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Collection Highlights

Digital Fluency Understanding the Basics of Artificial

Intelligence Blockchain Technology Quantum Computing and
Their Applications for Digital Transformation Volker Lang

Playful Disruption of Digital Media Daniel Cermak-

Sassenrath

New Trends in Business Information Systems and Technology:

Digital Innovation and Digital Business Transformation
Rolf Dornberger

Artificial Intelligence and Machine Learning for Digital

Pathology State of the Art and Future Challenges Andreas
Holzinger
Digital Transformation and Human Behavior: Innovation for
People and Organisations Concetta Metallo

Organization design and its impact on the digital

innovation process and the digital innovation outcome
Robert Eirich

Information Systems Outsourcing The Era of Digital

Transformation Rudy Hirschheim

The Globular Star Clusters of the Andromeda Galaxy Iop

Concise Physics Charli M Sakari

The Digital Transformation of the Public Sphere: Conflict,

Migration, Crisis and Culture in Digital Networks 1st
Edition Athina Karatzogianni
 ARTIFICIAL INTELLIGENCE:
THE STAR OF THE DIGITAL
GALAXY
A study of Digital Disruption, Innovation, and Economic Transformation

Amit Asawa
 Artificial Intelligence: The Star of the Digital Galaxy Copyright © 2018 by Amit Asawa. All Rights Reserved.

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems,
without permission in writing from the author. The only exception is by a reviewer, who may quote short excerpts in a review.

Cover designed by Amit Singh

Amit Asawa

Printed in the United States of America

First Publishing: June 2018

Amazon Kindle
This book is dedicated to all the wonderful people who are special to me.
Artificial intelligence will reach human levels by around 2029. Follow that out
further to, say, 2045, we will have multiplied the intelligence, the human
biological machine intelligence of our civilization a billion-fold.
—RAY KURZWEIL, AN AMERICAN INVENTOR
 CONTENTS

Author’s note
Acknowledgement
Introduction
Transformation

Technology Transformation
Products and services Transformation
Business Transformation
Employment Transformation
Economic Transformation
World Transformation
Summary

Key Technological Drivers

Foundational Drivers
Booster Drivers
Summary

Digital Economy Platforms

Conversational Systems
Recommender Systems
Recognition Systems
Content Generation Systems
Other systems
summary

Reimagined, new and fading businesses

Reimagined and new businesses

Fading businesses
Summary

Challenges and Risks

Social
Technical
Legal and ethical
Economical
Environmental
 Summary

Conclusion and what’s next

About The Author
 AUTHOR’S NOTE

THE PHENOMENAL GROWTH OF DIGITAL TECHNOLOGIES is creating a tectonic shift in business. The
explosion of information and increasingly growing mastery of available data are opening up endless
economic opportunities, as the digitally-led economy is expected to double every 18-24 months. This
shift might not be possible without Artificial Intelligence (AI). AI is becoming the star of the digital
galaxy. Gradually, it is becoming an integral part of human life, and its understanding should not be
limited only to corporations or academicians. Large-scale companies already have robust training
frameworks in place that expose their employees to this emerging digital technology. Existing and
upcoming small to mid-size organizations both inside and outside the technological realm, could have a
challenge to functionally orient their employees to new emerging digital technologies. Similarly, a non-
expert will get inundated by the complexity and vastness of information in this area. However,
unfortunately, there is no single place to look for a comprehensive view of today's digital galaxy, which
would perhaps answer questions like:
1. How are digital technologies transforming human lives and businesses?
2. What are the key technical drivers behind these transformations?
3. Which digital economy platforms are taking the lead?
4. How are newer business opportunities created?
5. Which businesses are at the risk of disappearing?
6. What are the challenges for the digital economy?
7. What is coming next?

These questions are important for the current and future digital workforce, small to mid-size
enterprises within and outside the technology realm, academics, and the general population who wants
to understand these emerging digital technologies and their practical uses.

This book is intended as a primer to simplify and explain the concepts, implementations, and
implications of the AI-powered digital galaxy. This publication will also endeavor to help readers know
and understand the digital disruption, innovation, and economic transformation resulting from new
digital technologies. Additionally, it will identify and illustrate the growth and development of various
digital events from the last decade that have had an impact on modern businesses and lifestyle. This
study will also show how data, automation,3D-printing, distributed ledgers, IoT(Internet of thing),
immersive experience, digital twins and various sub-technologies of artificial intelligence such as
conversational platforms, recommender systems, machine vision and machine learning are shaping the
twenty-first-century business model and human way of life. Additionally, the effectiveness of digital
solutions will be assessed and recommendations will be shared. The author hopes these suggestions will
inspire new business ideas.

