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  • Jack Lau

New Buzzword: Digital Transformation


Every now and then, we hear a new "hot" term in the engineering world. Apparently, hot topic is not limited to the engineering side.

We have had the privilege of surveying some executive business education lately, given that we are engineers and business oriented. To our surprise, a number of the business schools are now offering executive education courses on a topic called Digital Transformation. Schools that offer such courses are no less that the like of Harvard (https://www.exed.hbs.edu/programs/digs/Pages/default.aspx), MIT, Duke --- to name just a few. In fact, even if we went far away to Russia, the call for knowledge (from the business school education stand point) is loud and clear.

So, why did we say that we are surprised (pleasantly) in the first place?

Well, we are surprised because essentially as electronic engineers, we have been seeing quite incredible advances in digitization in the last few decades. For instance, the first 2G standard was introduced in 1991. The first CD music player (rather than using cassette and vinyl record) revolutionized the way we enjoyed music in 1982. But, it was the introduction of iPod and other MP3 players that enabled us to enjoy portable music without any moving parts. (The first generation of iPod technically ran on hard disk which still had moving parts.)

In any event though, digital must have impacted all of us one way or the way for the past 20 to 30 years. So, why is "digital" suddenly such a hot topic?

For one thing, in many economies, the rate at which it turns completely digital is a measurement of their progress. China, in this regards, is heralded as a leader. In fact, McKinsey published a report called Digital China in late 2017 detailing the success and opportunities for a new digital China. It is a very worthwhile read. You can download the report from https://www.mckinsey.com/featured-insights/china/digital-china-powering-the-economy-to-global-competitiveness.

OK, we understand why digital transformation is great for the economy --- more efficient traffic control, food delivery, buying e-books etc etc.

But, why suddenly business schools are talking about it?

For this we have to go back to the underlying technology engines. To enable a digital economy, we believe that you need 3 pillars:

a. Speed

b. Memory

c. Openeness

Let us try to explain.

Speed: While we are reading this blog, we are benefiting tremendously from the speed of fast hardware and connectivity. Hardware speed is essentially enabled by the speed of the various silicon chips (processors). Connectivity is enabled by our communication systems. If you are on mobile, imagine the speed going from 2G twenty years ago to 4G/5G now.

Memory: Here we are referring to the storage memory. Memory these days are fast, reliable and quite cheap. (Well, except when you buy an Apple product, the extra memory is way more expensive than the price of stand-alone memory. But, that is another story :) Larger memory and speed also allow the possibility of cloud storage and cloud computing. All goodies for digital technologies.

But, the above two have been steadily improving over the past decades. An easy way to think about is it is tracking still rather well with the Moore's Law ---- complexity of a silicon chip doubles roughly every 18 months to 24 months.

So, if the above are just steady (but great) improvement, then why such a sudden acceleration?

We believe the biggest contributing factor of this is the third factor.

Openness of the Technology World: What do we mean by that? Well, what has been interesting is that a lot of technologists, and mostly from the software side, are very willing to share with others their invention. This has enabled an extremely rapid explosion of technologies options. It is not uncommon for technologists to (a) ask on platform how to solve a problem, (b) answer those questions with credible solutions, and (c) even share openly their hard working results on the internet. Bravo to all this great contributors in the tech world.

Nowadays, it is entirely possible for folks to write a piece of software doing everything from creating a chat bot to big data analysis on open source. In fact, what started out just as a sharing platform, Github, was acquired by Microsoft for US$7.5 billion in June this year.

Other enabling (co-working) platforms such as Slack, Stackoverflow, etc are just equally impressive. (Slack is a platform for everyone to share code; Stackoverlow is a web site when people post questions and answers to technical questions.)

Institutions like MIT, Berkeley, Stanford, Carnegie Mellon have all contributed to the open source platform. In fact, MIT is one of the pioneers on something called Open Source Initiatives, encouraging everyone to contribute to the Open Source. (https://opensource.org/licenses/MIT).

The Open Source initiatives enable millions and millions of coders to contribute, maintain, and improve the overall technologies. While Moore's Law says silicon will double in complexity every 18 months or 2 years, we believe that Open Source platform enables the improvement of software at lightning speed and probably contributes more to the sudden digital transformation than anything else.

Coming from a Chinese family and watching too many Kung Fu movies, this is really weird if you think about it. In a classic Kung Fu movie, the Kung Fu masters of different sects always hide their secret moves and will never share :) (Just a weird thought.)

And, we are not kidding, nowadays some of the tasks which used to be so difficult can be done rather easily. You can even dabble on making a language translator with very little coding.

Life is great; and technologies are wonderful. Let's see how far we can go.

Finally on a separate note, last week, at a local newspaper in Hong Kong (Ming Pao), an article was published detailing the valuation of the some of the largest start-ups. Thought it would be interesting to share.


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