Data - Value - Creation E-Book

Fiona van Maanen

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This book offers a vision and approach to formulate an answer to the many challenges from a holistic perspective (and with data as the source for value development). Both on a geopolitical and macro level, but also on a corporate microlevel, the digital transformation 4.0, as described in this book, offers a clear, manageable vision and approach to give our society and economy a new boost, using data as the new source for value creation.

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Data - Value - Creation

SPECIAL EDITION

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Data - Value - Creation

SPECIAL EDITION

This is how you make money in the digital age

Ken van Ierlant, Fiona van Maanen a.o.

Colophon

Title:

Data - Value - Creation SPECIAL EDITION

Translation from original edition in Dutch:

ISBN 978 94 018 0777 7 Data - Waarde - Creatie - Zo verdien je geld in het digitale tijdperk (Van Haren Publishing, 2021)

Authors:

Ken van Ierlant, Fiona van Maanen (eindredactie) m.m.v.: Jeroen Aalbers, Abdulmohaimen Amer, Adjiedj Bakas, Martin van den Berg, André Biesheuvel, Klaas Brongers, Ron Brummans, Corjan Dasselaar, Natascha van Duuren, Edward Flink, Marco Gianotten, Martin Grasdijk, Peter de Haas, Ruud Huisman, Abdullah Keteldijk, Ernst Jan Louwers, Fiona van Maanen, Jolanda ter Maten, Bert Pijnse van der Aa

Publisher:

Van Haren Publishing, ‘s-Hertogenbosch, www.vanharen.net

ISBN ebook (pdf):

978 94 018 1135 4

ISBN ePub:

978 94 018 1136 1

Copyright:

© Van Haren Publishing, 2023

For further information about Van Haren Publishing, please send an email to: [email protected]

No part of this publication may be reproduced in any form by print, photo print, microfilm or any other means without written permission by the publisher.

Although this publication has been composed with most care, neither author nor publisher can accept any liability for damage caused by possible errors and/or incompleteness in this publication.

It’s all about the data, stupid!

We live in a paradoxical time where uncertainty, conflict of direction, society, and politics burden heavily on the manageability of society, economics and civilization.The disruption of a virus was the last thing we would want and has left a trail of destruction on all possible grounds. But at the same time this crisis does offer the opportunity to think and act outside of the box for once. Never waste a good crisis! We realize more and more that most important issues are no longer solvable through a paradigm in which traditional thinking patterns and solution directions are mostly approached by identical optics. We are confronted daily with decisions based on iterative and incremental truth- finding, in other words by advancing insights while the underlying data could have told us already that the way of solution should be in another direction, in only a fraction of the time and for substantially lower expenses. The obscurity on the administrative level to think and act holistically and data-driven is quite shocking because the necessary technology and data are amply available but not applied in the correct manner. What we don‘t know we fear: Therefore a digital transformation is also a sociological issue because it mobilizes all layers in an organization to see the business- and operating model against a sharp light and make the right choices using data.

The development of ‘emerging technologies’ has gained momentum, which cannot be kept up with on a political and company level by directors. And besides this there‘s talk of turmoil and panic that has originated from world powers fighting globally for technical leadership on a geopolitical level. A great lead is created only for a limited number of players, as a result of their lead in the applicability of this technology. Those left behind are in danger of being wiped out. Therefore there‘s a lack of a level playing field, which means that the Fortune 500 list will look completely different in five years time.

Ten years ago oil companies topped the Fortune 500 list. Nowadays it is dominated by data driven ‘big tech’ with their multisided platforms. At the same time we see smalltechs in the form of unicorns disrupt existing markets and wipe out incumbent players in just a few years time. And… the game has only just begun.

Europe feels cornered and is being sandwiched by the big techs in the USA and China and is trying to maintain its position through regulation. This rearguard action leads to a tremendous internal battle of directions in which the bureaucracy in Brussels is gearing up for a form of state capitalism with triads of idealistic objectives that have taken on an almost religious character. The harsh reality, on the other hand, demands ambitious entrepreneurship, innovation, a willingness to change, risking capital and a fighters-and-winners mentality from the real economy. In any case, the world has not become any clearer, with Bommel doubtfully wondering: 'Thom puss make up a ploy..." The success of the continuity of our society and business will have to come from entrepreneurship, where the government should facilitate this and not the other way around.

