The modern age is marked by a deep-rooted belief in the merits of technological innovation for human wellbeing and evolution. Ever since the thirteenth century, when the wordinnovare was first used by the German monk Albertus Magnus, humanity has been driven by the belief that new tools and new production and building techniques foster human advance. “No empire, no religion, no heavenly body can have a more fundamental influence on human conduct … than these mechanical inventions,” said Francis Bacon (1561–1626) at the dawn of the current Western civilization, expressing a maxim that gained tremendous global influence. New weaponry, machinery, transportation and health infrastructure, clocks, digitization and, lately, quantum computing have allowed humanity to accumulate such a degree of wealth and health that any critical doubting of the innovation culture is met with pushback by the established market forces. In contrast, newness is regarded asautomatic goodness, and many of the world’s major problems, mostly caused by technology, are now, we hope, equally able to be fixed by it.
Against this historical and cultural background, the digital transformation of production and society is embraced with little doubt as to its merits. The idea to digitally permeate everything that lives seems like natural advance. But do increased levels of production, government and household automation as well as digital mediation of social processes really lead to the almost linear form of continuous progress expected by our economic and political establishment? This book doubts that this isautomatically the case. Instead, it starts from the hypothesis that technological transformation leads to progress, only if it is actively shaped to create positive human and social value. The digital fabric is like fire or electric energy: it bears great positive value potential for humanity. However, it unfolds this service to humanity only if it is used wisely. Otherwise, it can also scorch the cultural, spiritual and economic soil that it set out to enrich. Humanity can just as much stumble into a stage of unexpected regress with digitization, as fire can burn down a house. Only an active shaping of digital services for positive value creation (Figure 1.1) can turn the wheel in humanity’s favor. This book is a guide on how this can be done.
Figure 1.1: Progress or regress through digitalization?
Technological progress: GDP or wellbeing?
Where do we stand today in terms of digital progress? So far, value creation is, often, primarily equated with monetary value. Economic systems worldwide and the theories catering to them equate the wealth of nations with financial utility. Gross domestic product (GDP) represents the monetary value of what is produced in a nation. And, from this monetary “value” perspective, digitalization has had extremely beneficial effects on all economies that manufacture goods and provide services. Digital automation allows companies to realize economies of scale, save significant production cost and increase work as well as capital productivity. Through corporate digital networks, especially ERP systems (like SAP), global markets can be served much more effectively out of one (instead of several costly) corporate headquarter, leading to positive GDP effects in all those countries where headquarters are based. At the corporate level, value in terms of profit soars when labor cost can be reduced or when costly office-rents are saved with home-office. Digital decision support systems speed up transactions and, thereby, the volume of what can be traded and managed. In this regard, the value creation curve triggered by digitalization (as depicted inFigure 1.1) has seen positive growth in the past four decades.
That said, the idea that “value” can be reduced in economics to a monetizable unit is increasingly being contested. The Gross National Happiness Index used by the state of Bhutan, for instance, has been an early frontrunner in the rising global awareness that GDP or monetary indices of production are not sufficient indicators for reflecting thevalue creation of nations or under