The primary objectives of this book are

1. To specify twenty-first-century smart technologies and how they are already helping or will help to
conduct digital business and achieve maximum profitability
2. To identify the digital disruption trends, impacts, and opportunities in the light of artificial
intelligence (AI) and to evaluate promising use cases of AI within the existing business landscapes,
or suggest new business paradigms by recommending additional revenue stream opportunities
3. To summarize the economic landscape of the digital economy, how it is shaping up, and what
possibilities, risks, and remedies it offers for entrepreneurs

This book is also an endeavor to deconstruct complex digital technologies in a lucid language to help
readers from all walks of life to understand the following
How to be a part of cutting-edge technologies
Socioeconomic transformations
The Ubiquitousness of Artificial Intelligence
Unstoppable automation of common services
Data usage today
Aspects of online interactions
Money making technologies
 ACKNOWLEDGEMENT

THE MOTIVATION FOR THIS BOOK has resulted from the combined efforts of many dedicated
professionals in Artificial Intelligence and other digital technologies who have supported me directly and
indirectly. I thank Tony Bolthouse, Sudipta Mitra, Swapna Mamidanna, Dr. Rhoda C. Joseph for
envisioning an informational book with me and Amit Singh to give it a beautiful appearance. Thank you
so much for freely and unreservedly providing me countless hours of support, and paving the way for
my research. I would also like to thank my colleagues for their insights and guidance.
I acknowledge the assistance provided by Christopher Coyne and Tracy Anne from the Penn State
University, Harrisburg, PA. Special thanks to Dr. Ozge Aybat, Dr. David Alan Morand, Pramod Madhav,
Leo Senn, Steven Hartzfeld, Rambabu Nimmala, Sophie Guo, Abhishek Dasgupta, Stacey Trunk, and Zail
Singh for helping me out significantly through many useful discussions about digital technologies and its
impacts
I acknowledge my daughters, Amishi Amit and Aishi Asawa, who are my greatest accomplishment
and remain my greatest motivation. I thank them for the motivation they continue to provide me daily
I am indebted to my parents who have continued to support and encourage me through this journey
of discovery. Your belief in me, your encouragement when the times got tough, and your assistance
through this process gave me the strength to succeed
Finally to the beautiful Arpana Asawa, where were you for the first two years? While this process was
expected to get harder and more frustrating as it came to an end, you still made it the journey
enjoyable and kept me focused. I wouldn't have made it to where I am without your love and
compassion. I love you very much
Though not specifically named here, there are others who may have contributed to my endeavor from
afar, to them I will always be thankful.
 INTRODUCTION