Data is the new oil with which a lot of value, prosperity but also well-being can be generated. But for that to happen, just like oil, it will first have to be explored upstream before it can be exploited downstream and converted into value creation. The most reassuring news is that our society thrives on data that is latent in all fibers of our society. But what good is it if you can't get to it properly so that as a result of this you lose the momentum to convert this latent wealth into financial and social equity? There is much more data than oil and this resource is also inexhaustible as long as you handle it correctly and are willing to enrich your data by combining creativity and good ideas.

We live in a time where there is a chronic lack of time and money. 75 years of thinking and acting in the producers-surplus model has saddled society, the government and the free-market economy with an unbelievable amount of legacy in thinking, doing, processes and systems, making production processes far too expensive and complex. Digitalization offers the opportunity to keep the good things from the past, but also to say goodbye to the bad things that lead to value destruction. In other words, the current model is broken and sub-optimization, goat paths, corner and cod-like twists or 'lipstick on a pig' will no longer offer a solution for this in the long term.

In other words: a change of course is called for, quickly, efficiently and effectively! Existing paradigms, management wisdom, trendy hypes and old wine in new business only lead to disillusionment and value destruction.

In a combination of various experts who have been active for many years at many companies and organizations, we have combined and recorded our knowledge and experience in this book to offer directors a way out of the challenges they now face as leaders.

This book offers a vision and approach to formulate an answer to the many challenges from a holistic perspective (and with data as the source for value development). Both on a geopolitical and macro level, but also on a corporate microlevel, the digital transformation 4.0, as described in this book, offers a clear, manageable vision and approach to give our society and economy a new boost, using data as the new source for value creation.

Ken van Ierlant

Table of contents

IT’S ALL ABOUT THE DATA, STUPID!

Ken van Ierlant

MANAGEMENT SUMMARY DATA – VALUE – CREATION

Ken van Ierlant

1 INTRODUCTION TO THE FUTURE OF THE ENTREPRENEURIAL NETHERLANDS

Bert Pijnse van der Aa and Ken van Ierlant

1.1 Digital economy 4.0 AFTER Covid-19

1.1.1 The battle between the free market economy and the panned economy (The Great Reset)

1.1.2 Production

1.2 The post-corona world will not be radically different

Adjiedj Bakas

1.2.1 Artificial Intelligence (AI) & Facial Recognition (FR)

1.2.2 Government more powerful than ever

1.2.3 Government must work harder and more efficiently

1.2.4 Staatskapitalisme wordt het nieuwe normaal

1.2.5 The progress Mix vs. The Great Impoverishment

1.2.6 Flying after corona

1.2.7 China versus the West: the power struggle is already decided

1.2.8 Digitalisation 4.0

1.2.9 Times change and we change with time

1.3 Emerging Technologies

Jolanda ter Maten

1.3.1 Innovation through the ages

1.3.2 New technology is not an IT-party

1.3.3 Blockchain

1.3.4 Artificial Intelligence

1.3.5 Internet of Things

1.4 AI as if it were ‘data fracking’

Ken van Ierlant

1.4.1 Convergence: where new technologies come together

1.4.2 Living and working in a Smart City

1.5 CASE: APPLICATION OF NEW TECH: IKKE

Corjan Dasselaar

1.5.1 IKKE (and his data) FIRST

1.6 What do I need in order to use those new technologies in my organization?

Ken van Ierlant

1.6.1 From application-centric to data-centric

1.6.2 The inevitable digital transformation

2 WHY START NOW WITH DIGITAL TRANSFORMATION 4.0?

Ken van Ierlant

2.1 sociological paradox of new technologies and the digital transformation

Ken van Ierlant

2.1.1 The sociological issue

2.1.2 New economic laws

2.1.3 The Psychology of the Rijnland-model

2.1.4 Impact on business operations

2.2 Impact by GDPR legislation

André Biesheuvel and Ken van Ierlant

2.2.1 Interaction between the European General Data Protection Regulation and the Digital Transformation

2.2.2 In-depth look at how the GDPR works

2.2.3 Case The Healthcare domain

2.3 Rise of the platforms

2.3.1 Government case

2.3.2 Private equity and shareholder value

2.3.3 Case: Developments in the system integrations

2.4 Technology and IT as a purpose or a tool

Ken van Ierlant

2.4.1 The demystification of the IT domain is on the one hand the driver and on the other hand the biggest threat to the Digital Transformation

