Digital Darwinism – Part 3: How Fear and Skepticism Inhibit Disruptive Innovations

Moving forward into unknown territory may feel like jumping off a cliff. However, as digital Darwinism accelerates the speed of business, new technological advancements are only possible when industries take a leap and land with disruptive innovations that change the way we live, communicate and do business. In Part 3 of our Digital Darwinism series, we will examine how fear and skepticism can inhibit innovative technological progress.

To maintain homeostasis, humans are naturally resistant to change[1]—especially when it comes to new technologies in the 21st century. People view change with suspicion, and organizations need to build acceptance for new technologies with change management tools.

Technology keeps evolving despite fear of the unknown

In the era of digital Darwinism, technophobia (fear of technology) and skepticism have resulted in some of the most spectacularly failed predictions and missed opportunities in human history, driving many businesses into extinction. Here are five examples of industries that evolved through digital technologies:

1. Railway
   The history of the logistics industry includes fears that were spread about the first rail journey in Germany on December 7, 1835, which was made possible by a few wealthy merchants between Nuremberg and Fürth. Some doctors predicted terrible brain diseases for anyone who traveled by train, claiming that pneumonia would be contracted from the wind by anyone who raced through the countryside at speeds of 30 or 40 kilometers an hour. Citizens were forbidden to travel by train, because at that speed, doctors said people could become unconscious or insane[2]. A pastor in the small town of Schwabach even railed against the railway from the pulpit: “The railway is a devil’s thing, it comes out of hell, and anyone who rides it is virtually entering hell!”[3]
2. Automotive
   On January 29, 1886, Carl Benz applied for a patent for his “vehicle with gas engine operation.” The patent, German Reich Patent DRP 37435, is considered the birth certificate of the automobile[4], and at the time, the maximum speed was 20 kilometers per hour[5]. According to the Mannheim police, automobiles were too fast and spooked horses with their rattling noise, so they issued a ban on driving the vehicles. It was only when Carl Benz’s wife, Bertha, dared to take the first cross‑country trip that the automobile industry achieved a breakthrough. Bertha proved that an automobile could safely travel a distance of over 100 kilometers. “So, without Bertha Benz there would be no car; even if it sounds like a cliché at first. But it’s just the way it is,” wrote her biographer Angela Elis[6].
3. Telephone
   The telephone was initially met with skepticism, which is why the earliest telephone directory, which appeared in Berlin in 1881, was called the “Book of Fools.” In 1933, the New Yorker magazine reported that people avoided telephones during thunderstorms because they were afraid that lightning might strike them. People were also concerned that the telephone would be misused for espionage purposes.[7] Despite the public’s initial fears, the spread of telephone communications was unstoppable, as there are currently 1.27 billion landline connections and 2.68 billion mobile phone contracts worldwide[8].
4. Computers
   Thomas Watson, head of IBM, was demonstrably wrong with his 1943 prediction “I think there is a world market for maybe five computers.[9]” The home computer market was also completely misjudged. Ken Olsen, founder of the computer company Digital Equipment Corp, believed in 1977 that computers would only be of interest to businesses: “There is no reason why anyone would want a computer in their home,[10]” he said.
5. Photography
   Without the integration of mobile phone and camera technology, would we ever have had selfies and the demand for apps like Instagram? Kodak created the first digital camera in 1975, and in “Digital Darwinism Part 1: Disruptive Innovations Drive Digital Transformation”, we discussed how the company was skeptical of new technology and missed the opportunity to become a pioneer in digital photography.

Lack of knowledge feeds technology skepticism

Historical hindsight has not vindicated all fears and doubts about technology, because the skepticism has been largely due to an initial lack of knowledge and understanding. Current studies, as shown in figures 1 and 2, demonstrate that many knowledge gaps still exist for digital technology, which lead to persistent skepticism.

Figure 1: The skepticism of Germans towards new technologies[11]

Figure 2: The skepticism of Germans towards new technologies [12]

From the surveys, you might reach the conclusion that Germans are technologically illiterate. What does that mean for the future prosperity and security of companies doing business in Germany?

