Technologies do not evolve in isolation. In fact, they have grown up so interrelated and inter-dependent that they not only reinforce each other but create completely new compound impacts. Beneath the trends focused on isolated categories of technology lie combinatorial forces that are causing a blurring of lines between and among diverse technologies.
Complexity and Contention: The Future of Digital Infrastructure
Why Do So Many B2B Data Ecosystems Fail?
The technology hype machine has long been accused of racing ahead of reality. And it’s not a lie that all these isolated phenomena—AI, blockchain, nano-medicine, Web3, quantum computing, etc.—have come up over the horizon and are hurtling toward us. Spotting isolated trends is like watching waves break on the shore, one after the other, while remaining unaware of the deep currents and invisible undertows that cause this surface-reality.
MOVING FROM SIMPLE TO COMPLEX APPLICATIONS
source: Harbor Research
We have entered a new era of innovation enabled by cheap pervasive networked sensors and sensor data fusion which are enabling a whole new generation of systems. These systems are based methods and intelligent algorithms for recognizing things and doing something with the result — systems that are self-sensing, self-controlling, and self-optimizing—automatically, without human intervention. It would not be far-fetched to call them self-aware.
Applications enabled by new sensing, imaging and computer vision technologies and automated analysis of very large volumes of sensor data are enabling systems with real-time situational awareness. Increasingly, value is enabled by the creation of models and the analysis of data, rather than by mere software per se. As a result, technology has moved beyond just proposing task solutions — such as executing a work order or a sales order — to sensing what is happening in the world around it, analyzing that new information for patterns, risks and alternatives and automatically taking actions.
This vision is not in itself new. It has been freely available at least since the 1950s, when such thinkers as Jay Forrester (System Dynamics) and MIT’s Norbert Weiner (Cybernetics and The Human Use of Human Beings) wrote landmark books describing a world transformed by automation, machine intelligence, and optimized systems. What makes this new generation of adaptive and autonomous systems unique is the interdependence of technologies and the synchronous advancement of new innovations.
THE ADVENT OF ADAPTIVE AND AUTONOMOUS SYSTEMS
The fusion of interrelated systems and technologies gives new systemic values. For example, the development of autonomous vehicles not only depends on advancements in robotics and artificial intelligence to operate vehicles, but also on the maturation of the Internet of Things so an array of sensors can analyze driving conditions and interact with other cars, not to mention improvements in lithium and battery technology for cars to be able to efficiently refuel themselves. The interdependence of these technologies has no doubt contributed to their synchronous advancement. For example, many believed a limiting factor in the emergence of driverless cars was the high cost of batteries required to travel long distances. In response, however, battery producers have dramatically increased production to scale down unit costs. Over the last ten years, EV battery prices have fallen 90%.
Another example is supply chain systems. Supply chain issues have been compounding for years, but the emergence of new digital solutions that displace antiquated, paper-based logistics will go a long way towards streamlining workflows and optimizing operations. Years of investment in connected infrastructure and the deployment of autoID sensors, cameras and IoT systems have digitized the physical movement of goods. Today this connected infrastructure is being integrated with advanced analytics for demand sensing and production scheduling, bots to track shipments, deliveries and inventories, VR and autonomous robots to enable enhanced picking of products, and smart contracts and distributed ledgers to align supply and demand.
The innovations in both vehicles and supply chains are what we call “complex adaptive systems” where multiple technologies converge and reinforce one another. These phenomena are setting the stage for the next big thing but what do mean by “Next Big Thing?”
THE “NEXT BIG THING” IS NOT ONE THING, IT’S A COMPLEX SYSTEM OF SYSTEMS
The advent of complex adaptive systems brings about the potential of synergizing and fusing different disciplines to develop advanced products, processes, and systems that are more adaptable, reliable, precise, flexible and robust.
The synergistic integration of digital systems with mechanical engineering, electronics material sciences and chemistry in applied systems will embed complex decision making into the operation of physical systems. A complex adaptive system is not just the marriage of electrical and mechanical systems and it’s much more than just integrating computing and control systems – it is the complete integration of all of these subsystems and technologies.
COMPLEX, ADAPTIVE AND AUTONOMOUS SYSTEMS
source: Harbor Research
Complex adaptive and autonomous systems have common attributes, including:
- The ability to infer and reason, using substantial amounts of appropriately represented knowledge.
- The ability to learn from their experiences and improve their performance over time.
- The ability of systems to identify and respond to changes in the environment and to user’s needs.
This era of innovation is setting the stage for the development of human-oriented systems that enable intelligent and cooperative coexistence (beyond time and physical constraints) between technical systems and biological ones (human) within their natural environment.