2.4.2 The advent of the personal computer

2.4.3 IT version 4.0

2.4.4 The lily in the pond

2.4.5 The New reality 4.0

2.4.6 The big misunderstanding

2.4.7 The illusion of Big data, BI and The Customer Experience

2.4.8 Game changer 4.0

2.4.9 Data-centrism as the only way out of this crisis

2.4.10 The mother of all speedbumps

2.5 The new normal in Business & IT

Ken van Ierlant

2.5.1 Digital transformation is holistic

Marco Gianotten

3 DIGITAL TRANSFORMATION 4.0: USEFULNESS, NECESSITY AND REALITY

3.1 ANTITHESIS: WHY IS IT GOING WRONG?

Ken van Ierlant

3.1.1 Our Dutch innovation theatre

3.1.2 Producer and consumer not in sync

3.1.3 Moonshots versus platforms

3.1.4 Cost leadership or market leadership?

3.1.5 The business economic side of digital transformation

3.1.6 The consumer pays and determines: the disruptors' rule

3.1.7 Digitaal leiderschap: start top-down

3.1.8 Unraveling the business problem

3.1.10 Conclusion

3.2 The real drivers to start with a Digital transformation 4.0

Ken van Ierlant

3.3 Critical succes factors in Digitale transformatie 4.0

Ken van Ierlant

3.3.1 Operating costs versus investments

3.3.2 Customer engagement, or customer approach

3.3.3 Knowledge of the possibilities and when will it become an IT matter?

3.3.4 Finally

3.4 The inestimable value of change capacity

Marco Gianotten

3.4.1 Irreversible choices?

3.4.2 Experimenting as second nature

3.4.3 Adjusting is not enough

3.4.4 Winner

3.5 Everything revolves around data centrism

Abdulmohaimen Amer and Abdullah Keteldijk

4 THE DIAMOND OF DIGITAL TRANSFORMATION 4.0

4.1 Formulating digital strategy

Martin van den Berg, Klaas Brongers

4.1.1 Drivers and vision

4.1.2 Business model

4.1.3 Operating model

4.1.4 Digitally skilled employees

4.1.5 Speed and courage

4.1.6 A data-centric approach

4.1.7 Governance

4.1.8 Conclusion

4.2 Business model and IT operating model

Ken van Ierlant

4.2.1 The impact of the change on the balance sheet

4.2.2 Why is this data-centric architecture preconditional?

4.3 Financial re-engineering of the balance sheet

Ken van Ierlant

4.3.1 Data-centric entrepreneurship

4.4 Governance, risk and compliance

Ken van Ierlant

4.4.1 Digital transformation and the law

Ernst Jan Louwers and Natascha van Duuren

4.4.2 Legal dilemmas in digital transformation projects

4.4.3 Legal points for attention in digital transformation projects: a step-by-step plan

4.4.4 Checklist for directors

4.5 Leadership in digital organisations

Jeroen Aalbers

4.5.1 Business aspects of data-driven organizations

4.5.2 A leadership model

4.5.3 Leading change; "Knowing is not doing!"

4.6 Leaders conduct in Digital transfoamtion

Ron Brummans

4.6.1 Leader behavior when there is organizational inertia

4.6.2 Behavior of leaders in ambidextrous organizations

4.6.3 The digital leader

4.7 Social innovation

4.7.1 Developing skills for a lifetime

4.7.2 The new jobs: future jobs

5 THE HOW-TO OF DIGITAL TRANSFORMATION 4.0

Ken van Ierlant

5.1 The core of Digital transformation 4.0

5.2 Enterprise architecture is changing

Peter de Haas

5.2.1 Agile architecture

5.2.2 Focus on value creation; use architecture principles

5.2.3 The value is locked in your data

5.2.4 Take the step from an application-centric to a data-centric approach

5.2.5 Make the move from an application-centric to a data-centric enterprise architecture

5.2.6 What does this mean for your organization?

5.3 The power of information

Martin Grasdijk and Edward Flink

5.3.1 From artificially complex to naturally simple

5.3.2 Zooming in brings simplicity

5.3.3 Information-centric automation

5.3.4 The power of information

5.4 Data discovery

Derived form a tekst by Abdulmohaimen Amer and Klaas Brongers

5.4.1 Finding the right data

5.4.2 Data-exploration

5.4.3 Data-indexing

5.4.4 Data cleaning

5.4.5 Conclusion

5.5 Digital transformation 4.0: how?

Ken van Ierlant

5.5.1 Work according to a transparent script

5.6 Approaching Digital transformation 4.0

Ken van Ierlant

5.6.1 The analysis phase

5.6.2 The delivery-phase

5.6.3 The management phase

5.6.4 The exploitation-phase

IT’S ALL ABOUT DATA STUPID…

Ken van Ierlant

APPENDIX 1 RECOMMENDATIONS

APPENDIX 2 ABOUT THE AUTHORS

APPENDIX 3 READ MORE

APPENDIX 4 EMERGING TECH EXPLAINED IN MORE DETAIL

Management summary Data – Value – Creation

Ken van Ierlant

Digital Transformation 4.0. The term probably leads to questions: Aren't we skipping 2.0 and 3.0? Isn't this pointless inflation? The answer is: no. Precisely if we had stepped up a gear, precisely if we had opted for a title with '2.0‘, we would not do justice to reality. Subsequently we would have suggested that we see digital transformation as a gradual adjustment, as a number of small, incremental steps forward that make your company just that little bit more efficient. That's definitely not what we're aiming for.

