CMN170V Final (5th &6th sessions)

innovation

the creation of new combinations (taking things we already have and recombining them in new ways)

digital traits

characteristics that describe aspects of the digital paradigm (of digital communication, storage, and computation and their traits)

- these are the traits that we are recombining

- it is a distinguishing characteristic or quality

traits & new combinations of them

what are the 2 elements of innovation?

building it yourself and true understanding go hand in hand

not all new combinations of building blocks serve us as a society

invention

new combinations in the realm of PRACTICAL/TECHNICAL possibilities

innovation

new combinations in the realm of ECONOMIC/SOCIAL possibilities (meaning socioeconomic possibilities)

-derived from the SUPPLY of inventions (by entrepreneurs and managers) to satisfy DEMANDS (and make profit)

-you have a supply of all the things you could recombine and you recombine things that are socially useful to satisfy demands (things people value)

-dependent on HISTORICAL CONTEXT (path-dependent, customs, culture, skills...) & CURRENT CONTEXT (regulations, institutions, perceptions...)

-Socially constructed

innovations are:

not all inventions become innovations

-invention refers to practical/technical recombinations

-innovation refers to economic/social recombinations

-innovation creates value from inventions

the difference between invention and innovation is that:

We come up with some new combinations of the realm of the technologically possible, and with that we then start to understand more what it's actually about and we define these building blocks better and that then accelerates the entire process and things go extremely fast

-We socially construct the value, but not everything that shines has a goal for social purposes, so we select some that has to do also with the cultural and historical context in order to create value for society socially constructed

-we make the way while we're walking and with every step we're figuring out even how we walk

1. transformation of information in spacetime (computation)

2. transmission of information through time (storage)

3. transmission of information through space (communication)

what are the three fundamental things we can do with information in our universe?

communication

transmission of information through space

storage

transmission of information through time

computation

transformation of information in spacetime

Death of Distance

refers to the phenomena that modern telecommunications basically goes over distance, meaning we don't have to worry about distance anymore

-fundamentally affects our perception of reality since distance was traditionally not dead and our technological advancements made us realize different aspects of reality

Death of Distance example

railroads

-When we introduced the railway, it was for the first time that we could actually travel so fast that it started to affect our understanding that maybe there should be time zones because we go faster than the sun (we don't deal with this with walking or riding horseback)

Death of Distance example

transatlantic

-The first Transatlantic cable brings the world closer together all over the globe

telecommunication

digital distance communication

-travels at the speed of light

-we cannot communicate information any faster

with bits traveling close to the speed of light, we have approached the limit to the physically possible

Timeless Time

the social practice that aims at negating sequence to install ourselves in perennial simultaneity and simultaneous ubiquity/omnipresence

-you can do it in real time, but you don't have to

-you can do it synchronously (real-time) or asynchronously (you can communicate here in real time, or you can store it and run it later)

combining synchronous and asynchronous processes allows to negate temporal/time-related sequence

Timeless Time refers to the fact that:

Poly-directionality

means basically that with digital technology, thanks to the convergence on the bit, you can implement what have been previously separate communication modes now on one single platform

telephone, personal letter

examples from one to one

printing press, radio, tv, speech

examples from one to many

election, applause, survey, auction

examples from many to one

notice board, meetings, gatherings

examples from many to many

liking of a post

what is an example of a many-to-one communication in online social networks?

network structure

the most prominent characteristic that gives shape to digital communication is the:

The Internet

simply the way computers connect to each other in order to share information

World Wide Web

like a big virtual city where we communicate to each other in web languages with browsers acting as our translators

-no one owns the web, it belongs to all of us

Tim Berners Lee

-He understood that we needed a way to organize information that mirrored the natural arrangement of our complex mind webs. The web accomplishes this through hyperlinks.

who was the founder of the world wide web?

closeness centrality

a mathematical term that describes who is the center in a network. (the person that's closest to all the other members of this social network)

degree centrality

center can be the one with the most connections, the most connected person in the social network

the importance of the particular structure of the underlying network

the concept of the "space of flows" refers to a reconceptualization of space due to (among other things):

Network Externalities (or network effects)

when the value of a product to one user depends on how many other users there are, economists say that this product exhibits ___________________

depends on how many other users consume it

Network Externalities of a product or service refer to the fact that its value to a consumer:

negative network externalities

the law of scarcity; the more people use it, the demand goes up and then hopefully the supply has to catch up

-example of Apple

positive network externalities

means that the value of the product increases the more users there are

-example of the telephone (the more users use the telephone, the more valuable it is for me)

positive network externalities mean the more people, the more benefit for everybody

what is true with regard to positive and negative network externalities:

Interoperability

making sure that all my different network members can talk to each other

hub-and-spoke/star network

much more efficient network that has one intermediary step

-linear growth

direct/point-to-point network

network where you can connect directly from each system to each system

-exponential growth

With the platform economy, in order to have the digitalization, sending info up, and algorithmification, sending info down, you need some kind of hub-and-spoke network if you want to make it scalable, and then once you have that, whatever new technology comes your way in the future, you just plug it into the hub/star, instead of having this new software that you have to connect to all the other ones

Media Richness Selection

a pretty old theory that basically says that the complexity of the information that you want to communicate should determine what kind of media you want to use, and the media is the message

-You don't need a medium with such high complexity if you have low complexity information. However, if you have a high information complexity then you would need a medium with high complexity

- handle multiple cues simultaneously

- facilitate rapid feedback

- establish a personal focus

- utilize natural language

media richness is the ability to:

video-conferencing

According to media richness theory, which of the following communication channels would be best suited when discussing essential business decisions that define the future of a company?

