In Digital Metamorphosis by Andreas Mueller at HR Week 2019

In Digital Metamorphosis
Prof. Dr. Andreas Mueller
HR Week Belgrade
3rd December 2019

2
1
3
4
Development in Waves
Three Steps of Digitalization
What HR can do
Digital Society

© 2019, Prof. Dr. Andreas Mueller, Kempten U
C
H
A
N
G
E
A New Age
So ietal
Hippie movement
•
Age of Aquarius
•
The dawn of a New Age:
love, peace and harmony

The Digital Age
Hunter-gatherers Settled Agrarian Society Industrial Society Information Society
Image: Alvin Toffler; Flickr
Toffler 1980
Self-sufficient pro-sumer,
who produces many
things on his own
Family & Friends
Neighborhood
Organizations, that
„consist of small
components linked
together in temporary
configurations“
(Toffler 1980, p. 263)

Some General Purpose Technologies
Lipsey et al 2005, Jovanovic / Rousseau 2005
3 defining characteristics for GPTs
1. Pervasiveness — the GPT should spread to most sectors
2. Improvement — the GPT should get better over time
and hence should keep lowering the costs of its users
3. Innovation spawning — the GPT should make it easier to
invent and produce new products or processes
Three-Masted Sailing Ship
Printing
Steam Engine
Railways
Electricity
Computer
Water Wheel
Internet

3 economic paradigms for major economic disruptions based on 3 defining
technologies:
• new communication technologies (to manage economic activity)
• new sources of energy (to power economic activity)
• new modes of mobility (to move economic activity)
Rifkin‘s Approach
Image: Jeremy Rifkin, Heinrich Böll Stiftung 2009
Rifkin 2011

Rifkin’s 3 Industrial Revolutions
• Energy: cheap coal
• Communication: Steam-powered
printing
• Mobility: steam engines,
locomotives on national rail systems
• Energy: cheap Texas oil
• Communication: telephone, radio,
TV
• Mobility: combustion engines,
vehicles on national road systems
• Communication: Internet, 5G
• Energy: Renewables, internet-
based energy management
• Mobility: internet-based
automated transportation
UK
19th century
US
20th century
continentalized
21th century
1st Industrial Revolution
2nd Industrial Revolution
3rd Industrial Revolution
Rifkin 2011

Joseph Kitchin
3-4 years, inventory /
electoral
Clément Juglar
7-10 years, depreciation
/ fixed investment
Simon Kuznets swing
15-25 years,
infrastructural
investment
Nikolai Kondratieff
45-60 years,
technological
Immanuel Wallerstein
150-250 years,
hegemonial
Business Cycles
Kondratieff 1926, Schumpeter 1939, Wilenius/Kurki 2012
Increasinglengthofcycle

Technological Revolutions and Economy
THE HISTORICAL RECORD:
Bubble prosperities, recessions and golden ages
INSTALLATION PERIOD DEPLOYMENT PERIOD
Bubble collapse
recession
1771
The Industrial
Revolution
Britain
1829
Age of Steam
and Railways
Britain
1875
Age of Steel and
heavy Engineering
Britain / USA
Germany
1908
Age of Oil, Autos
and Mass
Production / USA
1971
The ICT
Revolution
USA
1st
2nd
3rd
4th
5th
No., date, revolution,
core country
TURNING
POINTBubble prosperity Maturity‘Golden Age’ prosperity
London funded global market
infrastructure build-up
(Argentina, Australia, USA)
Belle Époque (Europe)
‘Progressive Era’ (USA)
1890–95
Railway mania The Victorian Boom1848–50
Canal mania
Great
British leap1793–97
The roaring twenties
Autos, housing, radio,
aviation, electricity
Post-war
Golden age
Europe
1929–33
USA
1929–43
The equivalent historical period for the diffusion of the ICT revolution is the 1930s
Internet mania, Telecoms,
emerging markets
Global financial casino & housing
Global sustainable
knowledge society ‘golden age’?
2000-03
2008-
20??
Led by finance with unfettered markets Led by production guided by the State
Perez 2016