TODAY THE WORLD IS IN THE MIDST OF A DIGITAL TRANSFORMATION storm. This transformation
reshapes every aspect of our lives and touches every little piece of life that surrounds us. This storm
compels us to re-imagine the way we interact with our friends, customers, clients and most importantly
our family. This phenomenon also has immense impacts on the way we conduct business. It changes
how we book a hotel room or hire a cab or buy groceries, books or shoes. The digital revolution has
dramatically reduced entry barriers for any new service resulting in a lot of disruption of well-established
business models (Borders, Circuit City, ToysRus, Sears, Nokia, to name a few). In this era, a business
survives on only one criterion - their ability to be part of the digitally-led transformation journey or left
behind and perish. This book systematically analyses and describes the tributaries which feed into the
river of digital disruption and transformation of our lives, businesses, and ecosystems.
The availability of high-speed internet, adoption of mobile devices, the evolution of the mobile app
ecosystem, the advent of cloud computing, the evolution of platform as a service (PaaS), and the ability
of data acquisition and processing are the building blocks for today's digitally-led economy. These
building blocks have accelerated the growth of digital technologies and now these technologies are
playing a crucial role in the twenty-first century's industrial and social revolution. The prominent digital
technologies are digital representations (digital-twins), distributed ledgers (Blockchain), immersive
technologies (virtual/augmented/mixed reality), additive manufacturing (3D-printing), IoT (Internet of
Things), and robotics. While the digital economy is boosting a techie culture, digital technologies are
transforming the status quo of conducting business into revolutionary ways. These shifts are not only
providing an ecosystem for AI implementations but are also demanding an AI first strategy.
Initially, prominent technology companies such as Google, Apple, Facebook and Amazon, known as
digital titans, brought AI from research labs to regular businesses. Therefore, AI is primarily perceived
to be associated with digital products and services. But the ability to place connected sensors, intelligent
logic, memory, and reasonable battery power inside many physical objects helps manufacturers in
turning their physical products into digital ones. The e-cigarette is one of the strongest examples of a
digitally transformed product. There are several other noticeable instances, such as HP Instant Ink,
OMSignals biometric sports clothing, and AdhereTech smart pill bottles.
Gradually AI is weaving itself into other industries as well and it is not uncommon to see AI-powered
products and solutions across the industries. For example, back in the days, industries heavily relied on
individuals' knowledge to assemble the parts of a complex machine. Additionally, a highly skilled
technician was required to operate the machine. But, today machines are not only robot operable but
also they are AI-enabled. The machine would not let a part (even a software) be activated if the
machine was not configured in the right way. Thus, before delving into the technicalities of AI, it is
important to understand its ecosystem. In this book, the chapter on Transformation recognizes the
pioneers and leaders in the digital economy and discusses how they are transforming the traditional
economy into the digital economy
This book also summarizes the fields, technologies and social aspects that are either already
metamorphosed or are in the process of transforming to support the digital economy. Moreover, the
chapter on Transformation evaluates the impact of these transformations on people, businesses, and
economies. Similarly, the chapter on Key Technological Drivers states the key digital technologies
that drive the digital economy and demonstrates how these technologies and modules are being used in
business.
People and businesses are using AI every day. The smart reply feature of email services is based on
an AI algorithm. These email services are also employing AI to predict spam emails. Smartphones have
AI-enabled personal assistants and their cameras are AI-powered. Social media is deploying AI for a
variety of purposes such as to recommend friends, push news feeds, identify fake accounts and spot
suicidal tendencies.AI-enabled recommender systems are the backbone of companies like Amazon,
Netflix, Google and many other online retail and entertainment providers. Financial institutions are
utilizing AI to offer check deposits via phone. They are applying AI to spot fraudulent payments and
predict loan repayment behaviors as well. Additionally, they have AI-powered robot-advisors to assist
their customers in making investment-related decisions.
In education, AI is grading high school essays. In media and the news industry, AI is writing news
articles and even books. AI machines are also capable enough to write movie scripts for the
entertainment industry. In the Aviation industry, commercial airlines are trusting AI assisted autopilots.
The manufacturing industry is enjoying brilliant robots and reducing operating costs significantly. The
shipping and logistics industry relies on AI to know optimal routes for delivery. They even have AI
enabled algorithms to optimize package size. Within the brick and mortar retailers, those who have
eliminated human cashiers and checkout counters are using AI to track purchases and charge shoppers.
Healthcare providers are employing AI-powered techniques/ equipment for better diagnosis. AI robots
are even assisting physicians in operating rooms. Insurance companies are deploying AI to detect claim
frauds. AI algorithms help staffing companies in selecting the right candidate for a job. For marketers
and advertisers, AI is invaluable when it comes to targeted marketing campaigns for products.
The AI-powered business solutions list can go on forever. In a nutshell, during the digital disruption
era, the ubiquitousness of AI is astonishing. For any industry, AI enhances consumer/guest experience
and increases operating efficiencies while lowering costs. Therefore it is important to understand in
detail how AI technologies are being practiced in businesses. The chapter on Digital Economy
Platforms, describes the artificial intelligence based digital economy platforms. This chapter also
demonstrates how these platforms are being used in business and life. The AI scope of influence will
continue to expand and soon, it will change every aspect of human life in an unimaginable way.
With the advent of newest digital technologies and AI, the whole socio-economic, legal, and
regulatory structure is evolving. These transformations are opening doors for newer business
opportunities and causing a disruption in the current business settings. They are also threatening some
of the existing businesses in unexpected ways. Historically, the competition was upfront and limited to
the same industry. Ford Motors, for instance, might have a competition with Toyota (automotive to
automotive industry) but during the AI-powered digital era, this trend is changing. For example, the
amazon.com website started as an online bookstore. Back in those days, nobody imagined that one day
it would not only be the largest internet retailer but also the biggest threat to brick and mortar retailers
of all types of products and services. Therefore, it is crucial to take a deeper look at these rapidly
changing business dynamics. The chapter on Reimagined, New, and Fading Businesses in this
book identifies emerging business opportunities created by the digital economy. This chapter also
assesses the potential opportunities and threats to the digital economy created by these business shifts.
Additionally, it identifies and evaluates the industries that are already at risk or will be at risk of
disappearing.
Artificial intelligence (AI) is beginning to shake up the world. Techies are excited to see AI in action
and think it is going to help humanity and businesses. However, the workforce is scared by the prospect
that it could take jobs away. Like there are two sides to a coin, the effects caused by AI are yet to be
fully discovered. The jury is still out on how AI will handle security, privacy, digital ethics, and machine
biases. Therefore, an examination of challenges and risks of AI is desirable. The chapter on
Challenges and Risks in this book assesses the impact of these challenges and risks on people,
businesses, and economies as well as outlines potential remedies.
The chapter titled Conclusion and What's Next in this book summarizes the economic landscape
of the digital economy, how it is shaping up, and what opportunities, risks, and remedies it offers for
entrepreneurs. This chapter also attempts to predict the future of artificial intelligence and emerging
technologies.
Today, AI is on the national agenda of many countries, and the world's top economies such as United
States, China, Japan, Germany, United Kingdom, India, and Russia are already racing to be the global
leader in AI. Indeed, "every company needs to be a technology company" has never been truer or more
urgent than it is right now. During the twenty-first century, every person on the planet will be part of
cutting-edge technologies in some way, no matter what profession they are in.
This book welcomes everyone to the artificial intelligence (AI) driven industrial and social revolution.
It should help readers to understand socio-economic transformations, unstoppable automation, data
usage and online interactions today, and of course the ubiquitousness of artificial intelligence.
 TRANSFORMATION

Technological change in societies and

businesses

Digital transformation represents the next stage of business maturity

which will improve how the enterprise works and interacts with its
ecosystem, with the people at the center of its focus.
—Pearl Zhu, the Author of "Digital Master"​book series

T oday, it is hard to find an industry or even a phase of human life which is not transformed by data,
digital technologies, and artificial intelligence. Apple's iTunes has transformed the music industry; Uber
transformed the taxi services; Airbnb transformed the logistics and accommodation service industry;
Bitcoin and other cyber currencies are going to transform the traditional currency; smart products are
transforming the way the human race is living, and there are many other similar examples. The digital
transformation can be better explained by splitting it into six major groups: technology, products and
services, business, employment, economy, and society.

