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May 14, 2018

"Digital transformation starts with a new mindset."

A band-aid that monitors vital signs and, if necessary, makes an appointment with a doctor? An implanted microchip that can be used for paying or unlocking the front door? What sounds like pure utopia will soon be part of our everyday lives.
The influence of digitization on our lives and possible measures to be taken by companies in response to this development were at the core of a presentation given by Karl-Heinz Land. The digital Darwinist was invited by the entrepreneurs' association Stuttgarter Kreis to speak at UID Ludwigsburg.

The Stuttgarter Kreis is an association of managers of medium-sized enterprises, who come together to discuss how to optimize their strategies. UID's Managing Director Dr. Claus Görner is also member of this circle, which regularly invites external speakers. At the end of April, Karl-Heinz Land spoke to the Stuttgarter Kreis and the UID team about Earth 5.0, developing an exciting vision.
The presentation lasted two and a half hours, which felt like no more than 20 minutes, reflecting the speed of the digital development. We would like to share the insights of this presentation with you by summarizing the key Points.

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"Adapt or die!"

The digital revolution cannot be stopped. "Everything that can be digitized, connected and automated will be digitized, connected and automated," says Land. If you don't adapt in time, you will die. And the danger to fall behind is real because the development progresses exponentially. Every achievement accelerates the process, the innovation cycles keep getting shorter, the innovation steps bigger.

Data is the new gold

Digitization advances dematerialization. This means that data will be more valuable than actual products, opening up new business models. Land illustrates the meaning of dematerialization using a simple example: If, in the future, we use our smartphone or an implanted chip to unlock our front door, we will no longer need a key. Its physical presence will become irrelevant, making key manufacturers redundant, just like key production machines. In the end, not even raw materials will be required.

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Internet of Services

Digitization and dematerialization will push the value chain from products to services. Customers don't need banks, they need banking. They don't need hotels, they need overnight stays. Therefore, according to Land, we should use the term Internet of Services instead of Internet of Things. This shift from products to services also manifests itself in the skill sets that companies are looking for in their employees: Those who used to hire engineers and builders will now employ UX and service designers, big data analysts or security experts.

Old ways vs. new goals

"Old ways don't lead to new goals," says Land. Therefore, the first step into the digital world is to change the mindset. Digitization changes everything: a company's portfolio, the customer communication as well as internal collaboration processes. Moreover, it requires no less than a paradigm shift: from planning to experimenting, from local to global, from hierarchies to networks.

Only those that take the plunge will survive in the long term. Even if it may not seem to be the case now – everyone can digitize their products and services. To illustrate his case, Land uses the example of a tire dealer who will use an app to advise his customers of the state of their tires and suggest a maintenance date at the same time.

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Shaping or enduring

Digitization often seems like a must. According to Land, however, it is more like a present for us. It offers the chance to make the world a better place. Platform, sharing and circular economies are only some of the examples Land cites to illustrate his Point.

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Sharing platforms foster the fair distribution and better accessibility of resources. Circular economy sustainably feed products back into the value cycle. Artificial intelligence, used for example in smart cities, can make our lives more efficient, innovative, social and ecological. We are now at the crossroads to decide: Where do we want to be in ten years' time?

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Karl-Heinz Land's presentation inspired the UID team to lively but also skeptical discussions for days.

Karl-Heinz Land is a digital Darwinist and evangelist. In 2006, the World Economic Forum (WEF) and the Time Magazine honored the business consultant with the "Technology Pioneer Award“. In June 2018, his new book "Erde 5.0 – Lösungen für einen Planeten in Not“ (Earth 5.0 – Solutions for a Planet in Distress) will be published in German.

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