Transforming the Economy
Kauflin 2017
1917
1967
2017

Digitalization – the driving forces
Microsoft
(US-Digital Conglomerate)
Apple
Amazon
Alphabet
Berkshire Hathaway
(US-Finance Conglomerate)
Facebook
(US-Social Media)
Tencent
(CN-Digital Conglomerate)
Alibaba
(CN-Digital Conglomerate)
Visa
(US-Finance)
JPMorgan Chase
(US-Finance)
(ycharts 2019)

Top Global Companies
0
275
550
825
1100
2016 June 2016 Dec 2017 June 2017 Dec 2018 June 2018 Dec 2019 June 2019 Oct
210 222
345
493
479
375
432
399
189
218
356
441
476
355
439 435
322
340
436
516
562
376
551
508
346
404
419
489
464
499
521 509
475
532
629
727
775
728
751
838
338
356
466
564
825
736
929
859
517
618
749
869
910
749
911
1012
397
483
529
670
758
781
1028
1062
MicrosoQ Apple Amazon Alphabet Berkshire Facebook Alibaba Tencent
by Market Capitalization
ycharts 2019

„This Time is Different“?
From the Age of Steel, Electricity & Heavy
Engineering to the Age of Oil, Automotive
& Mass Production
From the Age of Oil, Automotive & Mass
Production to the Age of Information &
Telecommunications
0
1500
3000
4500
6000
2010 2012 2014 2016 2018 19Q3
4th TR
5th TR
80%
7 firms
20%
3 firms
79%
8 firms
21%
2 firms
The top 10 global firms by market cap between 2010 and 2019,
grouped by technological revolution (TR)
(Perez 2016, own figure)

1900 - can you spot …?
BBC 2018

1913 - can you spot …?
BBC 2018

Four Types of Innovation
potential
innovation
market-
generating
innovation
sustainable
innovation
efficiency
innovation
Christensen 2016, Ofoso 2019
Karl Benz’ first car Ford’s Model T
Toyota Camry cheap labor
manufacturing

Metamorphosis, Change and Reproduction
Exploit
Disrupting 
continuity
Success→ Explore Again
Explore
Bureaucratizing
innovation
LAB
FACTORY
LAB
Time →
Reproduction
Change
Metamorphosis

The unused chance
2. EVs – History
1899, Camille Jenatzy, Paris (First person surpasing 100km/h)
Electric Car – taxi fleet battery switching, Barcelona,1920
2. EVs – History
September 21th, 2019BAKU, Azerbaijan GEM ASIA
1899 Colu
Electric cars were appealing to some women who preferred the quieter
rides and the fact that electric cars started very easily — there was no
crank to push and pull like gasmobiles of the time had. Additionally, there
was no smoke, there were no smelly fumes, and there was no gassing up.
story
1899 Columbia Electric Car
1895, Thomas Edison with Edison Baker
SOLUTIONS FOR A SUSTAINABLE ENVIRONMENT
ctric Car
1895, Thomas Edison with Edison Baker
19
1895 Edison Baker
1899 Columbia Electric Car
e-Car for women: quiet & easy to use
1920 Barcelona Electric Car - taxi fleet
Ramirez 2019

How about the butterfly?
Caterpillars are eating an
enormous amount of
plants. They are moulting
when they can not breath
anymore (at ca. 5 times
their latest weight). Only
after 4-5 moultings they
start to build their
cocoon.