TECHNOLOGY TRANSFORMATION

Few things change more often than technology, and whenever it changes a transformation happens.
For example, telephones transformed into the smartphones which has touched every aspect of human
life. Desktop computers transformed into laptops and later laptops transformed into tablets, these
transformations are no different from smartphones. This list can go on forever. A better way to
understand technology transformation is by splitting it into four major categories: from the graphical
user interface (GUI) to visual and voice interface, from inaccessible technology to accessible technology,
from traditional algorithms to self-learning algorithms, and from manual operation to self-operation.

From Graphical user interface (GUI) to visual and voice interface

Touch screens and voice-enabled devices which are ubiquitous and gradually replacing the keyboard
and mouse-based systems, are not only easier to use but are also eliminating the graphical user
interface (GUI) disadvantages. There is an enormous number of individuals for whom the GUI has never
worked in the first place. For young children, the visually impaired and the otherwise technologically
challenged, it has always been a little laughable to hear anyone describe a GUI interface as “intuitive".
It’s not just that voice and visual interfaces are finally possible to build, there is also a growing need
for it. As more devices come online, particularly those with small or nonexistent screens such as light
fixtures, alarms, vacuum cleaners, and watches, there should be a better way to interact with these
devices. Whereas a visual interface helps in communicating with smaller screen devices, voice interface
works well for screenless devices. Since consumers cannot quickly put a keyboard on many home
devices such as coffee pots, the easiest input method is by way of the voice. Speech input technology
allows users to offset the challenges of cumbersome keypads, complicated menus, and seemingly
endless clicks. Additionally, a voice interface along with artificial intelligence is useful for virtual personal
assistant development, which would further simplify the complicated, tedious, multistep processes that
use drop-down menus, complex workflows, and hopscotch from application to application.
The day is not far when these interfaces will be further streamlined into simple, easy, and accessible-
to-all voice interfaces and will rule the Digital Economy.

From inaccessible to accessible technology

Up until now, technology has had a hard time properly serving people with disabilities, including those
who are deaf, without the full use of their hands, and the blind. Voice and visual interfaces have helped
somewhat, but with the advent of Artificial Intelligence (AI), technology has started to reach the
underserved. AI sub-technologies such as text to voice and deep learning services, both of which can
analyze a photo and read to the blind is on the way. For example, the Chinese tech giant Baidu
introduced the Dulight--Eyes device for visually impaired. Dulight uses deep learning, image recognition,
and speech recognition technologies to help visually impaired people by identifying people and objects
in their lives. Facebook is also working on an Artificial intelligence based tool which will analyze a photo
and will describe it in detail to the blind.
Additionally, a lot of work is going into the development of Brain-Typing and Skin-Hearing interfaces.
These kinds of interfaces will make technology accessible to paralyzed people as well.

From traditional to self-learning algorithms

In the past, computer programming worked on IF, THEN, and ELSE based clauses such as IF 'a'='b'
THEN ‘c’ ELSE’d’ is true. This kind of programming gets cumbersome for a high number of uncertain
variables and is difficult to code and manage. Imagine how many IF, THEN, and ELSE clauses would be
needed for Netflix recommendation engines, specifically when it has more than 75 million subscribers in
more than 190 countries. Now, programming has a better option. The artificial intelligence sub-
technology machine learning is designed to handle the vast amount of uncertain variables to solve the
complex business problem and it learns by itself. These self-learning algorithms are the building blocks
of the growing digital economy.
The adoption rate of these algorithms is very high - Google, Apple, IBM, Microsoft, Netflix, Amazon,
PayPal and many other companies are implementing self-learning algorithms in a variety of ways. For
example, Netflix and Amazon recommendations are based on these algorithms; PayPal uses a self-
learning algorithm in fraud detection.

From manual to self-operation

Generally, the norm is that technology is human operated. For example, people drive the car and
operate the phone, computers, laptops, televisions etc. However, this trend is changing now and
technology is reaching a point where it can operate itself with minimal human intervention. For
example, pilots, usually handle only takeoffs and landings, and the rest of the flight is controlled by
autopilot. In some newer aircraft models, autopilot systems can even land the plane. Another example
is the iRobot vacuum cleaner which can self-operate and clean the house. Autonomous vehicles such as
self-driving cars and self-flying drones are on the way.
Technological transformation appears differently to different people. For example, touchscreen mobile
devices are one of the most visible outcomes for consumers, whereas self-learning algorithms are one
of the leading breakthroughs for producers of technology. This transformation sits at the foundation of
the hierarchy of technological transformation.