Whatever we call these opportunities—autonomous systems, complex systems or otherwise—they all presuppose technologies that integrate new software and hardware technologies to inform systems and applications based on deeper, peer-to-peer interactions between networks, software and electronic and electro-mechanical subsystems. These technological innovations will drive more compound and dynamic value streams powering new use cases and applications in a variety of industries, from factories, to supply chains, to healthcare and more.
EXAMPLES OF COMPLEX ADAPTIVE AND AUTONOMOUS SYSTEMS
source: Harbor Research
WHAT DOES THIS ALL MEAN FOR GROWTH STRATEGY?
All of the major segments of players (e.g. machine and equipment OEMs, sensors, software, network services) who serve the evolving Smart Systems arena have historically operated within well-established business models that reflected the distinct competencies that each group had at its core. But software and digital systems is causing a blurring of the lines between legacy business models, forcing all the major suppliers to re-think their strategies. This is especially true of the relationships between and among complementary suppliers of digital systems and physical machine-based systems.
How will this impact the growth strategies and digital and machine players? The days when a company could generate value simply by providing near monopolistic control of an interrelated portfolio of products has given way to an age of interconnectedness in which value is built by integrating interrelated technologies and collaborating with the right ecosystem partners.
Trying to understand the new roles and relationships required to realize complex adaptive systems, it helps to look at adjacent industry sectors where digital technology has made earlier inroads and evolved further. Auto manufacturers, for example, design and assemble beautiful cars, one after another, right down to the perfect integration of digital communications and information services, with most consumers having no grasp of the ecosystems involved.
The advent of the connected car, with built-in infotainment systems, was a great challenge for automotive OEMs. The biggest conflicts involved the growing diversity of new players in the vehicle ecosystem, where synchronization of innovations proved very difficult. When the life-cycle of the vehicle was 5+ years, and most new suppliers of electronics and software were operating within 12- 18-month innovation cycles, the ecosystem was perpetually out-of-phase, making true collaboration next to impossible.
Today the role of digital technology in connected vehicles is having a significant impact both on customer expectations and the way that forward-thinking auto OEMs are re-engineering their end-to-end value chains. The automotive industry provides many parallel lessons and trends for the smart city sector, including:
- Networked, collaborative co-creation displaces the traditional hierarchical (“hub and spoke”) design model where the vehicle OEM dominated and controlled the entire design and engineering process.
- The vehicle becomes a digital platform with a layered service-oriented architecture where multiple, parallel suppliers can integrate new innovations.
- The new platform architecture enables diverse digital services from a complex web of alliances which, in turn, become the primary driver of new revenues and profits.
In fact, multiple players in the auto industry—including parts and device manufacturers, cellular carriers, smart phone manufacturers, and myriad more—now engage in new relationships and interactions to enable these offerings in the marketplace. There are glories to being part of an ecosystem, and one of them is delivering a superior result within the confines of a rich mobile experience while making it look easy, which it most certainly is not.
THE SPECIAL ROLE OF INNOVATION ORCHESTRATOR
Mastering digital transformation involves a subtle dance of timing and delivery. Technology innovation always moves faster than the development and marketing of actual products and services. Part of the ecosystem story is the ability to see where, and how fast, capabilities are going and thus provide services to users and customers before the next technological wave makes them obsolete.
Consider that during the long life span of physical systems like buildings, factories, transportation systems and similar, ten or more cycles of new innovations will occur in various sub-systems and components. Take a building for example. During the decades-long lifespan of a commercial building, several cycles of major innovation will occur in various embedded devices and equipment. Physical infrastructure systems such as power distribution might remain more or less constant, but many other sub-systems—such as LED lighting—are now designed in a modular way and can be swapped out when they become superseded.
Though no one can predict precisely when new innovations mature, the process by which they will be delivered is now becoming clear. Transforming infrastructure with new digital tools is creating the potential for visionary players to step into the important role of “digital infrastructure orchestrator”—that is, to become the enablers of new digital innovations and the facilitators of new alliances and relationships based upon information-sharing and co-creation of new solutions.
Architecture-driven orchestrators will need to stand in their prospective partners’ shoes and work through the logic of how these collaborative systems get designed, procured and deployed. It won’t be a classic linear product development cycle. Old-fashioned “customization” gives way to configurable tools and systems, while the technology itself makes everything more programmable.
Orchestrating innovations for complex adaptive systems creates an opportunity for a new generation of investors and players to reach out to ecosystem participants and build empathy with potential partners and innovators. Complex system orchestrators will have the potential to help facilitate changes in how infrastructure, software and equipment systems are specified and developed, helping to synchronize diverse players and innovations.
This role of orchestrator will require unique knowledge of diverse technologies, a deep understanding of how networks, data and analytics will enable a new generation of smart city and infrastructure applications. Investors and developers are ideally positioned to help users and customers as well as technology development organizations to solve tangible challenges, enable a step-function increase in digital capabilities, and enable new innovative applications. ◆
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