Three steps of Digitalization
Illustration according to Zulian & Bouza (2018)
DIGITALIZATION
DIGITIZATION
DIGITAL
TRANSFORMATION

Summary - Three steps of Digitalization
Digital Transformation
profound transformation of business
activities, competencies, and
business models to fully leverage the
opportunities of digital technologies
Digitization
creating a digital
representation of
physical objects
Digitalization
enabling, improving,
transforming business
processes by leveraging
digital technologies
Illustration according to Zulian & Bouza (2018)
DIGITALIZATION
DIGITIZATION
DIGITAL
TRANSFORMATION

Digitization Digitalization
Digital
Transformation
Content-Based
Business
Pressed CD iPod iTunes Store
Community-Based
Business
Online blackboard Chatrooms Facebook
Online Store Online website
Online catalogue
with Checkout
Personalization,
Affinity Offers
Matchmaking Online Ads
Online catalogue
with Checkout
Auction
Business Promotion Online website
Reservation and
Contact Details
tripadvisor
Five typical digital business models
Business models from Allen (2019)

Drivers of Digitalization
Economical sphere
Technology
sphere People sphere
Digitalization
Agile / Stabile, Individualized
Consumer, Platforms /
Navigators, Business Model
Generation, …
Sensors,
Interfaces,
Algorithms,
FabLab, Robotics,
Blockchain, …
Social Media,
Nomads, Avatars,,
Measurability,
Privacy, Creativity,
…
Industry 4.0
Personalization
Artificial
Intelligence

Digitalization
Where is it happening?
Will it cost our jobs?
How long does it take?

Digitalization – where is it happening?
IMD „Digital Vortex“ 2015, 2017, 2019
2015
1. Technology
2. Media & Entertainment
3. Retail
4. Financial Services
5. Telecommunications
2017
2. Tech Products & Services
3. Telecoms
5. Retail
2019
2. Tech Products & Services
3. Telecommunications
4. Retail

Will it kill our jobs?
Transportation and Material Moving
Production
Installation, Maintenance, and Repair
Construction and Extraction
Farming, Fishing, and Forestry
Ofﬁce and Administrative Support
Sales and Related
Service
Healthcare Practitioners and Technical
Education, Legal, Community Service, Arts, and Media
Computer, Engineering, and Science
Management, Business, and Financial
Employment
Probability of Computerisation
47% Employment
←−−− High −−−→
19% Employment
←−−− Medium −−−→
33% Employment
←−−− Low −−−→
0 0.2 0.4 0.6 0.8 1
0M
100M
200M
300M
400M
FIGURE III. The distribution of BLS 2010 occupational employment over the probability of
computerisation, along with the share in low, medium and high probability categories. Note
that the total area under all curves is equal to total US employment.
Frey/Osborne 2013
47% of (US) employment are
at high risk to be automated
over 1-2 decades
Further 19% of (US)
employees’ occupation
automation depend on
technological progress in
• Perception/Manipulation
• Creative Intelligence
• Social Intelligence

Digitalization and Occupations
Transportaion and material moving occupaions
7 %
Producion occupaions
6 %
Installaion, maintenance, and repair occupaions
Construcion and extracion occupaions
Farming, fishing, and forestry occupaions
Office and administraive support occupaions
14 %
Sales and related occupaions
10 %
Personal care and service occupaions
Building and grounds cleaning and maintenance occupaions
Food preparaion and serving related occupaions
8 %
Protecive service occupaions
Healthcare support occupaions
Healthcare praciioners and technical occupaions
6 %
Arts, design, entertainment, sports, and media occupaions
Educaion, training, and library occupaions
6 %
Legal occupaions
Community and social service occupaions
Life, physical, and social science occupaions
Architecture and engineering occupaions
Computer and mathemaBcal occupaBons
3 %
Business and financial operaions occupaions
5 %
Management occupaions
6 %
total, all US
occupations:
161m
US Bureau of Labor Statistics 2019

How long does it take?
After 4 years of a digital transformation, established
companies make ca 5% of their revenues from new digital
value propositions.
Ross et al 2019, axel springer 2016, travelex 2019
Axel Springer started its digital transformation in 2001
with a loss of 200mio €. In 2006, digital income amounted
1% of the group’s income, while 2018 revenues have a
portion of 71% from digital businesses (and 84% EBITDA).
Travelex projected its cultural change and digital
transformation initiative over 5 years, from 2014-2019. In
a first step it built out digital capabilities, started to build
new products from 2015 onwards, and launched
transformation initiatives on top of this.