PRODUCTS AND SERVICES TRANSFORMATION

Personalized products are in demand, and consumers are willing to pay a premium for it.
Personalization comes in two variants: static and dynamic. For example, putting an owner’s name on a
pen is a static personalization. However, dynamic personalization gives the pen an ability to change the
colors automatically based on the owner preference. Static personalization has always been there,
however, the digital economy brought dynamic personalization to the table with the help of data
acquisition and analysis capability. Therefore in the first place, the digital economy needs to make sure
that products are capable enough to generate data. Digital products, also known as virtual and internet
products are already generating and analyzing data and remain better at personalization than their
physical counterparts such as the television. Digital/Virtual/Internet products are those that do not offer
any physical products, such as Netflix, Twitter, Facebook, Instagram, and Google. They developed their
technology from the inside out and thus they are better equipped to provide personalized products to
their consumers. For example, Netflix has more than 75 million subscribers in more than 190 countries,
and each of them is served a different experience each time they log in. In addition to offering a
personalized experience, their ability to directly monitor, access, and control the products gives them a
cutting edge advantage. A person sitting in Los Gatos, CA, USA (Netflix headquarter) can improve the
Netflix experience for all 75 million subscribers in a minute or even less.
Physical product companies are those that make and sell tangible products such as toothpaste. Their
products are not in physical proximity to the business, rather they are in the customer's hands.
Moreover, these companies developed the technologies from the outside in, and apart from the core
product, everything else was made digital first. For these kinds of companies to capitalize on full digital
growth and offer personalization, there is a need to close the accessibility gap. Companies are closing
this gap by transforming the physical product. This transformation is taking place in three stages: from
physical products to digital, from digital products to smart, and from smart products to personalized.

From physical to digital products

 On one hand, digitization is transforming a few physical products such as printed material into digital.
On the other hand, the ability to place sensors, intelligent logic, memory and long life battery power
inside many other physical products helps manufacturers to turn their physical products into digital
ones. The e-cigarette, substituting the burning tobacco cigarette, is one of the strongest examples of a
digitally transformed product. There are several other noticeable examples as well, such as HP Instant
Ink (HP Instant Ink acts like your own personal ink assistant. When you need ink, your printer
automatically lets HP know to send more). Other examples are OMSignals biometric sports clothing
(everyday comfortable apparel that captures medical-grade biometric data paired with revolutionary AI
algorithms), and AdhereTech smart pill bottles (use sensors & built-in cellular chip to passively send
real-time data).

From digital to smart products

A small logic or algorithm chip which empowers digital products to make their own decisions
transforms a digital product into a smart product. For example, a digital user manual provides the
correct tire pressure to the user, but when an algorithm is attached to this manual, it starts making tire
pressure adjustment recommendations based on current weather, or other operating conditions the
machine may be facing at that moment.
The world is now full of "Smart" objects: TVs, Remotes, Phones, Watches, Cars, Houses, Bottles,
Bandage, Books, Contracts, Traffic Lights, Bulbs, Pills, Cooking, Textiles, Sewers, Baggage and many
more. “Smartness" is not limited to physical products but also becoming ubiquitous in service and daily
life as well. For instance, smart robo-advisors in the banking and finance industry guide customers.
Smart-Reply and Smart-Categorization of emails are examples from daily life. This transformation will
continue to make human life easier.

From smart to personalized products

Internet products and mobile devices are better at personalization than traditional physical products.
It is not uncommon to see personalized news feeds on social media, personalized advertisements while
browsing the internet, and personalized recommendations while shopping online or watching a movie.
However, physical products have to wait for dynamic personalization until they are completely
transformed into digital and smart. The current state of transformation is only halfway complete. The
full transformation would happen when, like internet companies, physical product manufacturing
companies could monitor product performance remotely, and design and test the new products virtually.
The ability of manufacturers to access products directly while being in customers' hands will be the
key to achieve dynamic personalization. In other words getting the product proximity remotely is a
technical challenge today. Companies such as GE and Kone are exploring different ways to overcome
this obstacle.GE is examining "digital twins" in their industrial power plants and wind farms to control
and monitor the products. According to GE, digital twins are “the combination of data and intelligence
that represent the structure, context, and behavior of a physical system of any type, offering an
interface that allows one to understand the past and present operation, and make predictions about the
future.” The challenge gets bigger when it comes to personalization of publicly available products such
as an elevator. Kone is investigating a slightly different approach than GE and attempting to personalize
an elevator ride. Here is a glimpse of their setup.
These endeavors will personalize every aspect of a product apart from product shape itself, similar to
iPhones. For example, today every iPhone looks same physically however personalized internally.
However soon the market will demand a personalization on product shape as well, for instance, a pen
that looks different than others. 3D-printers soon will make personalized manufacturing a reality across
the manufacturing industry.
 Although the complete transformation of products and services will take some time, it will generate a
massive amount of personal and product performance data. This data will open endless data-based
businesses opportunities.