Digital Footprint

All of the information about a person that can be found online that you inevitably leave behind with every digital step you take

-increasing this can allow for much more powerful predictions about us

n = N

basically the ambition of data companies that say, as default, collect everything. The digital footprint is produced anyways, so you just connect everything, meaning you don't have to sample

the small n usually stands for a small sample of the larger universe of all subjects N

In most digital footprint studies, there is no representative random sampling going on, it is just a footprint

No sampling: N (the totality of observations) = n (the sample)

Economies of Scale

traditionally, if you produce some kind of product, you have a fixed cost to produce it and you have a variable cost. __________ is when you produce many of them, the variable cost will go down.

-"Cost can also be "time investment" (of writing letters, training an AI, etc)

-rent or purchase of real estate for production facility

- payment of fixed salaries of managers and secretaries

-rent or purchase of production facilities like conveyor belts

-rent or purchase of business intelligence software, including ERP, SCM, CRN, and/or AI based machine learning packages

-cost involved in creating and maintaining global contacts for distribution channels

Think about the footwear industry. Here Nike is clearly larger than its closest competitor, Adidas. Looking into it, we are likely to discover that it's on average cheaper for Nike to produce and sell a pair of sneakers (even if we'd imagine it'd be exactly the same pair). What are the reasons that contribute to this "economies of scale" advantage?

fixed cost

Producing a product, like a car, requires an initial investment. For example, you, as an entrepreneur, need to pay a fee to register your business. This fee is independent of your plan to start producing much or little. Is this fee an example of a "fixed cost" or a "variable/marginal cost"?

variable/marginal cost

You increase your production and have to ship out many more packages now. The cost of packaging and shipping physical items is an example of:

It depends on if these payments remain unchanged or change with the production output

You employ different professionals in your company. Some of them, for example the secretary, the Vice-President, or your tax accountant, get their money independent from your productivity output. Others you only employ when they are needed, like those paid by the hours (like servers in a restaurant or production personnel). Are these kinds of payments an example of fixed cost or variable/marginal cost?

Digital products are 100% fixed cost. There is no variable cost. (a digital product is very different from a physical product)

Non-fungibility

economies of scale that you can infinitely copy and paste is challenged by ____________

non-fungible tokens

Can make a copy, but there's only one original (there is a value to the first, original one)

Data-fusion

means that there's data from different sources, and you merge them together

-makes use of complementary data sources to fill our missing data points, including different kinds of sources, such as images, audio, and video

data lake

when you bring all the data together

-the contents of this stream in from a source to fill this ______, and various users of the ____ can come to examine, dive in, or take samples

What defines a data lake is data in its raw form, and then what we talk about when it's clean, we talk about a data hub

This process inevitably creates biases because how you clean the data is also what you are after, and you can go back and clean it a different way. It reduces the amount of information you have, it inevitably reduces the amount of information, but the benefit is that it makes it actionable

data lake contains raw data, while data hub clean/standardized data

the difference between data lake and data hub is that:

data lake:

-raw data

-secures all data

-easier/cheaper storage

-easy reading (requires other tools to analyze)

-good as an exploratory sandbox

data hub:

-harmonized data

-provides actionable data

-easier/cheaper aggregation and analysis

-easy writing (on top of the lake or directly connected)

-good for actionable governance

Exposure Selection

"selectable" degree of privacy/identity

-facebook example

- Someone who revealed the extent of the US government digital surveillance programs

- Edward Joseph Snowden (born 1983) is an American whistleblower who copied and leaked highly classified information from the National Security Agency (NSA) in 2013 when he was a Central Intelligence Agency (CIA) employee and subcontractor. His disclosures revealed numerous global surveillance programs...

Who is "Edward Snowden" again? What happened in 2013 which had an important effect on people's perspective of the digital age?

Scalable Modularity

you have different modules of code and you store them

-With digital economies of scale, you can just copy and paste

-You create a library of these expensive building blocks that you created, and then by copying and pasting them, you can reuse them, and the more you reuse them, the more values you get out of it

Think big, start small & scale fast

-Standing on the shoulders of smaller digital building blocks

-you now have these building blocks and you can adapt them to new contexts

Machine Learning

Data input + goal output → computer → algorithm

Deep Neural Network (Deep Learning)

solve the problem of computer vision, also of language and many other problems that AI excels in

-learns by processing over different layers

-It makes a prediction of something else

n=1

mass-customization

n(sample selection of the totality) = 1

Porter's competitive strategy 1980

If you want to have a competitive edge over your competitors, you have 2 choices: you can differentiate (customize) or you have cost leadership (mass production)

Example:

-You can individualize (you can go to the barista and have the drink made exactly as you like it; it might be a bit more expensive but it's individualized and there you have a competitive advantage) or you have cost leadership (you just go to a vending machine and you get a coffee out of the vending machine; one size fits all; much cheaper; but if you specialize in this you also have a competitive advantage)

Can have mass customization (can have both)

-Example: When your existing Amazon account gives you a recommendation on which books to read next, do they use information from other previous customers or information from your past shopping behavior?

Both from previous customers and from your past shopping behavior

Regulation by Objectives

regulate the output

-FDA for Algorithms

-make sure to socially construct algorithms that minimize potential downsides

Knowledge greyboxes

the "end of theory"

-Big Data, as long as it's big, doesn't need to know why and how. It will still win in the economy. We don't need to understand why an algorithm does something. It will have a competitive advantage

What-if scenarios

Especially important for policy-making and for intervention

-Algorithmic trading requires simulations

-SimCity example

Presence/Visualization

visualizations of computer simulations allow to communicate complex dynamics more intuitively

-intuitive explanations

-intuitive evironments

Programmability

Programming social processes, finding other ways of doing things

-a characteristic of many innovations

-smart contracts are the epitome of ______________