The next 10 years will be known as the “ecosystem” decade

There are plenty of sites offering predictions for the coming decade, however I can’t help but throw mine into the mix as well. I think the coming decade will see a slow and subtle shift that will truly change the world, much like the ubiquity of smartphones and 4G networks did in the last decade.

I believe in the next 10 years we will shift from a focus on building things that connect to the internet to building ecosystems that supports value creation from the data we can gather from those things. That will mean changing business models, metrics, and practices to support new ways of using data. Much like the church had to adapt to the knowledge that the sun did not revolve around the Earth in Copernicus’ day, we must prepare ourselves for a seismic shift in beliefs and practices.

Thanks to connectivity, cheap sensors, and a drop in cost associated with massively capable analytics, we’re entering an era where all kinds of information — including details about our deepest personal lives to highly competitive manufacturing processes — can be used to draw conclusions. Those conclusions might be beneficial, such as using medical data to track the spread of a disease, or harmful, such as using health data to determine which employees in a particular company might be most productive.

The use of sensor data with an eye toward extracting profits at any cost has already led to concerns about how IoT and data can be used to harm society. We’re seeing this realization dawning thanks to books such as Shoshanna Zuboff’s “The Age of Surveillance Capitalism.”

On the consumer side, efforts by the media to find out what types of data companies have on us are also providing a glimpse into our near-term future. Tech columnists are trying to draw attention to a lack of privacy and an inability to control individuals’ constant streams of data from their devices and web searches. Absent laws or a decision to abandon technology altogether, consumers are incapable of truly protecting themselves from corporate misuse of their data.

The issue is becoming apparent on the industrial and enterprise side as well. I’ve long worried about the types of surveillance cultures that corporations could subject employees to, but now it seems that companies are also looking at their partners and vendors and wondering how much information they have. Worries about data sharing began to arise in contract negotiations in 2018, and we’re only in the beginning stages of figuring out how to share data between suppliers in a manner that can be trusted by all parties.

I believe in the coming decade we’ll see companies try to create ironclad NDAs around data sharing, attempt to build trust between partners at a technical and legal level — and then realize that much of these efforts won’t scale. At that point, we’re going to see companies test the waters by building ecosystems that share data and share in the value generated by the insights gleaned from that data.

But to do that, we’re going to have to stop thinking of data as an asset that will give one company an edge over the other, and start thinking of the insights data can deliver as accruing to several entities. These entities might be consumers who share or donate their digital health data in exchange for access to new drugs, or manufacturing partners that share inventory data to make sure a strike by dockworkers doesn’t delay their manufacturing process. The shift will focus less on individual transactions and more on building sustained relationships.

Seeking reams of information about an entity only to get them to pay the highest price possible for goods and/or services is a short-sighted way to operate. Companies are now realizing that to deliver the real efficiencies and value associated with the internet of things, they must stop thinking about business from a transactional perspective and instead think about it from a relational perspective.

Dr. Irene J. Petrick, senior director of industrial innovation in Intel’s IoT group, said as much last month in a podcast interview with me. “There’s real uncertainty about how do I share data with third-party providers and what do I put into my vendor contracts to support that,” she told me. She said negotiating those relationships has been fraught for companies that are unsure what might happen to their data if one of their partners goes out of business, or if a partner with their data is purchased by a competitor. Petrick said that, until very recently, purchasing departments have been negotiating contracts on a transactional basis, but now we have to start thinking about building these contracts on a relationship basis.

This is a conclusion she’s come to based on two years of research with manufacturers while at Intel. And she isn’t alone. Recently, the CEO of Packet wrote a blog post about the new era of digital transformation and what it means for how his company does business.

[D]ata, like oil, is indeed a mercurial commodity. While valuable, the means of extracting it and (especially) monetizing it, can be short-sighted, risky, and even predatory. Rarely is the full cost understood during the upfront transaction.

We can see it already: Data frackers are getting extremely good at finding (or creating) fissures to exploit…weak points and honeypots that promise super-cheap prices or free services. And once they’re in, they have access to what they really wanted in the first place: Your data.

In my opinion, that approach is not one to stake our future on. It’s a wrong approach to go drilling where you shouldn’t, or without thought to the long-term costs and consequences. While the investment may yield short-term profits, assets that you grab with no purpose other than to monetize them tend to lose their value quickly. The well, at some point, will almost certainly run dry, or you’ll leave a SuperFund site to your grandkids.

This is the sort of mindset we see emerging at forward-thinking companies. And in the next decade, I think we’ll see more and more businesses fail at the transactional model. Meanwhile, those businesses built around relationships and trust will begin to thrive and as a result, get access to better data and more interesting opportunities.

Business has always been about relationships, and to pretend that it’s only about money or those with the strongest hands is to celebrate an almost nihilistic philosophy that might do well in Ayn Rand novels, but has led us down the road to a dystopia where people are surveilled primarily to extract their maximum economic value. That’s not sustainable, nor should it be something we aspire to.

It’s time we nurture an ecosystem approach to business.