The Digital Age:So What?

Dr. Roberto Gallardo

Assistant Director / C&RE Specialist

Purdue Center for Regional Development

@robertoge

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Reaching 100 million users worldwide

• Telephone 75 years

• Mobile phone 16 years

• World Wide Web 7 years

• Facebook 4 years

• Instagram 2 years

• Pokemon Go 1 month

Source: Twitter user @ValaAfshar; ITU; Statista; BCG Research

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Source: World Economic Forum

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The Digital Economy

32 millionmore employed in 2016 vs. 2010

$6.6 trillionsize by 2020 among G-20 countries

$16 trillioncontribution of AI to world

economy by 2030 Digital Dividereal threat to community

economic development

Source: Boston Consulting Group; Cisco; McKinsey Global Institute; World Economic Forum

$19 trillionIoT global opportunity

over the next decade

$11 trillionIoT impact per year

starting in 2025

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Digital Potential

• Dozens of indicators

• Building digital assets

• Expanding digital usage

• Creating digital workforce

Source: McKinsey Global Institute (2015)

18%

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Exponential?

Source: Wikipedia

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Exponential?

1992 2014

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Digitization?

• Internet of Everything (IoE)

• “Physical world can now be digitized, monitored, measured, and optimized.” – Project Syndicate

• At least 50 billion devices will be connected by 2020 – Cisco (2014)

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Combinatorial?

• Technology lag

• Artificial Intelligence

• Deep learning algorithms

• Zero to expert in 8 hours

• X-rays & CT scans

• Skin cancer

• Electrify Cognify

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Disruption?

• Digital mindset

• Exploit digital platforms

• Interact digitally with consumers/residents

• Mostly EVERYONE has the tools to market, test, refine, and eventually disrupt an industry

Source: McQuivey, J. (2013). Digital Disruption – Unleashing the Next Wave of Innovation

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Disruption?

“Investor concern over the threat of new technologies is overstated.”

Source: Twitter user @ValaAfshar

Blockbuster analyst report, 1999

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Disruption?

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1st Industrial Revolution

Communication Energy Transportation

Source: Rifkin, J. (2015). The Zero Marginal Cost Society

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2nd Industrial Revolution

Communication Energy Transportation

Source: Rifkin, J. (2015). The Zero Marginal Cost Society

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3rd Industrial Revolution

Communication Energy Transportation

Source: Rifkin, J. (2015). The Zero Marginal Cost Society

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Innovation

“I have not failed. I have just found 10,000 things that do not work.” – Thomas Edison

“The secret to creativity is knowing how to hide your sources.” – Albert Einstein

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Economic landscape changing

• Geographic proximity

• The bigger, the better

• Tied to office, factory

• Mass production

Industrial Economy Digital Economy

• Decentralization

• Economic gardening

• Work from anywhere

• Customizable manufacturing

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600,000

rooms

Airbnb Hilton

Source: World Economic Forum

4 years 93 years

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Most valuable companies 2006-2016

Source: World Economic Forum

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Digital Globalization

Source: McKinsey Global Institute. Digital Globalization: The New Era of Global Flows. March 2016

15 years old1.

Larger impact on GDP

than 100s year old goods trade2.

Includes developing countries,

small companies, start-ups, &

billions of individuals

3.

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Digital Age makes possible …

• Quality education (badges)

• Crowdfunding / crowdsourcing

• Search/apply for jobs

• Telecommuting / telework

• Telehealth & telemedicine

• Enhance downtowns & retail

• Digital civic engagement

• Precision Agriculture

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Holoportation

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Remember this?

• Weight 2.4 lbs

• Talk time: 30 minutes

• Charge time: 10 hours

• Cost: $3,999

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Digital Age will make possible …

• Driverless cars

• Artificial Intelligence

• 3D Holograms

• 3D Virtual / augmented reality

• Blockchain

• Quantum computing

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Remember that in the digital age …

• Levels the playing field between urban and rural

• Size does not matter

• Eliminates “middle of nowhere”

• When most people can work anywhere, where will they choose to live and work?

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P.E.N.C.I.L.