That is why we are not advocating a digital transformation such as you would see with an average bank of some size. There they develop all kinds of ways to offer existing services to even more customers. But in fact it is always about the 'old way' of service provision. Same business model, same operating model. All those shiny gadgets they present, all those apps and new payment methods... It's lipstick on a pig.

Because digital transformation - real digital transformation - represents a total break with the past. That's why we don't opt for add-ons and cosmetic solutions, we focus directly on the operating model. With true digital transformation 4.0, you ensure that the costs of that model go down enormously, and that your organization can devise new product-market combinations that meet the needs of your customer. In other words: with digital transformation 4.0 we compare your company to fast-growing startups and scale-ups, and internet giants such as Google and Amazon. They can disrupt any market, be it foodstuffs or insurance. They have easy access to the correct data.

With that last word - data - we get to the heart of the problem. The vast majority of CEO‘s see digital transformation as a technical issue, something for IT. And so they dedicate this topic to the CIO, CDO, or CTO. That is not a good idea, because IT usually proves to be an obstacle. As far as they are concerned, many traditional companies struggle with their IT with so-called legacy. All their data is scattered across numerous applications that have been tied together for decades. For example, look at a well-known German car manufacturer They have no less than seven different customer databases that are spread over six different applications, so every change has to be entered six (or seven?) times. Extremely inefficient, extraordinarily expensive, and yet IT people can't quite say goodbye to this. In fact, their entire thinking is geared to maintaining those applications, and so they make the process unnecessarily complicated.

Time for a different view of digital transformation. This is not a topic for the CIO, CO or CTO, but for the CEO, because it is not a technology issue, but a business problem. Presently in 2021, technology is a commodity. You can get it everywhere and it hardly costs any money. In fact, you don't even have to bring it into your home anymore: you can easily place it outside the door. So there is no reason to spend any more capital on IT. And certainly no reason to let IT tell you how to run your business. Well, it's just as absurd to let IT decide on a digital transformation.

So, a business issue - but definitely a complex issue. Because digital transformation forces companies to work in a different way: not application-driven but data-centric. This also means that applications and legacy are depreciated at an accelerated rate. It also means that the data in those applications must be tracked down and cleaned out. About 85% of that data is ballast, also called ROT: Redundant, Obsolete and Trivial.

A simple example: a paragraph in which one party indicates that he owes the other party 150,000 euros should definitely be kept. But the salutation and the signature of that same letter - dear sir, with kind regards - are of course less interesting. So you only want to keep that 15% clean data. This is then placed in a database of an external provider, for example Google.

Let's be honest: that sounds like an expensive operation, especially at a time when the balance sheets of companies have been emptied at an accelerated rate. However, this is not so bad, because the process is actually self-financing. Just think, in the current situation companies are faced with numerous applications, and therefore also expensive licenses and management costs. The moment you dispose of those applications, you free up a ton of money and time. This leaves room for focus on business and opportunities, and for new product-market combinations that meet customer needs. Add to this the fact that the entire digital transformation can be a factor of six faster than an average advisory process, and you understand that the above-mentioned money will also become available quickly.

How is it possible to make Digital transformation 4.0 work so fast? Well, we believe that in the first instance this book is important for all layers of the organization including middle management, but also for the board. It is precisely in the initial phase where you want to involve middle management in the process, despite the fact that the middle managers also have their own interests. Like the IT people, they want to maintain the existing structures. After all, everyone is used to that structure, but without support from middle management every transformation will fail.

