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Technology

Flagging gaps emerging from rising stature of data in business

Bright Simons
Bright Simons, president of mPedigree, a multinational technology and social innovation enterprise known for its anti-counterfeiting, digital supply chain, and agritech platforms and services. PHOTO | FAUSTINE NGILA 

Right Simons is the president of mPedigree, a multinational technology and social innovation enterprise known for its anti-counterfeiting, digital supply chain, and agritech platforms and services.

Recently, his technical paper A Farewell to Disruption in a Post-Platform World, published by the Centre for Global Development (CGD), drew global attention for its audacity to question common narratives in the technology world such as ‘data is the new oil’ and ‘Big Data is everything’.

He spoke to Digital journalist Faustine Ngila about rethinking the concept of data disruption as we head to 2030:

1. Why do you think the world needs a reality check regarding the use of data in 2020?

There has been a substantial growth in awareness about the potential of data to confer power on those who can hoard it. Like all forms of power, data concentration is subject to abuse. Globally, new public institutions are being created to enforce emerging regulations against the abuse of data. It is no longer useful to just amass data. You need inter-sectional and multi-sectoral data, often held by very different entities in highly diverse repositories. The ability to harness data to serve broader public interest, economically valuable, and socially transformative purposes is hampered by this diffuse conflict. Unless new alliances are created to back civic and non-corporatist responses to this problem, startup and leapfrogging style innovation in the developing will be greatly dampened.

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2. You mention Christensen’s model as the most practical and useful way to link disruption to the many important areas of socioeconomic development touched by technology. What does it entail?

Christensen describes the principal means through which disruptive innovation happens. Despite the harsh criticisms of his theory, is still the most plausible among the competing concepts of disruption. In rough terms, his theory says that it is not sloppiness that makes incumbents lose out. Rather, somewhat counter-intuitively, it is getting too good at the things that made them become dominant in the first place. They become so engrossed in maintaining their dominance by refining their initial advantages that they do not pay attention to the changing needs and shifting expectations of customers.

3. Your paper states that it aims to be a disruptor of comfortable narratives. Which narratives are these?

The popular saying that ‘data is the new oil’ only makes sense to big companies that have amassed a lot of data, at the expense of small upcoming innovators. It is becoming easier to consolidate valuable data. Another is that this data consolidation when harnessed by incredibly powerful algorithms, especially of the machine learning variant, can only make platforms bigger and more dominant over all aspects of our life. Mega-platforms will take over our education, health, transport, defense, logistics, and media.

These legacy mega-platforms enjoy “lattice power” in these hyper-lattices. I call this phenomenon, hyper-integration.

4. ‘Lattice Power’, quite a mouthful. What is it?

One of the most fundamental ways in which hyper-integration changes how the new economy game is played and won is how it forces leaders and managers, often without their even realising, to spend more and more of their time, energy, resources and bandwidth, improving their positioning in the hyper-integrated ecosystem, or as I call such ecosystems, “hyper-lattices”. Becoming a super-node in such a lattice gives you “lattice power”. It makes it possible to grow off rents rather than profits, strictly speaking. This can reduce the focus on making customers happy as the primary means of growing market share and improving pricing power through loyalty.

5. How can startups participate in the emerging digital economy?

Countries that want to see their startups and local companies keen to participate in the new economy thrive should actively consider the “pre-fabrication” of certain key integrations across major social infrastructure and deliver these prefab integrations as “public resources” to enable startups and local companies plug into value creation networks at lower cost and with less friction. Innovation will be stifled in the absence of this “scaffolding”, which I call “hyper-integration operating systems”, or “honeycombs”.

6. You are unimpressed by ‘monocentric integrations’ and how in the past they have led to unchallenged data consolidation. How unfavourable are they for African startups?

Mono-integrations are exemplified by the gateways and connection models controlled by the mega-platforms in the digital advertising industry. They are homogeneous; typically dominated by a central rule giver; setup on the basis of highly unbalanced contracts; and designed for higher levels of automation and agile maneuvering. These mono-integrations enabled the data-consolidation that made the current clique of mega-platforms so rich and powerful. They are increasingly not viable as the ongoing “technologisation” of all industries and social domains now expands into areas such as health, agriculture, education, transport, defense, real estate among others. Another integration model, the polycentric, is becoming the only viable approach.

7. What are the drivers of hyper-integration?

Fraud, risk and the search for top line growth - hetero-convergence. Digitalisation exacerbates all three. Digital business models are incredibly prone and susceptible to fraud.

Other types of risks, including abuse, are also magnified by digitalisation, such as the now widely discussed issues of cyber security. The thing is, having superior data-intelligence or super-algorithms such as mutative anti-viruses are no longer enough to fight fraud and risk. Platforms need to integrate their threat signature databases to be effective. Whether it is fighting spam or malware, standalone systems heavily underperform.

Regarding “top-line” growth, the problem right now is that all the low-hanging fruits for digital have been plucked already: media, telecommunication, mass communication, entertainment, search, social graphing etc. All the big future profits are in areas like health, education, agriculture, defense and transport.

8. The sum effect of these drivers is the growing convergence across industries, and the rapid dissolution of boundaries. What does this mean for the world?

For digitalisation to continue to ramp up productivity, some of the underlying economics of industries must converge (hetero-convergence). This requires intense integration of processes to remove some of the efficiency and productivity gaps. These are some of the forces intensifying hyper-integration. The interesting thing is that they reinforce each other. Hetero-convergence deepens risks and the opportunities for fraud, for instance, whilst the need to address both threats accelerates hyper-integration.

9. So, what does all this mean for economic development in Africa powered by technology, entrepreneurship, innovation?

As innovation becomes more expensive and more time-consuming due to the constraints of network politics in the new economy, African innovators, technologists and entrepreneurs cannot seek to grow their enterprises through the harnessing of new ideas and speed to market alone anymore. They must get adept at network politics. Unfortunately, this requires considerable skills and resources not readily available. The long lead-time to profitability implied by the need to amass valuable integrations and to spend time configuring them properly can easily kill off many startups, social enterprises and other new economy aspirants and players in Africa before they get anywhere close to their prime.

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