Finding Value and Concern in the Digital Economy

While it seems impossible to cover every essential technology topic in one day, that’s what the 13th annual MIT Sloan CIO Symposium attempted to do for its 800-plus attendees on May 18th  at the MIT campus in Cambridge, Mass. Titled “Thriving in the Digital Economy,” the event’s sessions focused on topics ranging from the gig economy to big data to the Internet of things (IoT) to security.

A key thread woven throughout this global conference for CIOs and digital business executives was customer engagement. Businesses must “focus on solving the customer’s needs,” said Peter Weill, chairman of the MIT Sloan Center of Information Systems Research and moderator of the keynote “Thriving Through Digital Ecosystems .” “Companies must really understand their customers and amplify their voice.”

Weill pointed to Amazon as a prime example of a company that uses data successfully to gain knowledge about its customers. This approach can result in a win-win result: happier customers and better bottom lines.

“If you’re effectively leveraging data, you’re providing products and services your customers want, and you’re producing products that make business sense,” added panelist Rob Frohwein, CEO and co-founder of Kabbage,  a company that provides online loans to small businesses.

Big Data’s Challenge: Security

Big data analytics is clearly essential for leveraging data. However, Anthony Christie, CMO of Level 3 Communications and a panelist on the “Big Data 2.0” session, advised the audience to get rid of the “big” in “big data” and focus instead on data insights.

Of course, you can’t discuss leveraging data without bringing up the big challenge at the center of it: keeping data safe and private.

“Security and analytics are two sides of the same coin,” said panelist Robert Thomas, vice president of product development for IBM Analytics, “and we can use analytics to improve security.” He added that on the big data maturity curve, we’ve moved from cost-cutting to analytics and cognitive computing.

The Internet of things (IoT) is creating new security problems, according to Ricardo Bartra, CIO for the Americas, DHL Global Forwarding. Despite these ever-growing challenges,  he stressed that “We must be accountable to our customers.”

One approach to the security issue that the panel discussed is the idea of letting people get algorithms and answers from data without being able to access the data itself. This approach, they said, would have a positive impact on security.

“I don’t think there is a complete security solution in place today,” said Christie. “What we need is a culture that can deal with security.” And that culture should include regulatory compliance, localization and privacy.

Dark Side to the On-Demand Economy

Though technology issues and trends dominated the symposium, the second keynote, “How the On-Demand/Gig Economy Is Redefining the Future of Work,” focused on the tremendous changes that are affecting the workplace now and will even more in the future.  

The on-demand, or gig, economy is growing rapidly and is having a profound impact on the American workforce. Alternate work arrangements result in more employees becoming independent contractors or freelancers, choosing (if they have a choice) flexibility over security.

“Changes in technology allow lower transaction costs and disintermediation, resulting in company like Uber and Airbnb,” said David Author, a professor of Economics at MIT.  He pointed to “the coordinating power of smartphones and GPS technology” in the operation of these types of companies.

The impact on workers is significant, as some companies may decide to pay workers only when they need them. The panel posited that high-value, high-volume, highly skilled employees would be secure, but more peripheral, less skilled employees could be in jeopardy.

“There’s a dark side to the on-demand economy,” warned Paul Osterman, NTU professor of Human Resources and Management at MIT Sloan. “It’s costing workers quite heavily—forcing some employees to become contractors.

“Companies should treat their workforce as assets—human capital, not disposable capital.”