A critical look at new technologies – Big Data, AI, Blockchain and IoE

New technologies are a key driver of digitization

They make digital networking between people and machines possible in the first place. New technologies are changing our world. Accordingly, it is important for companies to continuously monitor innovative trends in order to identify and exploit opportunities for increasing efficiency and optimization potential at an early stage. But where there is light, there is also shadow. Today, we therefore take a critical look at some new technologies.

Big Data – The New Money of the 21st Century

Professional data collection and evaluation is the basic prerequisite for successful digital transformation in all companies. We all produce data at the speed of light. That is why data also plays a central role in numerous companies, for example in the development of new business models. It forms the basis for a wide range of modern digital products and services designed to secure the future viability of companies. On the other side of the scale is the question of how to handle this data. How is it collected, evaluated and, not least, further utilized? In 2018, the EU wanted to shed light on this gray area. The ever-popular General Data Protection Regulation (GDPR) is now intended to ensure the protection of personal data within the European Union. However, there are still many criticisms more than two years after its introduction. One thing is certain:

However, customers pay for many of the services they claim to use free of charge with their data.

There are enough examples. Facebook, for example, offers a free and very simple way to create profiles. The data stored is used, for example, to target advertising within Facebook (and also outside, see the Cambridge Analytica case). Incidentally, this is how Facebook generates its billions in profit. After all, the customers get a free Messenger in return…

A second point of criticism is the safekeeping of the data. Even among digital experts, there is a great deal of uncertainty as to what is still permitted and what is not. How the collection and handling of data should proceed in a legally secure manner.

The hacker attack on Twitter has shown that it is a mistake to believe that the information on our accounts is stored 100% securely. This is the uneasy feeling we have to come to terms with in the 21st century. In the past, we were responsible for the security of our own wallets. Today, in many cases, we have transferred this responsibility to companies that collect and exploit our data. Professional and responsible handling of this data is essential with the rapid development of new technologies.

Machine learning and AI algorithms on the rise

Another important key factor of the Digital Transformation is Artificial Intelligence. Machine learning and artificial intelligence have a significant influence on data collection and analysis. The large amounts of data collected can not only be analyzed and evaluated with the help of AI, but they also help to identify certain patterns and gain important insights. Platforms such as Amazon, Google or Alibaba are focusing on these technologies because they already have enormous amounts of data and can therefore train and improve their AI systems more quickly. This allows them to differentiate themselves even better from the competition. Artificial intelligence has been under development since around the middle of the 20th century, but only now, more than half a century later, is everyone starting to realize what this technology can unleash in the future. Until now, criticism of it has tended to belong in dystopian science fiction literature. But possible abuse scenarios are becoming more and more concrete, for example with the development of image recognition and generation by AI. It is already possible to transfer faces with believable facial expressions in videos to other people’s bodies. This capability alone opens up a multitude of possibilities for misuse. For example, to spread fake news in order to shake up political security and stability in the world – and we don’t mean fake news in the sense of Donald Trump.

We note: it is not the technology itself that is disruptive, but the possibilities for misuse are enormous. From the hacking of AI-driven systems, such as vehicles or autonomous weapons, to the arms race in cyber security issues – many things are conceivable and probably already possible. The dimensions are still unimagined and indeed limited only by our imagination.

The potential of blockchain technology

Blockchain technology (Blockchain and smart contracts explained) and Bitcoin cryptocurrency are often equated. The basic technology represents a decentralized and distributed registry that stores business transactions in blocks. These blocks are arranged in a chain and distributed in the network, thus forming a blockhain. In the business world, the added value of traceability can be applied to many businesses. For example, the jewelry industry can benefit from storing all manufacturing steps in the blockchain, from the diamond mine to the sale to the end customer. This creates more trust and transparency in supply chains of all kinds. Unfortunately, the technology devours gigantic data and energy resources in the process and cannot yet be linked with complementary technologies such as artificial intelligence. Therefore, this technology still lacks a meaningful and concrete application in current and future business models – yet.

The Internet of Everything (IoE) has arrived in everyday life

While blockchain technology is still in its infancy, the networking between machines and people in everyday life is advancing with giant strides. In 2019, the frequencies for the fifth generation of mobile communications (5G) were auctioned off in Germany. However, an improvement has not yet become noticeable in everyday mobile communications. Even before the radio masts can be equipped with the new technology, providers such as Deutsche Telekom have to spend vast sums on the rights to use the 5G frequencies. The money spent on the rights of use is then naturally lacking for the fastest possible network expansion. In addition, there is some uncertainty in Germany about technical equipment for 5G from China. The equipment supplier Huawei is alleged to have close contacts with the Chinese government and to pose a cyber security risk from the USA. On the other hand, there is still no clear exclusion of Huawei on the part of the German government. It remains to be said, even if the technical capabilities are fully operational, it may be thwarted elsewhere – finance, politics, competition, etc. But it is already predictable: When the network of the future is in place, it will act as a catalyst for the Internet of Everything. Increased network flexibility with integration of AI will catapult communication between humans and machines to a completely new level, both qualitatively and quantitatively. The benefits of enormous simplifications in everyday life are obvious. At second glance, the linking of data from a wide variety of devices used in everyday life, such as smart watches, smart phones, smart TVs, voice assistants, etc., makes it possible to create very detailed profiles of people. From the consumer’s point of view, however, the data processing is very intransparent, even if the companies make an effort to keep their data protection declarations up to date.

Cross your heart!
Who takes the trouble to read these page-long documents carefully?

In the future, companies will also have to deal much more intensively with the issue of security risk for end consumers. There are several dangers:

  • Hardware: the interaction of the devices takes place with the help of sensors. These sensors can be disturbed, malfunctions occur.
  • Network: when information is exchanged, there is a risk of manipulation from the outside, so that the devices can perform unwanted actions.
  • Back-end and cloud: use of outdated software poses a high risk of misuse. Regular and timely security updates are a must.

Summary

New technologies are entering our everyday lives only seemingly slowly – primarily to make our lives easier. Data is collected, stored, shared and analyzed. Awareness of data protection and the transparent handling of data must continue to grow. It must be the focus of both companies and end consumers in order to be able to deal confidently with the accompanying challenges. Only in this way can we consciously weigh up the pros and cons and shape a secure future with new technologies. It remains exciting.

Inga Schmidt has specialized in the topic of the Internet since 2005 and has built up extensive knowledge in this area during her professional career at various companies, such as online marketing agencies and management consultancy for digital transformation. She focuses on consulting and operational implementation of online marketing for companies of various sizes and areas of activity.

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