Volkswagen We
We Share
e-Mobility
We Deliver
trunk as delivery
address
We Connect
personalised
mobile services
We Park
parking fees via
VW app
We Connect
Go
vehicle stats on
the go
We Experience
location based
recommendations

Enablers for Digital Transformation
Digital
Infrastructure
Bandwidth, ERP, CRM, ..
Investments &
Access to
Finance
R&D, Venture capital, Tax, ..
Supply &
Demand of
Digital Skills
ICT access, knowledge, creativity, ..
e-Leadership
ICT upskilling, tertiary education, …
Entrepreneurial
Culture
early-stage activity, societal support, ..
EU Digital Transformation Scoreboard 2018
enabling conditions indices.
The Digital Transformation Enablers’ Index (DTEI) provides a ranking for
Member States based on the assumption that infrastructure, access to
finance, and the demand and supply of skills are the most important
factors driving digital transformation (with a respective weight of 20%, 30%,
and 30% of the DTEI), whilst the indices on the environmental enabling
conditions (e-leadership and entrepreneurial culture) are assumed to have a
lower weighting in the DTEI (10% each). The weights of these dimensions
have been preserved under both DTSs.
Source: Digita
Figure 8
transform
States w
environm
Finland
compare
Luxembo
top 5 M
western
Furtherm
positions
Czech Re
note tha
condition
Europe.
Overall E
The over
which illu
graph sh
culture h
followed
finance. U
Source: Digital Transformation Scoreboard 2018
Figure 8.4: EU Digital Transformation Enablers’ Index
22,2
25,2
30,7
32,0
33,8
34,6
36,0
39,9
40,0
40,6
42,7
44,9
48,7
49,2
49,7
50,5
56,4
58,5
59,9
59,9
61,6
62,1
67,7
67,7
72,3
73,7
77,7
79,0
81,6
0 20 40 60 80 100
Romania
Latvia
Croatia
Poland
Bulgaria
Slovakia
Greece
Hungary
Slovenia
Italy
Lithuania
Cyprus
Portugal
European Union (28 countries)
Estonia
Czech Republic
Spain
Malta
Austria
Germany
France
United Kingdom
Ireland
Denmark
Luxembourg
Belgium
Sweden
Finland
Netherlands
E

Digital Leadership
Agile Manifesto (2001)
We are uncovering better ways of developing software by
doing it and helping others do it. Through this work we have
come to value:
•Individuals and interactions over processes and tools
•Working software over comprehensive documentation
•Customer collaboration over contract negotiation
•Responding to change over following a plan
That is, while there is value in the items on the right, we
value the items on the left more.
Know your
people
Make
experiments
Understand
your clients
Adapt quickly

Know Your People
flowspace
I know I grow I flow

Understand your Clients / Make Experiments

Yet is L&D itself ready for digitalization?

Digital Competencies in L&D (2019)
digitalizaion is a top priority for L&D leaders
L&D has a clear digitalizaion strategy
L&D has a clear concept how to develop
digital competencies for employees
0 25 50 75 100
2
3
5
9
9
10
15
19
22
17
17
22
22
18
16
21
19
18
14
15
7
clear digitalizaion agenda exists
there is a clear idea,
how digitalizaion inﬂuences the business
there is a clear idea about competences
that employees need to handle digitalizaion
0 25 50 75 100
5
7
7
8
19
19
25
29
21
18
13
16
22
18
9
16
10
16
6
4
12
1 - not at all 2 3 4 - neutral 5 6 7 - very much
Corporate Digitalization:
• 37% have no clear digitalization strategy
• 44% don’t know digital competencies
Digitalization of L&D:
• 52% have no clear digitalization strategy
• 57% don’t know how to develop
digital competencies
(Seufert et al 2019)
results of a 2019 study on German speaking L&D, 56% experts / 44% leaders, 67% female / 33%male, 70% with 1000+ employees

