Opportunities and Risks of Digitalization

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Digitalization has been with us for decades: starting with the exchange of information between educational institutions and the military and automation of industrial production, it has entered our lives in form of Internet, computers and smartphones. In the coming years and decades, many other areas will also become more and more digital: both physical labor as well as cognitive activities could be increasingly replaced. Digital networking and devices will change many areas of our lives - from the planning of a trip, to the purchase of clothing, foodstuffs and electrical appliances to the work in industry and services.

Opportunities: The Good Life, Resource Efficiency, Democratic Participation

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Many hopes are associated with these developments. Smart technologies and digital networks lead to innovations and economic growth. This may make the lives of people more enjoyable. The Internet of Things also allows a decentralized organization of the economy and thus brings advantages for many, while democratizing production and consumption. Digitalization promises efficiency enhancement and dematerialization of consumption. Hence, the environment can benefit from lower consumption of energy and resources. Furthermore, digital information and communication technologies improve the possibilities for participation and new networks of political engagement. By way of better information, consumers can also choose more consciously between sustainable and non-sustainable products. Sharing platforms make it possible to opt for less material and resource-intensive goods and services. This makes it much easier to dispense with your own car if an app shows you the best way with the (rental) bike or public transport. Digitalization, thus, makes it easier to with a lower ecological footprint. And when digitalization also facilitates non-material aspects of prosperity, such as maintaining social contacts and engaging in new communities, this can help change overall consumption needs.

Risks: Unemployment, Monopolies, Ecological Rebound Effects

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At the same time, there are ecological and social risks associated with digitalization: jobs could be lost due to rationalization of labour; market dominance and data collection by global companies such as Facebook, Amazon, Google and others pervert civil rights of many for the sake of profits for a few. Hence, economic gains and influence will increasingly be distributed among a few. For the environment there is a danger that efficiency gains can be offset by rebound effects: because e-commerce, mobility and communication become more efficient, there is more money, time, and sometimes conscience for more consumption. Currently, therefore, the digitalization of consumption does not reduce footprint or help chose more sustainable products, but increases the overall level of consumption. Last but not least, resources and energy are needed to build and operate the digital infrastructure. Already today, roughly 10 percent of global electricity is used to run digital devices, server parks and data centers. This number may climb to 30 or 50 percent by 2030. No doubt certain digital tools help achieve environmental goals, but how much digitalization can the planet stand?