BUSINESS TRANSFORMATION

During the 21st-century entrepreneurs are experiencing multi-directional challenges. The forever
changing needs and wants of the consumers, and a rapid transition in the technology, are making
markets more volatile than ever before. Therefore, the lifecycle of an enterprise is getting shorter by the
day. Thus, it is important for enterprises to keep responding to the market situations in order to remain
open for a longer duration. Traditionally, every business has its own differentiation strategy. For
instance, Walmart differentiates based on cost. However, in the digital economy age, traditional
approaches are not sufficient alone; businesses need a digitally powered transformation as well. This
transformation will continue to help entrepreneurs in a variety of ways, such as reducing operating costs
and finding novel ways to look for new customers. There are multiple approaches to explain these
digitally powered transformations and the best is to see them individually. The following table
summarizes these.
 Business Model Prominent Examples

Traditional Digitally Powered

Brick and Mortar Online Amazon and Alibaba

Fixed Price Variable Price Airlines, Accommodation providers and Insurance companies

Dead Businesses Profit Making Microsoft Outlook

Unused Data New Revenue Streams LinkedIn, Zillow and Google’s Nest

Physical Internal Operations Virtual Internal Operations Robots enabled manufacturing, virtual teams and virtual
meetings

Anonymous Consumers Targeted Consumers Targeted advertisement and crowdsourcing

Single Value Solutions Multi Value Solutions Captcha and Duolingo

Manual Service and Automatic Service and Robotics Process Automation, Self-serving kiosk and Autonomous
Operations Operations Vehicle

Complex Business Processes Simplified Business Processes Blockchain

Table 1 Business Transformation

 From brick and mortar to online
This is one of the most visible transformations - the popularity of Amazon and Alibaba is self-evident.
This transformation is not only helping existing businesses, but also encouraging new entrepreneurs as
online startup costs are much less than brick and mortar businesses. The online business model is not
limited to retailers anymore. Indeed it is a profit-making option for other industries as well such as
banking and finance services. There are banks and credit unions such as Digital Federal Credit Union
(DCU) which run their business completely online in certain US states and cities. There are many DCU
customers who have not visited a physical branch in their lifetime.

From fixed to variable price model

Traditionally, products and services prices are set by manufacturers. These prices are expected to be
fixed for a specific geographical area. For example, an advertiser gets to pay a fixed cost for a billboard
advertisement even if it is never seen, and a consumer is forced to pay for full year/month auto
insurance even if the car is seldom driven. However, some leading companies are challenging this model
and adopting either a usage-based pricing or a supply and demand based pricing model.
Airlines and Internet-based logistics and transportation companies (such as Uber and Lyft) adopted a
supply and demand based pricing model much faster than others. This model is gradually getting rolled
out in other industries as well, and retailers are taking the lead. For instance, Amazon refreshes its
pricing list multiple times a day, and soon restaurants will follow this path.
The usage-based pricing model is starting to be used in the insurance industry. Companies like
Progressive and Aviva are offering discounts to drivers who allow them to monitor their driving via
smartphone apps and in-car devices, allowing the insurers to observe how safe a driver is. This is just
the beginning and soon insurance companies will take this data capture to a new level which will enable
them to charge premiums purely based on usage patterns.
The day is not far where every industry will be based on a variable pricing model and consumers will
enjoy this dynamic approach.

From dead businesses to profit-making

From time to time, new technology drives existing companies out of business. For example, in a way
photocopiers replaced typewriters, and then computers along with printers replaced them. During the
beginning of the twenty-first century, it seemed evident that collaboration tools such as Slack, Hipchat,
Basecamp, and Trello would replace emailing, but the power of artificial intelligence and cloud
technology not only brought emails back but also made them a profit-making business.
Cloud-based technologies are helping to integrate email services with other services such as
documents and worksheets and AI is brilliantly improving email functionality every day. For example, the
"Find a time" calendar feature intelligently avoids scheduling conflicts and suggests alternatives. The
"@meet" feature automatically schedules team meetings on Hangouts Meet and Google Calendar. The
"Smart Reply" feature auto generates replies for emails that only need a quick response. The "Priority
Inbox" classifies whether messages are important or not.
Thanks to Artificial Intelligence, email services are evolving into personal assistant software.

From unused data to new revenue streams

Historically, organizations left valuable data unused. This "dark data" with the rise of data science is
turning into valuable information and companies are finding new ways to earn direct revenue from it.
For examples, LinkedIn sells profile viewing data through premium membership, tire manufacturer Pirelli
collects performance data on trucks using sensors in tires and offers that data as an add-on-service for
fleet managers and insurers, and Google’s Nest collects real-time energy usage data from consumers
and sells these insights to utility companies or interested parties.
Sometimes companies use this dark data to earn indirect revenue also. For example, GE does not sell
data directly, and instead uses collected data to make industrial products such as turbines better and at
a lower cost.
The opportunities to convert unused data to new revenue streams are endless. These opportunities
are expanded further in the upcoming chapters during data monetization discussion.