Of course, the objections to a top-down approach are obvious. Because with such a top-down approach, do you create a support base among the employees? We think so. Let's go back to the German car manufacturer with its seven different databases. Again, the employees there are busy all day filling those databases with the exact same data. Consider what happens when you tell those people that you are going to make their work much more interesting. That from now on they will carry out tasks that actually contribute to the profitability of the organization. And that you also offer to guide them in this new way of working. Most of them will react very enthusiastically. Much more enthusiastic in any case than when such a change is initiated by the IT department. In the perception of many colleagues, they simply build a new system or a new infrastructure there, which the organization then has to learn to work with. Often little attention is paid to support.

In summary, the two key learning points in this book are:

■ Why is digital transformation 4.0 a business issue and not an IT problem?

■ How fast can digital transformation 4.0 be implemented from your own resources?

1

Introduction to the future of the entrepreneurial Netherlands

Bert Pijnse van der Aa and Ken van Ierlant

Just like in our personal life, entrepreneurs often think about the future. That thought about the future usually leads to questions and goals about ‘more or less’. We are going to cut costs, make more turnover, serve more customers, introduce new services. However, such thoughts about the future are mainly based on knowledge and experience gained up to the present moment. The image of the future which you want to mirror your goals to is mainly based on what is already in your imagination. In other words, what you have experienced before in a possibly different context. Self or through the experiences of others. But everything that you or others have already experienced is actually no longer a real future. There is no world after covid-19, there is only a world with covid-19.

That which you cannot imagine, you cannot predict in advance. None of us can predict the future. Which entrepreneur could imagine that the covid-19 pandemic would break out beforehand? That this would lead to a new view on working from home? How valuable goals about ‘more and less’ are when such unpredictable situations arise? The future is full of corona viruses, black swans and other unpredictable events that will affect our business operations, figure 1.1. That will put us in a crisis.

In the words of Andy Grove, the first CEO of Intel Corporation, "Bad companies are destroyed by crisis, good companies survive them, great companies are improved by them." It is not the change or the crisis itself that affects our business. It's all in the decisions. The decisions that entrepreneurs make at crucial moments of change determine the future of the company.

Figure 1.1 Black swan

It is clear that there is now a crisis happening. Therefore it‘s time to make decisions about the transformation that will make the difference for the future for the organization.

When making such crucial decisions, taking a new path, or doing nothing, you are probably thinking: what has now actually changed? Disruption is a magic word in that capacity. So is tech disruption.

In fact, tech disruption is also just a moment of transformation. This means that many can and will lose, however it also means that there is much to gain for others. A new normal is never good or bad. A new normal is just the confirmation that there is no normal.

Covid-19 has taught us that no one can predict the future. Covid-19 has greatly accelerated this process of tech disruption that we are in and that forces us to make decisions. You can therefore only create in the future through the decisions you make as an entrepreneur at crucial moments.

Success has never been about predicting, successful businesses have never been created by predicting the future. They are successful because of their good understanding of the NOW. What problems need to be solved NOW, what opportunities are there NOW? If you take a good look at the current situation, can you now determine and decide what to do (NOW)?

What we can observe NOW is that there is an increased rate of change. Our bodies change every minute. Change is a constant in our lives. We can already deal with that biologically. We often don't see those changes anymore. However, speed is something that we do not easily deal with and that we have not been 'automatically and unconsciously' taught. The adoption of the car took about 67 years1. The rate of adoption of the tablet was around four years. The speed of innovation is now increasing exponentially. Thanks to digital tools, everything is moving faster and faster. Covid-19 has also given an extra boost to, for example, working from home and shopping online.

Economic growth is the fundamental base of our lifestyle. However, the enormous change and growth in recent years has had a major impact on our consumption of raw materials and CO2-emissions. Over the past 50 years, 60% of all animals have disappeared. This is not about the planet, it's about what our future will look like. Technology tells us that we can really change. Our grandchildren will look back on us as the generation that died of Covid-19. Knowledge will help us.

Technology is therefore an important driver that changes our lives at lightning speed. This is reinforced by sociological developments and the pressure placed on them by society. Decision-makers are pushing us towards change not only by using words, but also in legislation and regulations in this time of change.

The same speed of change provides opportunities for entrepreneurs. Laurence Fink, CEO of major international asset manager BlackRock, said: "We are changing our approach, if only to reduce the risk of the old way of working." Asset managers are currently actively looking for talented new employees who can work with the new technology. Crypto currency is past the initial stage of development. How long will it take for everyone to start paying with crypto currency?

That is why it‘s important that companies change with the time. Business as usual is no longer an option. As an entrepreneur, you are now standing on the foundation for change. Focus on the now, right this moment. What problem are you going to solve now?