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Not all is great …

• Not a silver-bullet

• Chips & batteries

• Cyberattacks

• Net Neutrality

• Big Brother

• Profitable Privacy

• Inequality

• 21st Century Institutions

• Digital Divide

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Digital Readiness

14%

5%

33%

31%

17%

0%

5%

10%

15%

20%

25%

30%

35%

Unprepared Traditional Learners Reluctant Cautious Clickers Digitally Ready

Source: Pew Research Internet

52%

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Computer Skills of Adult Population

26%

14%

29%

26%

5%

0%

5%

10%

15%

20%

25%

30%

35%

Can't use computers Below Level 1 (terrible) Level 1 (poor) Level 2 (medium) Level 3 (strong)

Source: OECD; Nielsen Norman Group

69%

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Digital Divide Index (DDI)

• DDI = Infrastructure/Adoption + Socioeconomic

• Ranges from 0 to 100; higher score, higher divide

• http://pcrd.purdue.edu/ddi

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1.

2.

3.

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$952,868,146

$400,322,159 $552,545,987

$4,764,340,731

$2,001,610,793

$2,762,729,937

$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

Minnesota Urban Rural

Broadband: Missed Economic Opportunities

20% 100%

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Source: Purdue Center for Regional Development

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19.3

26.7

12.6

47.8

65.6

81.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

U.S. Minnesota Lowest 2nd Lowest 2nd Highest Highest

2010 Percent Rural Population: U.S., Minnesota, & DDI Quartiles

Source: Purdue Center for Regional Development

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4.0

3.4

5.0

0.3-0.6

-1.9

1.9

2.4

3.7

0.0 -0.1

-2.6-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

U.S. Minnesota Lowest 2nd Lowest 2nd Highest Highest

2010-2015 Percent Change: U.S. , Minnesota, & DDI Quartiles

Population Labor Force

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8.4

3.5

5.7

-1.6

-1.6

-2.7

3.4

1.9

3.3

-1.3-1.8

-1.2

10.0

4.1

6.6

-1.7 -1.6

-3.3-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

U.S. Minnesota Lowest 2nd Lowest 2nd Highest Highest

2010-2015 Percent Change: U.S. , Minnesota by DDI Quartiles

Establishments Paid Emp. Nonemployers

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7.2

0.91.9

-4.01.3

-20.5

21.1

12.4 12.6

16.3

7.7

-5.3

-25.0

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

U.S. Minnesota Lowest 2nd Lowest 2nd Highest Highest

2010-2015 Percent Change: U.S. , Minnesota by DDI Quartiles

DE Establishments DE Jobs

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Source: Purdue Center for Regional Development; County Business Patterns; Census Nonemployers Dataset

57.552.7 52.5

55.6 54.5

47.5

27.233.3 34.1

24.9 28.439.4

9.4 8.9 8.3

12.914.0

10.1

5.9 5.1 5.2 6.53.1 3.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

U.S. Minnesota Lowest 2nd Lowest 2nd Highest Highest

2015 Digital Economy Establishments by Type

Nonemployers Micro (1-4 Emp.) Small (5-19 Emp.) Large (20+ Emp.)

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Change is not easy

“Doubt is an

uncomfortable

condition, but certainty

is a ridiculous one.”

Voltaire

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Do I need faster Internet?

Do I need electricity when I already use candles?

… is like asking …

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Changing workforce

By 2025, 1 billion digital natives will join the workforce

Source: Deloitte

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Percent Agriculture Jobs

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Percent Manufacturing Jobs

Source: Bureau of Labor Statistics; Ford (2015)

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Source: ZeroHedge

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Jobs Vs. Productivity

Source: Brookings Institution

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Bipolar Economy

Source: Harvard Business Review (2017)

Traditional Autonomous

Food

Shelter

Health care

Clothing

Transportation

Energy

Robots

Artificial Intelligence

Big Data

High-speed Internet

Cost

Increasing

Wages/Employment

Decreasing

Middle

Class

Service

Sector

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Community Development Model

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In summary …

• Transforming landscape

• Digital divide: largest threat

• Collaboration

• Change in mindset

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“Dream bigger than

your circumstances”

Source: Twitter user @kengarex