“Don’t believe the hype”

To counter the adverse effects of digital structural change, we need an inclusive digitalisation strategy

Philipp Fink, photo by DGB

“Digitalisation has been affecting us since it came to wider use in the 1950s,” says Philipp Fink, programme officer at Friedrich-Ebert-Stiftung in Berlin. “Today, we must act with the aim to maximise the social benefits of digitalisation by ensuring maximum of participation.”

Moderator of a panel on work and digital casualisation at #Digidemos, the Congress on Democracy and Digitalisation organized by Friedrich-Ebert-Stiftung in June, Philipp met with FES Connect to share his views about a few questions on digitalisation and the changes it brings to different facets of our everyday life.

FES Connect: “Digitalisation” is on everyone’s lips, but what exactly can be understood by this notion? How does it affect our daily lives?

Philipp Fink: That is the interesting thing about digitalisation. It is ubiquitous, but at the same time it has different meanings, depending on what is being digitalised. Essentially, it is a mathematical process, whereby analogue objects are represented by binary code. However, at the end of the day this process can result in increased efficiency, which is normally associated with digitalisation. So, processes and actions can be done in shorter time. A classic example is the email. Before it was invented, we could communicate over long distances by phone, by wire, by post and later by fax. Email allows in most places almost instantaneous communication, regardless of the distance. Further, existing processes and actions can be redesigned or they can be invented through digitalization, creating new products or applications.

The more digital processes have permeated our lives since the 1950s, the faster we have not only been able to gather and create information (regardless of its use or notion), but also the more help we need to process the information—therefore creating demand for new products and applications.

You work on climate, environmental and energy policy in the department for economic and social policy of FES in Berlin. In this position, you also coordinate activities that address the topic of digitalisation. In what way does this topic occupy your day to day work?

PF: Well, my area of work covers the areas of energy, climate, environment and structural policies. When I started working at FES, digitalisation still seemed to be seen as a high brow topic for specialists—it definitely was not high on the political agenda and in the focus of mainstream attention. That has changed, at least in Germany, with the commencement of the so-called industry-4.0-discourse, six or seven years ago. Now, digitalisation is everywhere and is part of almost every policy field—be it for health, industrial, education or energy policy.

Your work spans across different sectors, what can you tell us about the cross-sectoral character of digitalisation? Where do you see the possibility of digitalisation contributing to climate, environmental and energy policy? To which other areas of policy can digitalisation add value to?

PF: I do think that digitalisation is an important tool to process the vast amounts of information needed for instance, in controlling the electricity grid or trying to predict climate change effects. There is enormous potential for energy efficiency in e.g. the further development of smart metering systems, home automation, and synchronizing electricity demand with supply in the context of the transition to non-fossil energy sources in Germany. Likewise, public services can be rendered more efficiently and effectively. The potentials accruing to increased digitalisation in education and health policies are similarly huge.

Digitalisation has undoubtedly facilitated many advantages in our lives. Do you have a favourite?

PF: Anything to do with communication and information. I can stay in touch with friends, regardless where they live. I can inform myself about events far away from Germany and I can send you guys in Bangkok [where part of the editorial team of Connect is based] the answers to your questions within seconds (let’s forget about the different time zones for a minute).

Despite the many advantages, where do you see challenges arising which we as society will have to deal with digitalisation in the near future?

PF: There are several challenges. The first centres on the issue of individual sovereignty in the information age. How do we process the vast amounts of information we can gather and produce through digitalisation? Can we trust it and how does it influence us in our decisions and actions? Do we know what happens to the information we intentionally and unintentionally produce?

The second big challenge relates to the aspect of efficiency gains. At the work place, digitalisation is used to increase efficiency in production and therefore as a tool for rationalization. The result is structural change. On the micro-level at the work place we have to be clear that this process means that workers will be substituted, skills will be downgraded or become superfluous. At the same time, new jobs and skills will be created. How do we address an increasingly polarized labour market and workforce? Furthermore, on a meso and macro level as always with structural change there will be a spatial shift. Regions with industries profiting from digitalization will prosper. How can we battle the adverse effects of digital structural change? In a global context, what does the possibility of relocalisation of production back to industrialised countries mean for the Global South? Which development paths can they follow? Finally, the third challenge relates to the detrimental effects of inequality. Those people, firms and regions, which control the production of digital technologies and their use as well as those which can access and utilise digital technologies, will increase their market power and their market revenues. However, this is nothing new. Rather, the process of digitalisation amplifies existing inequalities pertaining to economic, social and power structures.

What can be done to address these challenges?

PF: First of all, to quote Public Enemy, “don’t believe the hype”. Digitalisation has been affecting us since it came to wider use in the 1950s. It is not something which has just recently come into existence. As a recent OECD study shows, there have been various waves of digitalisation with the current push taking place since the mid-1990s that includes the invention of the smartphone technology and the rise of social media. As always with structural change, it cannot be stopped. Instead, it can be steered and the adverse effects mitigated by for instance devising and enacting an inclusive digitalisation strategy. The aim is to maximise social benefits of digitalisation by ensuring maximum of participation.

In this sense, digitalisation is understood to be an instrument of social innovation, which affects the actions and decisions of individuals. This implies a strong role for the state, setting standards, supporting innovation, utilising digitalisation by its procurement and therefore creating markets for products and applications as well as fine tuning its policy fields e.g. in education, towards utilising digitalisation.

FES has published studies on this path (links in English, Policies for Innovation in Times of Digitalization and Social Innovation Policy for Industry 4.0). Furthermore, we need an open and interdisciplinary monitoring and a debate on digitalisation. FES has for instance organised international conferences on key issues related to digitalisation. The next one, Digital Capitalism, will take place in November. I’ll keep you posted. ###

Philipp Fink is programme officer at the Division for Economic and Social Policy, Friedrich-Ebert-Stiftung in Berlin.

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