In short, the need to deploy Digital Transformation 4.0 can be traced back to the world we live in. The global pandemic, the political instability, but also the speed of innovation, amplify the usefulness and necessity. In section 1.2, Adjiedj Bakas gives you a picture of the future of society in times of digitization. Gartner emphasizes that organizations have only one item on their agenda for the next ten years: digital transformation2. Jolanda ter Maten then shows in section 1.3 that the real impact of new technology is based on one important pillar.

Much will change in the future because of this decisive moment. You can come out of it as a hunk, a munck or a drunk.

Figure 1.2 I Skate where the puck is going to be, not where it has been” (Wayne Gretzky)

∎ 1.1 DIGITAL ECONOMY 4.0 AFTER COVID-19

Ken van Ierlant in association with Bert Pijnse van der Aa

1.1.1 The battle between the free market economy and the panned economy (The Great Reset)

We live in a particularly special time. One where in many ways 'nothing is as it seems' (if only you look closely) as the Utrecht poet Cees Crone articulated. A time in which people are constantly manipulated and fooled.

Particularly on the concept of 'economy', which is no longer what it was presumed to be. In which the market trader buys and sells his goods on the 'market', the place where trade takes place and where 'profits' must then be made in order to survive, invest, build up reserves and contribute to the society in the form of paying taxes.

Several merchants are active on the market, who offer the same goods and thus compete with each other for the highest price. It will depend on the interest in their commodity/product as a result of the law of supply and demand that has been in force since the Assyrians started trading about 6000 BC.

When it comes to entrepreneurship, as is implied in the word itself, there is a risk involved. Entrepreneurs are people who dare to take risks in competition with others. Just like in a gambling game, they bet their money with the risk of losing it, but also with the possibility of winning. The profit is reinvested by the entrepreneur in the purchase of new and better stock and machines, resulting in 'economic growth', which in turn is a precondition for the prosperity of the country as a whole. After all, entrepreneurs can then hand over part of their profits to the government, which in turn can finance public facilities. This is what Adam Smith must have meant with his Theory of Moral Sentiments - An Inquiry into the Nature and Causes of the Wealth of Nations3. And that was so beautifully translated by Robert Kennedy as "The water rises, it not only rises the great ship, but so do the little boats."

SMEs (small and medium-sized enterprises) play a major role in that mechanism and are the cornerstone of society as such.

Capitalism went hand in hand with the industrial revolution because from that time on, labor would gradually be replaced by capital. After the French Revolution, which more or less coincided with the industrial revolution, a liberal society of freedom, equality and fraternity emerged: an ode to free enterprise and the smallest possible government. But the foundations of that society have been undermined for a number of years. Adam Smith will undoubtedly have written in his "Inquiry into the Wealth of Nations" that certain tasks would permanently belong to the primacy of government, because they belong to the basic conditions for an economy to function. He wrote his magnum opus in 1776 amid the excitement about James Watt's invention of the steam engine. He could not yet know how the industrial revolution would unfold, but he undoubtedly already understood that certain facilities belong to the primacy of the government. As it turned out, this was primarily the case with facility services such as clean water and other sanitation facilities, and later a reliable energy supply. Nor could he have known that 250 years later enlightened minds would break that rule.

1.1.2 Production

One of the first economic sectors to emerge was the automotive industry, which would thereafter become an increasingly powerful - literal - engine of the economy, with links and cross connections to other sectors.

Henry Ford introduced the economics of 'fordism' in which standardization and the assembly line resulted in an astonishing increase in productivity from 12 hours to 1.5 hours for the production of a T-Ford. In short, an improvement by a factor of 10. That was clearly disruptive. Partly thanks to the fact that Ford paid his staff very well, they too could now afford a car, which in turn led to even more production. Capitalism itself had picked up steam and over the decades that followed, it spiraled the economy upward. People increasingly gained purchasing power and were also able to save, as can be seen from the graph in figure 1.3 about the growth of net disposable income in the Netherlands.

Figure 1.3 The development of collectively negotiated wages and the price level in the Netherlands: %-mutation compared to the year before (source: Centraal Bureau voor de Statistiek)

As a result of this success, unions had been able to force even higher wages for the workers who at the same time were less and less needed by the (capital-driven) automation.

