What happened to the dodo? Darwinism. As humans settled on the island of Mauritius, bringing rats, cats, pigs and monkeys with them, the dodo became easy prey for humans and animals. The dodo could not adapt to disruptive changes in its environment, and in less than 200 years after its discovery, the flightless bird became extinct.
The same concept applies to the 21st century business world—adapt or die. However, we don’t have 200 years to see how things work out. Moore’s law states that computer processing speed doubles every two years, and as Ray Kurzweil wrote about the law of accelerating returns: “We won’t experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress.”
With technology evolving at breakneck speed and disruptive innovations growing exponentially, understanding digital Darwinism is necessary for business survival.
What is Darwinism?
Darwinism is Charles Darwin’s theory of the evolution of species through natural selection, commonly summarized as “survival of the fittest.” Nearly 50 years before digital transformation became a buzzword, business professor Leon C. Megginson summarized Darwin’s theory: “It is not the strongest or the most intelligent who will survive but those who can best manage change.”
What is digital Darwinism?
Digital Darwinism applies the theory of natural selection to managing change in the digital economy. The phrase “digital Darwinism” was popularized in 2011 by digital analyst Brian Solis, who wrote in The Washington Post: “Digital Darwinism is the evolution of consumer behavior when society and technology evolve faster than some companies’ ability to adapt. The point of natural selection is that only some businesses will survive.”
Digital Darwinism is survival of the fittest in the digital economy—adapt to disruptive innovations and embrace evolving technologies, or go out of business.
Examples of digital Darwinism from the past
Let’s examine the following technological innovations, which outpaced and replaced entire products and their industries:
- Mobile phones replaced personal landlines, phone booths and pagers.
- Digital music and streaming replaced CDs.
- Digital photography replaced film photography.
Digital Darwinism changed the way we communicate
With the arrival of the first cellular phone in 1973, many other telecommunication devices, like payphones, quickly became endangered forms of communication. When’s the last time you needed a quarter to place a phone call in a phone booth? Indeed, New York City recently removed the last of its iconic phone booths from the city’s streets.
As mobile technology and cellular innovations have evolved exponentially, digital Darwinism has given us computers in the palms of our hands. The fall of phone booths, landlines and pagers directly correlates to the rise of smartphones—as of February 2022, 6.6 billion people own smartphones.
Digital Darwinism changed the way we make memories
“A picture is worth a thousand words,” goes the saying, and that’s why photos have the unique ability to tell stories about our past. As humans, we originally captured memories of a first trip to Disneyland or baby’s first steps in physical photographs. Nowadays, our memories are captured in digital form, which replaced traditional film.
In 1975, Kodak invented the first digital camera while holding 90 percent of the film market. The company could have become a pioneer in digital photography and everything the industry now encompasses since the integration of smartphone and camera technology. However, Kodak was skeptical about transforming its business model and believed digital photography was a threat to its 90 percent market share of film photography, and it subsequently lost its market leadership by missing digital opportunities.
Digital Darwinism changed the way we experience music
CDs replaced cassette tapes, and cassette tapes replaced eight-track cartridges, and all of this change happened with the slow concurrent rise of online shopping and demise of mall shopping. Consider the evolutionary path of the shopping mall. The mall was where trendsetters once purchased new clothing and accessories—and especially music. While vinyl has seen a resurgence in recent years, the allure of buying and listening to new music in shopping malls ended long before social distancing measures shuttered retailers.
Digital Darwinism has continuously transformed the music industry and rendered physical media obsolete. Ultimately, MP3s and digital streaming services replaced CDs, because who needs a mix tape when you can share your Spotify playlist with friends? Plus, the cars we drive now feature satellite radio services, which obsoleted the cassette tape and CD players. However, Tower Records, which closed its brick and mortar stores and declared bankruptcy in 2006, resurrected its business online in 2020. Through digital transformation, the company rose from the ashes of dead business models to compete in today’s digital music world.
Examples of digital Darwinism in the present
Technology is continuously evolving and changing the way we socialize, consume information and do business.
Digital Darwinism is changing how we socialize
From the early days of Hollywood to superhero movie reboots, humans have flocked to theaters to watch their favorite stars on the big screen with friends, families and coworkers. Movie watching was a social activity—we shared popcorn and candy, as well as post-movie conversations about how we really wanted the movie to end. Going to the movies was also a rite of passage for many first dates. Nevertheless, theaters became collateral damage during the pandemic, and while the movie industry could still possibly save theaters from extinction, movie streaming is here to stay.
“The ebb and flow of the popularity of streaming is mainly determined by the ups and downs of the pandemic,” said Paul Dergarabedian, senior media analyst at Comscore. “That has created not only a conundrum for studios, but also for consumers who are torn between their desire to see blockbuster films on the big screen at their local multiplex or from the comfort of the couch at home.” Companies like Netflix are banking on people’s desire to stay home and watch movies. For example, a machine learning algorithm saves Netflix an estimated one billion dollars a year. By reducing customer churn through personalized recommendations, Netflix is leveraging innovative technologies to lead the pack in movie streaming services.
Digital Darwinism is changing how we consume information
Gone are the days of “paperboys,” who woke up at the crack of dawn to deliver newspapers, often on bicycles, to neighborhood front doors. The Internet and social media forever changed the way we receive local and world news, entertainment stories and daily sports stats.
While many newspapers have supplemented their physical presence with a digital presence, newspapers have been struggling to avoid extinction for over a decade, because they simply don’t make as much money from website ads as they do from print ads. Plus, 83.89 percent of the world’s population now owns a smartphone, whereas in 2016, only 49.40 percent of the world’s population owned a smartphone. In other words, in only six years, smartphone ownership grew by nearly 35 percent, which means more people are consuming information through their mobile devices every single day.
Digital Darwinism is changing how we do business
Today, business is overwhelmingly conducted in the cloud as companies focus on digitalization, digital transformation and cloud‑first strategies. With cloud computing, companies can achieve cost‑effectiveness, flexibility, high scalability and a high level of security—without owning a single server. In 2020, 31 percent of companies depended on doing business in the public cloud, and by 2024, adoption of enterprise cloud platforms will increase by almost 15 percent. As the business landscape moves to the cloud, demand for cloud‑based services like integration‑platform‑as‑a‑service (iPaaS) is rising, because iPaaS technology helps ensure business continuity by moving infrastructure that is prone to costly disruptions into the public cloud.
Don’t be a dodo in an age of digital Darwinism
Digital Darwinism is a constant challenge, as evidenced by the examples of products and business models that became extinct because companies did not, or could not, adapt to the pace of disruptive innovations.
In Part 2, we’ll explore how companies that quickly adapt to disruptive innovations and evolving technologies can survive the competitive digital economy with digital transformation.
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Written by: Rolf HolickiRolf Holicki, Director BU E-Invoicing, SAP&Web Process, is responsible for the SAP/WEB applications. He has more than 25 years of experience in e-invoicing, SAP, Workflow and business process automation. Rolf Holicki has been with SEEBURGER since 2005.