one that features cloud-pipe-device synergy. The new ICT is the combination of these foundational, enabling and digital transformation accelerators ─ Cloud, Big Data, Software-Defined Network( SDN,) 5G, and IoT.
Challenges
The challenges created by the fourth industrial revolution appear to be mostly on the supply side, in the world of work and production. As a result, the great beneficiaries are the providers of intellectual or physical capital, the innovators of intellectual or physical capital. These are the innovators, the investors and the shareholders, which explains the rising gap in wealth between those who depend on their labour and those who own capital. The concentration of benefits and value in just a small percentage of people is also exacerbated by the so-called platform effect, in which digitally driven organisations create networks that match buyers and sellers through a marketplace comprising a wide variety of products and services, and thereby enjoy increasing returns to scale. The consequence of the platform effect is a concentration of a few powerful platforms that dominate their markets.
Looking at financial services as an example of the impact of these platform companies, these new strategies adopted and deployed by the aforementioned platform companies are even more challenging for incumbent banks. By creating a unified customer-centric value proposition that extends beyond“ the walls” of what users could previously obtain, digital pioneers are bridging and merging the value chains of various industries to create vastly more scaled ecosystems that reduce customers’ costs, increase convenience, provide them with new experiences, and whet their appetites for more. This is compounded exponentially by the network effect. Not only do they have exceptional data that they exploit with remarkable effectiveness but also, and more worrisome for banks, they are often more central in the customer journeys that include big financial decisions, while at the same time through leveraging the assets of the 2 nd information age and the distributed, hyper-connected Internet.
Platform paradigm in action
Consider Rakuten Ichiba, Japan’ s single largest online retail marketplace. It provides loyalty points and e-money usable at hundreds of thousands of stores, virtual and real. It issues credit cards to tens of millions of members. It offers financial products and services that range from mortgages to securities brokerages. And the company runs one of Japan’ s largest online travel portals— plus an instant-messaging app, Viber, which has some 800 million users worldwide.
Likewise, Alibaba is not just an enormous e-commerce company; it’ s also a large asset manager, lender, payments company, B2B service, and ride-hailing provider.
Tencent is making similar advances from a chat-service base. And Amazon continues to confound rivals with moves into the cloud, logistics, media, consumer electronics domains, and even old-fashioned brick-and-mortar retailing— and lending and factoring for small and medium-size enterprises.
Such companies are blurring traditional industry boundaries. With their superior customer experience, they can sell an ever-wider range of products to their loyal customers. The manufacturing end of many businesses is fading from view, as the platform companies increasingly dominate the distribution end of multiple businesses, providing a wide range of products and services from a single platform.
Those companies that can break down the walls to become more relevant to their customers lives by enabling and providing endto-end and last-mile connectivity, combined with the platforms and integrated“ glue” required to enable the convergence of the emerging technologies of the fourth industrial revolution, will be best positioned to scale and remain contextually relevant at the center of customers’ attention. This, in turn will continue to contribute to their exponential growth.
These are the companies that are making our lives easier, every day resulting in economic gains for all, while also giving us enhanced and balanced livelihoods. It’ s an exciting time to experience this transition to this new information age and the next step of progress in humanity.
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