The textile industry in Twente first disappeared to move to low-wage countries and not long after, icons of the industrial revolution such as Stork and Werkspoor began to waver. It was in Utrecht, at the Werkspoorkwartier, where the Werkspoor and Demka factories were located, that Herman Bode, the trade unionist incarnate, announced at the end of the 1960s - literally foaming from the mouth - that he would retain the factories and the employment for the Utrecht village of Zuilen, where most of the employees lived. Unfortunately, not much later he had to watch as the factories would be closed and production was moved to countries where wages were much lower. Admittedly the people in those countries did not have the facilities that employees in the Netherlands/Europe now had, such as a health insurance fund and a pension. The race to the bottom had begun.

Meanwhile, aviation had also come within the reach of 'the common man'. To make that possible, the 1948 Chicago Convention established that airlines around the world would never have to pay taxes on fuel. The fact that 'the common man' could now fly at an affordable rate marked the emergence of the tourism industry and a boom in the construction of hotels and resorts around the world.

Due to the mechanism of labor and capital, 'blue collars' were exchanged for 'white collars' who could create more value in offices by selling services; mortgages, insurance and travel. Borrowing money was also made accessible to private individuals. From now on people could buy their own house with a mortgage, which gave a huge boost to the economy.

In the 1990s, house prices rose so fast that people could earn more money for doing nothing than while working. This is known as the 'new wig age'. For that reason, the 90s were the heyday of construction. Not only for many private handymen who bought a house, renovated it and sold it again, but also for the construction sector, because a lot of money could be earned in a short time due to the rapid increase in value. Likewise with the construction of houses and offices. On February 13, 1997, the newspaper Trouw headlined: 'Construction production rises to a record of 105,000 homes.'

The transistor was invented in 1948. This, together with the laser diode, would lead in 1962 to the digital revolution that would provide a new dimension in the economy at the end of the 1990s. And this would eclipse the opportunities to create value in previous periods.

The digital revolution started in the 80's in the music and film industry. Moore's Law made it possible to sample sound/music - convert the analog signal into a digital signal - and to write and read on a compact disk (CD) thanks to the invention of the laser diode in 1962.

On August 17 in 1979, the very first CD was produced in the Philips factory in the German town Langenhagen. As a sample, the CD contains a recording of Ludwig van Beethoven's 9th Symphony, which at a duration of 83 minutes was too long for a vinyl LP (source: website Muzikale ontdekkingen).

It took until about 1985, before the CD broke through as a carrier of music and films and its sales and usage exploded. Not much later, the CD would be mainly used as a storage medium for data when the rise of the personal computer (PC) was tempestuous. From 2000 that development came to a hurricane force and computers could effectively be connected to the World Wide Web (www). If one revolution has been greater than the one that resulted from the invention of the steam engine, it was by far the digital revolution. However, the digital revolution was still part of the industrial revolution, as the driving force behind it is the availability of electrical energy. This also means that as soon as the energy supply (to meet the exponential demand for energy) stops, the current civilization will come to an end.

With the deployment and trend of energy transition, civilization runs a very high risk because volatile energy sources such as wind, solar and biomass are never permanently able to meet the growth of energy at a low cost to serve.

Computers are getting faster, better and more user-friendly every year. The software is getting faster and the applications are getting more extensive. Because of Moore's prediction the number of transistors on a chip doubles every year, making processors faster and faster; the memory space and computing power increase exponentially and more complex tasks can be performed. Developments follow each other at lightning speed. In 2020, 40 years after the digital revolution started with the introduction of the CD player, 2 billion people now own a smartphone, a device less than a centimeter thick that fits exactly in the back pocket of a pair of trousers. With that box people can still make old-fashioned telephone calls, but it also contains a computer that has more computing power than the first mainframe computers, which were the size of a ballroom. Music can be played from it in hi-fi quality and you can choose from millions of songs on the fixed memory or download them from a provider. It contains a GPS receiver that can display your position on an internet browser anywhere on earth. Via a wireless network we are also connected to the internet at almost every place on earth. On the street, on the train, on the bus, on a bicycle and in the car, everywhere we see people deeply connected with the miracle box. Hardly anyone can function without this miracle box. People walk and cycle on the street and meanwhile have conversations in all kinds of languages and generate data in the process. The digital revolution ushers in a new era of progress. It brings new employment opportunities in the hardware and software industry and triggers countless new opportunities to earn money. This is very different from before, because the entire world - 7 billion people - is now a potential customer. Founders of so-called dot.com-companies in Silicon Valley become billionaires overnight. Just with an idea.