Digitalization Knowhow in L&D (2019)
Big Data & Analyics
AR/VR
AI
Roboics
0 25 50 75 100
1
2
2
6
4
10
10
21
29
28
31
20
16
16
14
14
18
16
13
14
12
12
12
24
19
16
18
L&D Knowhow
• 43% Big Data & Analytics
• 38% AR/VR
• 35% AI
Importance for L&D
• 40% Big Data & Analytics
• 35% AR/VR
• 31% AI
Big Data & Analyics
AR/VR
AI
Roboics
0 25 50 75 100
4
3
6
7
12
9
13
12
13
19
16
21
18
21
16
16
13
12
11
13
14
12
13
12
26
24
25
19

Digitalization Knowhow in L&D (2019)
Online Assessments
Learning Experience Plaqorms
Analyics
Automated Content Creaion
Adapive Learning Systems
Robot Recruiing
Algorithmic Curaion
0 25 50 75 100
1
1
1
2
5
3
4
3
7
5
10
6
16
19
16
18
24
23
26
24
31
18
15
20
21
14
18
14
12
12
10
10
12
10
8
13
10
12
11
11
12
8
37
37
28
23
26
17
16
L&D Knowhow
• 54% Online Assessments
• 43% LXP
• 37% Analytics
What is in corporate use
• 38% Online Assessments
• 33% LXP
• 31% Auto Content Creation
Online Assessments
Learning Experience Plaqorms
Automated Content Creaion
Analyics
Adapive Learning Systems
Algorithmic Curaion
Robot Recruiing
0 25 50 75 100
1
1
2
4
3
4
6
4
4
8
7
11
10
11
8
11
12
18
17
19
21
12
16
13
10
14
13
11
11
13
12
16
10
12
13
12
11
12
11
11
11
11
52
44
41
34
34
31
27

How the Business views L&DDOES YOUR LEARNING WORK FOR YOUR WORKFORCE?
NPS
OVERALL PROMOTERDETRACTOR
REGION
SENIORITY
ROLE
North America
South America
Asia Pacific
Europe
C-suite Executives
Function/Business Leaders
Team Managers
Individual Workers
Human Resources
General Management
Sales
Finance
Engineering and R&D
Information Technology
Operations or Product
Logistics and Procurement
Marketing
-100 -50 0 50 100
-100 -50 0 50 100
-100 -50 0 50 100
-25
-100 -50 0 50 100
-32
-17
-13
-33
-33
-37
-40
-45
3
-11
-8
-25
-32
-21
-21
-21
-22
degreed / HBP 2019
results of a 2019 study on 772 executives, managers and employees globally (Harvard Business Publishing)
DOESYOURLEARNINGWORKFORYOURWORKFORCE?
NPS
OVERALLPROMOTERDETRACTOR
REGION
SENIORITY
ROLE
NorthAmerica
SouthAmerica
AsiaPacific
Europe
C-suiteExecutives
Function/BusinessLeaders
TeamManagers
IndividualWorkers
HumanResources
GeneralManagement
Sales
Finance
EngineeringandR&D
InformationTechnology
OperationsorProduct
LogisticsandProcurement
Marketing
-100-50050100
-100-50050100
-100-50050100
-25
-100-50050100
-32
-17
-13
-33
-33
-37
-40
-45
3
-11
-8
-25
-32
-21
-21
-21
-22

Some HRTech
CBInsights 2016

Some EdTech
CBInsights 2017

Digital Competence Framework for Citizens
21COMPETENCES
5AREAS
Information and data literacy
Bro formation
and digital content
Evaluating data, information and
digital content
Managing data, information and digital content
Communication and collaboration
Interacting through digital technologies
Sharing through digital technologies
Safety
Digital content creation
Communication
and collaboration
Problem solvingInformation and
data literacy
DIGCOMP 2.0
THE DIGITAL COMPETENCE FRAMEWORK FOR CITIZENS
THE COMPETENCES
21COMPETENCES
5AREAS
Bro formation
and digital content
digital content
Engaging in citizenship through digital technologies
Collaborating through digital technologies
Netiquette
Managing digital identity
Developing digital content
Integrating and re-elaboraring digital content
Copyright and licenses
Programming
Safety
Protecting devices
Protecting personal data and privacy
Protecting health and well-being
Safety
Communication
and collaboration
data literacy
Netiquette
Programming
Safety
Protecting devices
Protecting the environment
Problem solving
Solving technical problems
Identifying needs and technological responses
Creatively using digital technologies
Identifying digital competence gaps
Netiquette
Programming
Safety
Protecting devices
Problem solving
Netiquette
Programming
Safety
Protecting devices
Problem solving
21COMPETENCES
5AREAS
Bro formation
and digital content
digital content
Safety
Communication
and collaboration
data literacy
DIGCOMP 2.0
THE DIGITAL COMPETENCE FRAMEWORK FOR CITIZENS
THE COMPETENCES
EU 2017