Many companies are struggling to adapt to digital Darwinism, while others have been very successful. For instance, why is Apple worth more today than General Electric, Wal-Mart, General Motors and McDonald’s combined? And why can’t a single German company compete with the “Big 4” (Amazon, Apple, Facebook and Google)?[13] In Germany, the use of artificial intelligence (AI) is still in its infancy, as 603 companies surveyed by a 2020 Bitkom study proved:

• Only 8 percent expect to use AI solutions in 2021
• Only 30 percent are discussing AI
• For 59 percent of the companies, AI is not a consideration

Figure 3: Is AI being used in your company or is it being planned or discussed?[14]

Looking at figure 3, we should question if the current commitment to digital transformation is sufficient for Germany to play a leading role in the future economy. Ignoring the future of digitalization and focusing exclusively on current competitive situations in one’s core market will lead a business straight to extinction. Nevertheless, this pattern of behavior can be observed across all sectors in small and medium-sized enterprises, as well as in large corporations. For example, the automotive industry would not be in its current position of having to catch up with Tesla by five to ten years if the industry had not rested on its strong sales figures, believing that success would continue without disruption.[15]

Stay ahead of the competition with integration

Disruptive technological innovations can shake up entire industries and completely displace established processes and solutions. When disruptions actively shape market developments, the previously established market and industry boundaries are broken down and new, cross-industry ecosystems are created.

For established companies, the barriers to implementation often lie in cumbersome organizational structures that are geared towards process efficiency and profit maximization. By contrast, start-up companies can initiate disruptive innovations more easily due to their agile organizational structure. Plus, start-ups are forced to break new ground due to their initial lack of profitable business models, while established companies must establish monitoring processes to detect early warning indicators of disruptions in order to respond to evolving changes in a timely manner. Therefore, established companies cannot wait to take action; they must be proactive and willing to take risks to survive the digital competition. Digital business processes within the company and across the company boundaries with external business partners are key elements of staying digitally competitive.

Using an integration platform is a recommended way to take proactive action toward staying competitive. The SEEBURGER Business Integration Suite (BIS) is a single scalable platform for all your integration requirements – available as a software solution or as high‑SLA cloud services.

[1] https://www.psychologytoday.com/us/blog/the-truisms-wellness/201701/why-we-resist-change

[2] https://pagewizz.com/dampfeisenbahnen/

[3] https://www.blikk.it/angebote/modellmathe/ma0740b.htm

[4] https://www.daimler.com/konzern/tradition/geschichte/1885-1886.html#:~:text=Am%2029.,Patent%2DMotorwagens%2C%20Typ%201

[5] https://www.deutschlandfunk.de/bertha-benz-autofahrt-vor-130-jahren-106-kilometer-100.html

[6] https://www.deutschlandfunk.de/bertha-benz-autofahrt-vor-130-jahren-106-kilometer-100.html

[7] https://www.wienerzeitung.at/h/risse-im-fundament-des-internets

[8] https://winfuture.de/news,34117.html

[9] https://www.sueddeutsche.de/digital/beruehmte-fehlprognosen-computer-sind-nutzlos-1.935972

[10] https://www.sueddeutsche.de/digital/beruehmte-fehlprognosen-computer-sind-nutzlos-1.935972

[11] https://www.presseportal.de/pm/34401/4525459 (Source: obs/Maisberger GmbH)

[12] https://www.presseportal.de/pm/34401/4545195 (Source: obs/Maisberger GmbH)

[13] http://www.cole.de/digitale-transformation-ein-weckruf/

[14] https://www.bitkom-akademie.de/news/wo-steht-deutschland-bei-der-ki

[15] https://www.sichtflug-medien.de/2020/10/01/zukunft_als_wichtiger_faktor_fuer_das_eigene_marketing/

Source: https://blog.seeburger.com/digital-darwinism-part-3-how-fear-and-skepticism-inhibit-disruptive-innovations/