From physical internal operations to virtual

The rise of voice translation tools and the ability to video conference are transforming physical
operations into virtual operations. It is not uncommon to see a geographically distributed team. The
"virtual" world has become part of professional life and virtual meetings with virtual teams are now
prevalent in business settings. There is no single soft-profession (white collar) that is not subject to
virtualization

From anonymous to targeted consumers

There were days when companies used to send unsolicited physical and electronic advertisements.
These shotgun approaches are transforming to data-based approaches as now companies have
shopping preference and lifestyle data ( which can be inferred from several other sources as well such
as social media and professional networks).Data knows more about people. Indeed it knows more than
they know about themselves - a famous example came when Target could figure out a daughter's
pregnancy before her father did and sent the girl related promotions.

From manual to automatic services and operations

Automation has been gradually replacing manual operations worldwide. On one hand, different kinds
of robots and self-serving kiosk machines are ubiquitous in retail, manufacturing, and other labor-
intensive industries. On the other hand, robotics process automation (RPA) and software robots are
helping to automate business processes. The following are examples of manual to automatic services
and operations.
1. In banking and finance, Vanguard, Fidelity, Schwab, and others are relying heavily on "robo-wealth"
advisors.
2. Self-service kiosks have been created for ATMs (automatic teller machines), soft drinks, online
order pickup, car rentals, library checkouts and many more.
3. In the construction industry, robot bricklayers (SAM is two to three times more productive than
human bricklayers) are replacing humans, and in the farming industry, fruit picking robots are
common.
4. In manufacturing there are even some fully automated factories operate with zero employees.
5. In the sporting goods, Adidas is one big name investing heavily in automated factories.
6. In real estate AlphaFlow launched its first automated investment fund for real estate loan.
7. In law, LISA the robot lawyer is getting a good response from the market.
8. Amy an AI based personal assistant possibly will replace human personal assistant.

In addition to these examples, Japan is deploying robots in a unique way. For instance, Tokyo Haneda
airport has robot helpers, who can direct flyers to security or to their gate. Japan even has a hotel
completely run by robots.
Moreover, this transformation is not limited to robots (physical and software) and self-service kiosks.
The next upcoming transformation is the autonomous vehicle. Google and Tesla are heavily investing in
this technology.

From complex to simplified business processes

Companies implement their business processes by using a wide variety of technology platforms such
ERPs, CRMs, workflows, and in some cases custom developed software. These technologies help in
speeding up their operations to some extent, specifically when a middle party such as bank
clearinghouse is involved. The middle parties', primary responsibility is to ensure rules and regulations
compliance which is time-consuming. For example, even today a bank to bank money transfer may take
3-5 business days, a title search while transacting a property is a lengthy process and may take months
even if the best technology is deployed, and an insurance claim settlement may take up to 45 business
days.
Therefore, there is a strong need to avoid the middleman, and the digital economy response is
Blockchain. This technology not only addresses middle party involvement, but also offers several other
advantages such as immutability, the ability to be distributed, and imperviousness to hacking. Currently,
this technology is in its adolescence. Financial services and insurance companies are early adopters of
this technology.
Although the digitally powered transformation can be beneficial to entrepreneurs and customers both,
this transformation is not required for a business to be profitable. Indeed, there are some successful
companies that have not adopted a digitally powered transformation strategy. For example, Huy Fong
Foods tries to avoid the digitally powered transformation and advertisements in general.

EMPLOYMENT TRANSFORMATION

Intelligent machines are endangering routine and repetitive professions such as lawyers (and legal
support staff), accountants, auditors, cashiers, drivers, fast food jobs, construction workers, assembly
line workers, toll booth operators, medical professionals and doctors, report writers, salespeople, and
many more such specialists. However, back in the 1980s, nobody ever predicted there would be a
position called a Social Media Manager, Website Developer, Mobile App Developer SEO Expert, Data
Scientist, Data Compliance Officer, Cloud Architect, Automated Driving Engineers, Virtual Assistant, IoT
Architect, Sustainability Expert Virtual Reality Professional, Social Media Influencer, Drone Pilot,
YouTuber, Chief Listening Officer ,Millennial Generational Expert, Chief Digital Officer, Chief Automation
Officer, Machine Learning Expert, Artificial Intelligence Trainer, or Computational Linguistics or could
have defined what those positions might be about. It is not only that the digital economy is creating
tech jobs but also it is producing non-technical jobs as well, for instance, internet defamation removal
lawyer.
It is difficult to calculate the specific impact the digital economy has on the job market, but it is clear
that the nature of work is transforming. This transformation demands a change in our education
system. The Digital economy employment requires a different kind of skillset, for example, there is a
strong indication that Statistics will surpass traditional subjects such Math, Calculus, and Science
ECONOMIC TRANSFORMATION