We know the concept of venture investors putting money into their startups. They can win or lose, with the probability of winning being a lot greater than losing. It's a mad-crazy time. Look at Israel, where approximately 2,500 seed capitalists have set up 5,000 scale-ups in 20 years without government funding with a listing of 128 unicorns on the stock market indicator Nasdaq. In the meantime, this magnetism has attracted approximately 200 multinationals to Israel to set up R&D centers around Tel Aviv.

Contrary to what is happening in Silicon Valley and Silicon Waddy in Israel, we see that the EU market is saturated and fundamentally lagging behind the big tech in America and the small tech in Israel. In the EU, the number of seed capitalists has been reduced to a handful of players who have no faith whatsoever in politics and the advance of the planned economy.

Many EU startups fail in the technology sector due to a lack of venture capitalists and because everyone is playing it safe and looking to governments for funding. Economic growth has been stagnant since 2000! In 2012, J.P. Gordon wrote a TED-paper titled: Is Growth Over? In this paper he wonders whether the real economic growth of the past will ever return.

Due to a lack of innovation, inspiration and seed capital, we see that these three elements are the reason for the emergence of a planned economy, in which a state-capitalist model that is often based on idealistic and questionable beliefs will gradually be introduced. This is also called the Great Reset. The old laws of supply and demand are thrown overboard and risk capital is exchanged for 'subsidy'. One of the sectors that is fully subsidy-driven is the renewable energy exploitation industry, which could never have arisen without subsidy. Financial engineering now supplants 'engineering' that was prevalent in the previous 250 years. By no longer following the law of supply and demand and replacing risk capital with subsidy, new financial systems are being set up in which banks and large structural industrial parties are nationalized. Financial hocus pocus artificially drives the consumer to where they want them to be. Clinged to big business where net disposable income stabilizes to a basic income provided by the government. Everyone becomes a civil servant.

On November 27, 2017, Koen Haegens wrote the article: "In the new economic reality the state plays a leading role”.4

Money is becoming progressively cheaper, so that the State can borrow unlimited money, culminating in a negative interest rate, which means that the government debt can increase indefinitely (Figure 1.4).

It is now common for universities and governments to have unlimited access to free money to fund their lucrative companies and startups. Thereafter unabashedly competition is entered into with companies that still function according to the old economic laws and that are being destroyed bit by bit. Large industrial companies such as big tech companies (but also small tech companies) are politically framed and discredited. Money is increasingly flowing to globally operating corporate companies that play the game of governments. The result is that SMEs and innovative family businesses are slowly but surely bleeding to death, destroying the DNA of our society.

Figure 1.4 Development of the Dutch government debt from 1900 to 2012

"The Dutch startup scene is not darwinian but a confederation of cappuccino drinking hipsters who are financed by municipalities and banks." (Ken van Ierlant)

It is important that the principles of the free market and entrepreneurship are restored. This means that the 'law of supply and demand' will apply again and that capital will once more become risk-bearing and that the government will limit itself again to facilitating the economy with the guarantee of a reliable energy supply as a utility. It is also important that the entanglement between public and private companies is lifted and that, in particular, the privatization of the public sector is reversed, so that a level playing field is created for entrepreneurs.

The next 10 years will be fundamental. The social and political conflict is being fought over the heads of citizens and consumers. My expectation is that ultimately the system of supply and demand, in other words; the citizen who is central as an innovative entrepreneur, will win this battle. There is a good chance that it will ultimately be a Pyrrhic victory because another world power in Asia will have long since broken through the hegemony of the West.

∎ 1.2 THE POST-CORONA WORLD WILL NOT BE RADICALLY DIFFERENT

Adjiedj Bakas

During every crisis people stand up who shout that the crisis has a cathartic effect and that after it a completely different world will come. We heard that after 9/11 and after the banking crisis of 2008. In practice, however, not that much changed. The post-corona world will not become a sustainable paradise, with only small farmers, windmills and solar panels, free of airplanes, ships and cars. Sorry Greta Thunberg and Wu fans: there will be no brave new world, no Great Reset and no Build better back! The world order of the pre-corona era remains intact, with some differences in emphasis.

1.2.1 Artificial Intelligence (AI) & Facial Recognition (FR)

The digital transformation that was already initiated before corona is now being accelerated: artificial intelligence and facial recognition are now being supplemented with corona apps. They already exist in China and Israel. The apps divide humanity into green people (= not been in contact with the coronavirus and/or an infected person) and red people (have corona or have been in contact with someone who has it). Big Tech is the big winner of the corona pandemic. And don't forget that China has now become a tech superpower (Figure 1.5).

1.2.2 Government more powerful than ever