The brave new world of digital innovation


This article is part of our special report Innovation and the Digital Economy.

The digital world is undergoing a revolution in "self-organisation" – thanks to social media – that offers individuals, companies and governments opportunities to transform society in innovative ways, according to a leading Internet expert. It also threatens to unleash civil unrest on a scale never before witnessed, he warns, citing the Arab Spring.

Don Tapscott, the digital strategist who inspired US President Barrack Obama to focus on internet group organisation during his 2008 election campaign, told delegates at a Brussels innovation convention that "vertically integrated industrial business is becoming obsolete".

“The same processes that led ‘old-world’ knowledge models such as the Encyclopaedia Britannica to be overtaken by on-line Wikipedia is moving fast into manufacturing industry,” Tapscott told the conference.

Chinese employees drink tea and surf the web

Speaking to the European Commission’s first Innovation convention, Tapscott said the Chinese motorcycle industry is an example of a new corporate structure that uses the Internet to operate in a decentralised manner.

“This has rapidly taken over 40% of the market, yet the employees meet over the Internet and in tea rooms,” Tapscott said.

Such a revolution is about to hit the pharmaceutical industry, Tapscott said, saying that it will lose almost half of its revenue if it fails to adapt to the need to share research. He said that he had encouraged Commission President José Manuel Barroso to convene a meeting of leading pharmaceutical companies “to start talking about finding common sharing solutions for their research”.

His warnings were not reserved for companies, however, and he said governments – “which took on their current architecture at the same time as old-style industry” – also needed to operate in “looser, more open digital networks”, enabling states to be more efficient.

Flower power was child’s play

Public-private partnerships will give way to new formations of web based co-operation between governments, Tapscott said, drawing parallels with the collaborative innovation and social media that he said greatly assisted in the revolutions of the Arab Spring.

In a separate interview with EURACTIV, Tapscott warned that although China has innovative companies and is embracing the web, it also has very outdated factories with many thousands of employees, and he sounded a warning for Europe as well.

The revolution in Tunisia was aided by the Internet and social media, but was sparked because the country had a youth unemployment level of 42% , he said, pointing out that Spain’s youth unemployment rate is currently at the same level.

“When you have transformation you have dissonance. The possibilities of global youth radicalisation and the opportunities of self-organisation in Europe could lead to unrest which makes the 1960s look like kids stuff,” Tapscott said.

Click here to read a full interview with Don Tapscott.

With an ageing population and strong competitive pressures from globalisation, Europe's future economic growth and jobs will increasingly have to come from innovation in products, services and business models.

Innovation has been placed at the heart of the Europe 2020 strategy for growth and jobs.

The first Innovation Convention is taking place one year after the adoption of the Innovation Union flagship initiative, the EU's roadmap to make Europe more competitive.

Subscribe to our newsletters