier it's about building

the ecosystem to allow this imagination

to click in exactly the tool is there

the science is there the the ability to

compute compute power is very

compared if can sit there and say do an

exercise of what ifs yes um which I

highly encourage every to do all the

time it's like what if we what if we did

something crazy and then think okay to

make that happen I need to do ABC like

the examples we were talking I think

this is very cool yeah yeah and just to

sort of keep keep giving a few more

examples of this right this is impacting

a whole bunch IND industry so in the

media industry we see the same thing

right so what what what the folks are

seeing right now is what happened what

used to happen in the past so there was

this great um uh there's a movie now too

about the the Miracle On Hudson River

remember the US Airway plane that lost

lost his power and then U I forget the

name of the captain he sort of

landed yeah very famous Sul Sul Captain

Captain Sul land there's a movie about

it Tom Hanks played Sully you know hero

all that kind of stuff this was like

broadcast live on CNN right because CNN

studio was right there right and it was

made all news right traditional side

then a few years later uh there's a

amazing example of of this treat so in

San Francisco uh um you know uh a plane

coming from Korea crash landed I see on

the on the runway in San Francisco and

David un who had who's a Samsung

executive who I got the chance to meet

writes the following tweet right I just

crash landed in San Francisco

tail ripped off most everyone seems fine

I'm okay surreal and he posts a picture

so David is my classmate is he really

you're kidding me you know that I didn't

know about this tweet it's so funny

David was at Harvard Law School no way

the same year that you were HBS yes and

we met because I did a lot of work on

Samsung next when he whipped it okay

well small world here we are digital

world so so so again before you needed

CNN big cameras now it's presses the

person in in who's experiencing the news

is part of the news is the news story

themselves is breaking the news right

and that's what Twitter did that's what

you know Facebook's done right that's

what Tik tok's done and so forth right

like it has basically shown that the

media industry which was concentrated

amongst all these TV studios and all

these newspapers is now fully

democratized for both good and for bad

right in terms of what that does right

so this is part of the digital

transformation again smartphone and then

somebody saying I'm going to build a

platform to to trade images and to trade

little bits of information becomes a

media platform as well so this morning

uh when I was driving in to do this uh

to this video shoot um on National

Public Radio there was a story there's

been a lot of angst in America but local

newspapers dying out the economics are

not working and private Equity firms

coming in and gutting them and so on and

it's a mess because you have these News

desert desert deserts news deserts which

is bad for democracy and so on so the

NPR guys suggested and I thought it's

just brilliant is look just take the

kids in the high school and train them

to be citizen journalists yes and

they'll wander around they'll get

they'll get expertise in learning how to

write they get expertise interviews to

interview to prevent to present balanced

perspectives and bring them into it

don't think of it as a you know Calamity

that we ring our hands think of it as an

opportunity that we can do something

with exactly that's the democratization

of news and it's it's feasible because

of digital media exactly exactly great

and then of course all of us experience

this now globally about what happened to

the taxi industry right so grab and yeah

Ola d u u you know Kareem in the Middle

East you know all these things happen

and do you

remember 15 years ago how hard it was to

get a taxi in Cambridge Massachusetts

yeah how like I think I would call I to

like book week ahead uh and they would

give me like a 2-hour window well maybe

the taxi driver will show up right and

then they would be mad at you anyway

that you disturb them from drinking

their donuts and drinking their coffee

and donuts right and maybe they would

show up do you remember that do in in in

newon we had this kinly guy who would

shout at you if you call him yeah you to

call

somebody right uh and so we were in this

world where taxi drivers had to buy the

cabs right uh and you medallions

medallions were super expensive and so

for and then we went to this world that

Uber started which was like ride sharing

right like you can basically have it

starts first with limousines but then

any driver with with u um with lift

actually starting that that that that

Revolution any driver could take anybody

somewhere else and just think about how

much the world has changed right like

you're now getting

into a car of a stranger and they're

going to take you from point A to point

B and you're not going to give them any

money it's in the back end it's all

digit digitally enabled through your

credit card or through your payment

system and and so we went from this

world of asset heavy to asset light

right and and we democratized who could

be a a taxi driver we democratized

Transportation now it wasn't just a

monopoly of cab drivers and limousine

drivers anybody could could potentially

participate you know when I was talking

to Anthony tan uh the C the co-founder

and CEO of of of grab in Southeast Asia

he goes that you know they're they are

enabling 10 million Southeast Asians to

have income right because they now can

use their mopeds their bikes or their

cars to do delivery to do transportation

and so on and so forth and so again

that's this the digital transformation

of the Auto industry and look more

generally we've been sort of living

through these waves over time of all

these companies coming in and

transforming uh from going from an era

of mainframes and computers to PC and

the web to mobile to networks and Ai and

now we're in this world of

AI so an interesting U parallel that's

going through my mind because we started

with uh thermostats and utility

companies and nest and so on um and in

some sense what we're also living

through because of digitization in the

energy industry is sort of what the

Computing industry went through from

mainframes to PS to handheld

supercomputers is that the generation

and dissemination of electric power yes

is being democratized right so you have

solar panels you have small wind

generating Machin and a whole geothermal

geal plora so everybody is going to be

an energy producer and a consumer

connected to the grid digitally right

and then you have this amazing Market

making going on it's very exciting yeah

yeah