Leapfrog Progress for S.C.? Focus on Innovation/Digital

Leapfrog Progress for S.C.? Focus on Innovation/Digital

For hundreds of years, we in Western society have thought about things with a lineal and increment mind set. Progress – in society, commerce, science, engineering, etc., – was believed to be something that happens sequentially, usually slowly, with one step leading to another. This mindset is embedded in how we think about things and express ourselves “steady as she goes… one step at a time… the tortoise wins the race, etc.”

Yes, there have always been breakthroughs that brought big change but they were rare and it usually took years for the effect of the breakthrough to have a widespread impact throughout the general population. But digital innovation has now changed everything. A few examples:

Adoption: When electricity was first harnessed in 1873, it took 46 years for it to reach 25% of the U.S. population. The first television was invented in 1926 and it took 26 years to reach this 25% mark. The first mobile phones hit the market in 1983 and only 13 years later 25% of us had one. Invented in 1991, it took the internet only 8 years to reach 25% of the U.S. population.

Nature of Business: Consider this – the largest transportation company in the world, Uber, has no cars or trucks. The largest accommodations company in the world, Airbnb, owns no hotels or motels. The largest photography company, Instagram, sells no cameras or related products. The largest US retailer, Amazon, has no stores. The largest media content company in the world, Facebook, produces no content.

Companies Growth: Uber began in 2009 and in five years their valuation of $66 billion was greater than General Motors, Ford or Honda. Airbnb began in 2008 and has a $31 billion valuation, greater than Hyatt or Inter-Continental Hotels. Instagram started in 2010 has a $37 billion valuation and Kodak is now bankrupt. Facebook began in 2004 and its current valuation is $430 billion. And the ‘old digital company’ Amazon started in 1994 and is now worth $959 billion and Walmart’s valuation is $78 billion. 

OK, you say, but what do all these “gee whiz” numbers have to do with us in South Carolina?

The answer is a lot. Because just as a society can make leapfrog jumps in its adoption of technology and digital companies can make leapfrog jumps in terms of size and value – so too can a country (or state) make leapfrog jumps by focusing on digital technology.

One example: Estonia.

When the Berlin Wall came down in 1989 and the counties of Eastern Europe were freed, this tiny country of 1.3 million people in northeast Europe (just south of Finland and west of Russia) was a dull, gray country with its backwater economy in shambles and a very bleak future. But Estonia was different from its other Eastern European neighbors – they had innovative, committed leadership that convinced the people of the country to focus relentlessly on digital technology.

First the leadership. Before the fall of the Berlin Wall, Toomas Ilves was a young man living in Munich working as the Estonian language news reader for Radio Free Europe. Though he had grown up in New Jersey (that’s a whole other story) he was committed to Estonia and when the Wall came down, he moved to the country and quickly jumped into Estonia politics. In no time, he was Estonian’s ambassador to the U.S., the European Union, Foreign Minister and from 2006 to 2016 he was president.

(Full Disclosure: I first met Ilves in the late 1990’s when he was leader of a struggling little political party and I was running a struggling little internet company in the civic and political sector. We have worked together on several projects over the years and I am huge fan and I don’t pretend to be objective about either him or the wonderful things that his county has achieved.)

Second the policy. Ilves convinced a small group of young politicians from across the political spectrum to focus everything they did on promoting the internet and new technology in every part of their economy and society. They bet the farm – and it paid off.

  • The whole country is totally wired with super high-speed access; you can even connect in the middle of the forest. Cell phone penetration is 120% and the monthly cost of unlimited data access for an iPad is about $10.
  • Schools, teachers and parents are seamlessly and constantly linked online so that the teaching of children is a true partnership, with each child’s progress measured and fostered in real time among all those involved.
  • Virtually every government service you can imagine is ‘e-enabled’ to empower citizens to become active participants, not just passive recipients. Governments at all levels provide services faster, more efficiently and at less cost – all delivered 24/7.
  • Over 95% of people file their taxes online and the average time to complete the whole process is about 5 minutes.
  • In the last national election, over 25% voted online.
  • Electronic ID cards with digital signatures enable transactions at lighting speed and entrepreneurs can establish and register a new business online in less than 20 minutes.

In the business sector, their crown jewel, so far, is Skype. Started in 2003 by a handful of smart Swedish and Estonian kids, nine years later it sold to eBay for $2.6 billion and in 2011 was bought by Microsoft for $8.5 billion.

In 2007, Russia launch a cyber-attack on Estonia (Estonian and Russians have hated each other for hundreds of years) and they were beaten back so completely that NATO turned over huge portions of its cyber security to Estonia.

And on and on it goes through out virtually every sector of a rapidly growing Estonian economy and society. Today their economic growth rate is among the highest in the European Union, there unemployment rate among the lowest and their personal income growth is soaring.

So why should South Carolina care? The parallels are obvious.

We are both relatively small and historically we have been comparatively poor and have both suffered from political leadership that has failed our people.

But, in the last 20 years, while Estonia has made leapfrog jumps, South Carolina has made only incremental progress.

The keys to success in the future are obvious – a laser like focus on technology beginning with schools, an unfaltering belief that our future can be better than our past and new leadership that inspires its citizens to dream big and take chances.

We in South Carolina have it within us to do this too. We really can.

The question is will we?

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