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Digital centralisation: convenience or concern, sensible or suspect?

 

To centralise or not to centralise? That’s the hot question when it comes to our digital landscape.

 

When we talk about digital centralisation, here we’re talking about a couple of aspects. Firstly, the concentration of data or mechanisms in a small number of companies; and secondly, the rationalising of points through which we can access the digital world. Both have seen increased levels of discussion in recent months, and much has been written about the impact of digital centralisation on consumers and wider society, including recent high-profile discussions about data security, concerns over monopolies, and the centralisation taking place within the very framework of the internet. At the same time, there are exciting innovations coming from start-ups and other companies looking to explore the possibilities of what centralised data handling can produce for customers and consumers. Let’s look at the benefits and considerations of centralisation, and a few of the more interesting companies solving problems in this space.

Clearly consumers can benefit from companies having increasingly comprehensive profiles of customer behaviour and preferences. Central databases allow brands to coordinate their engagements with the consumer. Services providers can observe, learn, and anticipate consumer needs based on having access to data. In conjunction with the internet of things, data centralisation creates shorter feedback loops of product test-and-learn, ultimately meaning that consumers receive better experiences, faster.

Beyond the smartphones and tablets rolled out over the last decade or so, smart TVs, home monitors, and many other “smart” appliances have entered into the market. We’re increasingly reliant on a variety of apps in our lives, from our commute in the morning to setting the air con for when we get home. The rise of smart speakers (even if they’re remain towards the novelty end of the tech spectrum) is an interesting step. Companies like Uber and Pizza Hut have already developed branded integrations with Alexa and Google Home – recognising the centralising potential of an access point to end-consumers where screen-time has been removed.

There is a question to be asked around the impact that centralisation has had on the pure mechanics of the internet. As we increasingly access the online world through mobile devices, we are guided into so-called “walled gardens” by mobile operating systems – frameworks within which we can explore. This may slightly curtail the exploratory potential of the internet, in terms of discovering new services, but there are advantages to this new approach too. User journeys and consumer experiences can be closely mapped and reviewed, so that improvements are easily made and rolled out.

Dove and startup Shoppable collaborated in 2016 to bring forward a great example of centralisation, with Shoppable’s patented ‘Multiple Retailer Checkout’, allowing consumers to shop and save products from multiple retailers within one universal check out. Simplified user journeys and paired back processes for consumers created a better solution for the public.

At the same time as this increasing centralisation of platforms, access points, and infrastructure, 2018 has seen interesting technological and social changes driven by decentralisation, particularly in financial services, transport and energy. The last twelve months has seen alternative and cryptocurrencies taking centre-stage, and while the high-volatility of bitcoin and similar currencies may grab the headlines, there are some exciting innovations underway thanks to this technology. Finland’s immigration service have used digital distribution channels to help unbanked asylum seekers get up and running faster in their new country, while individuals can earn SolarCoin as an incentive to generating solar power.

SolarCoin is very much a cross-over between financial services and energy, where there have been great strides brought about by decentralisation. Germany is a fascinating example of decentralised power generation, with homes generating clean energy and feeding it back to the grid. This year, renewables accounted for 41.5% of Germany’s H1 power mix, overtaking coal as the leading generation source. Startups and innovators are already asking whether decentralised energy systems can deliver benefits in terms of cost, carbon footprint, and ultimately improvements for the consumer. There are considerations to factor in, of course, but decentralised initiatives challenging the status quo could be an encouraging sign.

Finally, we’ve seen fascinating developments in transport, where data has been employed to deliver solutions for travellers around the world. Citymapper recently launched Smart Ride, a product built to cover gaps in a city’s transport network based on journey data collected in-app. There are data companies looking to improve existing networks too, like Swedish data scientist Wilhelm Landerholm’s company The Train Brain, which uses algorithms to track and predict public transport delays. The partnership with Stockholm’s train company Stockholmståg has been running since 2015, and will soon be accessible to commuters on the platform via an app.

In this era of digital centralisation, the impact on companies, data, and devices will have a lasting influence on society’s digital habits. From transport to energy, from Facebook to food delivery, centralisation offers opportunities as well as obstacles; what is clear is that the debate will continue to develop, keeping an open mind will allow companies both large and small to gain most from what centralisation has to offer.

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