Ordering a pizza, watching a Netflix series, and subscribing to a newsletter are possible through the work of various players, who create solutions and new economic patterns that are shaping the digital world. In this chapter, we will look beneath the surface to understand how businesses are structured to provide services with ever-increasing speed and personalization.
Identify the Big Players in the Digital World
GAFAM: The Big Five
Do you know who GAFAM is?
G = Google
A = Apple
F = Facebook
A = Amazon
M = Microsoft
This acronym refers to the five tech giants, companies that emerged in Silicon Valley, California, in the early 00s.
MANGAM? MANATAM?
What started as small tech companies founded by young entrepreneurs have become megastructures. Over time, they have completely changed traditional multinational corporations’ established rules of business. Today, the GAFAM companies make up the third-highest GDP in the world.
The New Tech Giants
The tidal wave created by GAFAM helped blaze the trail for other new players. For example, Google made it possible for Netflix to emerge. Without the tech giants, none of these new online services would exist.
NATU | BATX |
These are U.S. companies operating in different sectors than GAFAM.
| This abbreviation refers to the major Chinese tech giants.
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What sets them apart is their strategy. Unlike the GAFAM companies, which invented completely new tools (a search engine, a social network, a smartphone, etc.), the NATU companies seek to disrupt already-existing sectors by radically changing their structures, business models, and customer experience. | Although some names may be unfamiliar, they are true tech giants! These companies emerged in the 2010s and have near-monopolies in their sectors in Asia and especially in China, where the GAFAM companies are almost nonexistent thanks to a tightly controlled digital economy. |
What do you mean by “disrupt”? 🤨
You’ve definitely heard this word before—especially in the news media. In technology, being disruptive means:
“Completely changing a product or market in a way that redefines the way consumers, businesses and industries operate.”
Start-ups and Unicorns
Despite the unfortunate lack of European “tech giants,” many experts point to the growing number of European start-ups that have become “unicorns.”
What is a start-up? 🧐
The most concise definition of a start-up is a company that is exploring in a new market, where it's difficult to assess risks.
In other words, a start-up is testing out its business model and market, unlike a typical business, which refines its business model to draw maximum profits, cover costs, and provide a return for its shareholders.
Then what’s a unicorn? 🤓
In 2022, the term unicorn means a privately-owned start-up tech company valued at over $1 billion.
Identify the Major Digital Breakthroughs
“In the new world, it is not the big fish that eats the small fish, it's the fast fish that eats the slow fish.” Klaus Schwab
Klaus Schwab, the founder of the World Economic Forum, said this in 2016 to describe the profound transformation we are living through—even pre-pandemic.
Our world is changing rapidly, becoming faster, more global, and more interconnected. VUCA is a term often used to describe this.
VUCA stands for:
Volatile: Things change very quickly, and businesses need to adapt constantly.
Uncertain: We don’t know what the future will bring, and it’s difficult to see ahead in the long term.
Complex: We receive so much information. Threats (or competition) can come from anywhere, making it difficult to analyze situations and make decisions.
Ambiguous: There’s no pre-established blueprint (situations are new and unknown), and the cause-and-effect is unclear. It’s becoming harder to interpret a situation.
Why has the world become so unstable?
The causes are like the problem: interconnected and global. One good indicator to measure humanity’s change is how quickly new technologies are adopted.
Thanks to digital technology and the internet, innovations can reach the entire planet in one click!
There are two essential qualities you’ll need to navigate the VUCA world:
Agility – The ability to adapt quickly.
The ability to innovate – Both in scope (large-scale innovation) and speed (fast-paced innovation).
This applies to individuals and businesses. All the old players have had to transform themselves completely to avoid being left behind. Now you can see why (and how) new companies like GAFAM could replace multinational conglomerates in record time!
“Adapt or die”: Many companies have experienced this. While Kodak dropped the ball on digital adoption by refusing to believe film and paper would end, Lego was able to reinvent itself by learning from its users.
We’ll revisit the importance of listening to your users in the second part of the course.
These changes to our society, economy, and daily lives also transform how we do things. We now have more, better, and faster access to choices.
Let’s consider access to knowledge: all the libraries in the world are now one, all available a click away.
As a result, businesses have been developing new models that enable them to take advantage of new consumer behaviors and to become more agile.
Exchange Models
Digitalization has created new ways for accessing a product or service. These are called exchange models.
For example:
The subscription model: When you pay for access rather than for ownership, such as with Netflix, Spotify, or grocery delivery services.
The data-based targeted advertising model: Facebook and Google use this model. These services profit by monetizing access to their customers’ data, allowing for precisely targeted advertising. You know the saying: “If something is free, you are the product.”
A marketplace is a platform that connects buyers and sellers on the internet, without itself having an inventory. For example, Amazon does this (for a large portion of its business), as well as Uber and Airbnb. Those companies are different because they allow individuals or independent businesses to sell their products and services directly, without going through intermediaries. This is known as disintermediation.
Marketplace: a place where sellers and buyers can connect Finally, the freemium model offers free access to basic services, but users have to pay more for advanced or ad-free features (premium).
The expansion of these models explains how tech companies and start-ups can remain dynamic and innovative while deploying their services rapidly and at a low cost—that’s agility!
Understand What These Changes Mean for Your Work
As you can imagine, all this disruption has a very substantial impact on your professional life.
One of the main concerns is the automation of tasks, with the advent of artificial intelligence (AI).
Experts agree that the impact of digital changes on the workplace has been huge. In 2021, a study by the OECD analyzed the impact of automation on the future of work. According to that study, 14% of jobs will likely undergo significant automation in the next two decades.
What do you mean by job automation? 🤨
First, it means the disappearance of jobs involving repetitive tasks that a machine can do, such as supermarket cashiers or bank tellers.
Second, it refers to the transformation of automatable tasks. For example, an attorney might automate researching case law or drafting standardized legal documents.
This transformation can sometimes be viewed as negative—the idea of replacing humans with robots. However, in most professions, automation can save time by letting machines do the most time-consuming tasks, leaving workers with more energy to devote to higher-value ones. Don’t forget how demanding some tasks can be. Letting machines handle those difficult or dangerous jobs can help keep workers safe and healthy.
There are many more positives to these changes. When a machine replaces humans on certain tasks, someone must operate that machine. For instance, an AI tool that automatically processes invoices can’t replace an accountant!
With all these fundamental changes in the professional world, workers need to learn to adapt. That’s why continuous learning and the development of soft skills are crucial. Luckily for you, that’s where we’ll begin in the second part of this course!
Let’s Recap!
Since the 1990s, GAFAM (Google, Apple, Facebook, Amazon, and Microsoft) have become tech giants, permanently changing society and the economy globally.
Other new tech companies came along in their wake (NATU/BATX/start-ups/unicorns), disrupting businesses in all sectors.
The world has become VUCA—volatile, uncertain, complex, and ambiguous.
You’ll need two essential qualities to navigate the VUCA world:
Agility – the ability to adapt quickly
Innovation – the ability to innovate more and faster
Now you know how the digital revolution has transformed business and work in general. In the next part of this course, you’ll discover the essential digital tools and methods shaping the modern workplace. But not so fast! Test what you’ve learned in this part of the course by taking a quiz. Good luck!