In the industrial age, a company’s business model did not change significantly over time. The way a
firm would create, deliver, and capture value could stay relatively constant for generations. The practice
of management was mostly focused on execution. If personnel and material could be moved efficiently,
and business could buy for a dollar and sell for two, it would be successful, sometimes enormously so.
Traditionally, those with the largest empire or those who controlled the most resources were considered
to be the most powerful and successful. However, today in the digital economy age, recent
developments in digital technologies have spawned a new breed of enterprise that dominates their
respective industries without actually “owning” tangible assets. Uber, Facebook, Airbnb, Skype, Alibaba,
SocietyOne, Netflix, Twitter, LinkedIn, eBay and Google are probably the best examples. The digital
economy is challenging every aspect of the traditional business, and all this is feasible because of an
effective workforce in the technology sector. The workforce remains the key driver even in the digital
economy.
"A strong economy begins with a strong, well-educated workforce" - Bill Owens

From traditional to gig economy

On one hand, workforce needs and demands are changing, specifically, when tech-dependent
millennial are joining the workforce with different expectations. This new workforce does not want to
commit to either a particular job or stable schedule, and the existing workforce cannot commit as they
have their own challenges such as recurring medical conditions. For example, 133 million Americans (45
% of the population) have at least one chronic disease. By 2025, chronic diseases will impact an
estimated 164 million Americans – nearly half (49%) of the population. Often this segment of the
workforce demands unstable work schedule, for example, some of them can work today for 4 hours but
not tomorrow. Kidney disease patients are one of the prominent examples of work commitment
uncertainty. Additionally, there is a small portion of the workforce that has few prospects of getting a
job, such as a mom whose primary priority is to take care of a young child. She may be willing to work
at the mall, local community or another local place. While this is true, her prospects to get a job is
limited as she cannot commit to a dedicated work schedule. A similar situation arises for a person who
needs to take care of elderly relatives. On the other hand, due to market conditions, some businesses
cannot offer a stable work schedule. Unstable scheduling is common in retail, finance, insurance, real
estate, repair services, personal services, entertainment, recreation, and agriculture. Today, about 17
percent of employees (irregular, on call, split and rotating shifts are factored together) have
unpredictable work schedules.
In today’s society, more employees and employers expect "Ultra Flexible Employment." The digital
economy not only understood this need but also considered how people can make more money by
sharing their existing assets such as car and house. TaskRabbit, Zaarly, Thumbtack, Airbnb, Snapgoods,
Dogvacay, Relayrides, Getaround, Liquid, Lyft, Uber, Lending Club, Fon, Sidecar, Poshmark,
Neighborhoods, and Upwork are some of the digital Economy platforms helping to find ultra-flexible
employments. Although many of these platforms support a variable price model as discussed in the
Business Transformation section, they are yet to reach the flexibility of the financial market platforms.
For instance, a financial platform identifies the most profitable opportunities, executes the transaction in
microseconds within the predefined boundaries, analyzes supply, demand, as well as pricing to tell
where the next wave of opportunities are coming and with extremely low overhead. One day the gig
economy will transact with the same flexibility as the financial market, and the disparity between
organizations at the top of the economy such as Wall Street (share trading), and the companies at the
bottom of the economy such as human resource agencies or employment firms will end.

From traditional to cryptocurrency

 The digital economy has opened up opportunities globally (as long as an internet enabled device is
available). For example, an online retailer from China can conduct business in the US market, a
European freelance consultant can offer consultancy in the Asia market and many more similar
examples. The only challenge with these kinds of global business opportunities is how to exchange
money faster and free of exchange rates, secure and accessible to all - there are approximately 2.2
billion individuals with access to the Internet or mobile phones who don’t currently have access to the
traditional exchange. The launch of cryptocurrency not only addressed this money exchange issue but
also opened up a plethora of opportunities in the financial sector.
Today, the number of Cryptocurrencies available over the internet is over 1384 and growing. A new
cryptocurrency can be created at any time. By market capitalization, Bitcoin is currently (January 6,
2018) the largest Blockchain network, followed by Ethereum, Ripple, Bitcoin Cash, Cardano, and
Litecoin. These digital currencies are ready to replace traditional currencies and the credit card business.
Cryptocurrencies will be the foundation of true globalization.

WORLD TRANSFORMATION

All previously discussed transformations (technology, products, business, employment, and economy)
make the world a better place to live. This section focuses on two transformations: how silo gatherings
transformed to social media, and how a disconnected world transformed into a connected world.

From silo gatherings to social media

Gone are the days where people used to have small gatherings in the evenings to feel connected to
each other and to share their updates with friends and families. The number of social media users is
more than enough to explain the power and influence of this transformation.
Platform Name Number of Users

Facebook 2,047,000,000

YouTube 1,500,000,000

WhatsApp 1,200,000,000

Facebook Messenger 1,200,000,000

WeChat 938,000,000

QQ 861,000,000

Instagram 700,000,000

QZone 638,000,000

Tumblr 357,000,000

Twitter 328,000,000

Sina Weibo 313,000,000

Baidu Tieba 300,000,000

Skype 300,000,000

Viber 260,000,000

Snapchat 255,000,000

Line 214,000,000

Pinterest 175,000,000

Table 2 Number of Social Media Users

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