DigCompEdu
general reference frame for developers of Digital
Competence models, i.e. Member States, regional
governments, national and regional agencies,
educational organisations themselves, and public or
private professional training providers.
Areas 2 to 5 form the pedagogic core of the
framework. They detail the competences educators
need to possess to foster effective, inclusive and
innovative learning strategies, using digital tools.
Figure 1: Overview of the DigCompEdu framework
Caena/Redecker 2019
Newcomer Explorer Integrator Expert Leader Pioneer

DigCompOrg
Figure 3: Key elements and sub-elements of DigCompOrg
EU 2015

Managing the Transition
Bridges 2017

Globalization
Globalization
„The era of the
nation-state is over.“
(Giddens)
Risk Society
Realizing man-made
manufactured risks leads
to a reflexive „second
modernity“ (Beck)
Tradition
Fundamentalism can be a
response to
detraditionalising culture
– so justify new traditions
Family
„Shell institution“ -
same name, but basic
character changed
Democracy
Democratising democracy
via transparency,
participation, civic culture
Giddens 1999

Network Society „A network society is a society
whose social structure is made of
networks powered by
microelectronics-based
information and communication
technologies.“
-- Manuel Castells, 2004
Castells 2004

Network Society …
Castells 2004
F L e x I B i l i T y !
Can we deal with it?
… allows minorities to form own networks
… allows new business models that are
based on minority interests
… allows more diversity
… possesses a different concept of time
and space that is not geographically bounded
… space of flows (virtual global space) vs.
space of contiguity (local physical spaces)
…distinguishes embodied time from a
timeless time

CHANGE
“some things change but other
things remain the same”
TRANSFORMATION
“an evolutionary path” from A to B
METAMORPHOSIS
“major change into something
different, which implies a complete
transformation into a different type,
a different reality, a different mode of
being in the world, seeing the world
and doing politics.”
The World in Metamorphosis
Ulrich Beck
-
The Metamorphosis of the World
Beck 2016

Cambridge
Analytica
Taming the Digital „Wild West“
Data rich get
richer
D a r k n e t
PRISM
Dave
Snowden
Fake
News
Social
Scoring

Society as a social system with societal subsystems, medium (what?),
function (why?) and binary code:
Economy – money – distribution – payment, non-payment
Politics – power – limitation – government, opposition
Science – truth – verification – true, untrue
Health – illness – restoration – ill, healthy
Mass Media – medium – multiplication – informative, non-informative
…
Social Systems
Luhmann 1998
Image: Luhmann; Wikimedia
It is a responsibility of the network society to discuss how we will react on irritations!

• Is computer code raw material? Or
is it protected speech? How should
it be legislated?
• Is the singularity, the super-
intelligence real? Should we be
worried about it?
• How do we combat digital
monopolies?
• Do we allow predictive health
analyses together with recruiting or
insurances?
• How do we keep digital freedom in
a surveillance state of ubiquituous
sensors?
• Where is a limit of integrating smart
devices into human bodies?
• How do we want robots to think?
• Should an autonomous car who
cannot stop kill the child or the
grandfather if it had only this
choice?
• ...
Digital Ethics
Good? Bad?
Paradoxon,
Question

Thank You
andreas.mueller@hs-kempten.de

In Digital Metamorphosis by Andreas Mueller at HR Week 2019

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