What happens to our world when information turns into vapor? This book explores how digital technology is reshaping industries, redefining jobs, and creating a cloud-based economy.
1. Information Transforms Like Water: Solid, Liquid, and Vapor
The evolution of information parallels the states of water: solid, liquid, and vapor. For centuries, human knowledge was stored in solid forms, like books and CDs. These forms were durable but costly to produce and distribute, and they restricted access to knowledge to one person at a time.
The arrival of the internet and digital devices transitioned information into a liquid state. Digital files became easy to share across the globe at the click of a button, bypassing the physical limitations of traditional media. This groundbreaking change allowed knowledge to flow like water, reducing costs and increasing accessibility in an unprecedented way.
With the rise of smartphones and cloud technology, information now exists in a vapor-like state. It's mobile, omnipresent, and instantly accessible. This gaseous state of data allows anyone, from scientists to ordinary individuals, to tap into a limitless stream of knowledge anytime, anywhere.
Examples
- Books evolved into e-books and digital libraries like Kindle Unlimited.
- CDs were replaced by streaming platforms such as Spotify and Apple Music.
- Mobile apps like Wikipedia offer encyclopedic knowledge in everyone’s pocket.
2. Software is Replacing Physical Products and Industries
Software is taking over physical goods and replacing entire industries through digital solutions. By doing so, it uses fewer resources, creates faster systems, and reduces inefficiencies. For instance, internet-based tools are phasing out traditional telecommunications infrastructure.
This shift extends to physical entertainment media. DVDs and CDs have become relics of the past as music and video streaming service platforms like Netflix and Spotify dominate. The transition has vaporized supply chains, packaging industries, and even warehouses that previously housed physical inventory.
This trend points to a future where everything that can be digitized will be. Any product or service dependent on physicality for its existence faces the possibility of being wiped out and replaced by software.
Examples
- Online services like Zoom replaced traditional office phone systems.
- Streaming platforms ended the dominance of DVDs and video rental businesses like Blockbuster.
- Software and virtual platforms are phasing out brick-and-mortar retail stores.
3. Online Companies Create Unique Ecosystems Under Their Control
Internet platforms foster ecosystems that bind users to their environments, enforcing rules that can sometimes feel ambiguous or arbitrary. Companies like eBay and Facebook became successful by connecting people – whether buyers to sellers, or friends to friends.
These platforms have grown increasingly complex as they’ve scaled. For example, Apple's App Store not only sells apps but also regulates them. However, Apple's criteria for approving or rejecting apps are sometimes murky, leaving developers frustrated. Despite this, the company's dominance forces users to comply or miss out altogether.
These ecosystems allow companies to shape user experiences by setting rules, turning platforms into private domains where their guidelines dictate engagement, monetization, and marketplace behavior.
Examples
- eBay facilitates buyer-seller transactions with user feedback systems.
- Facebook drives engagement through news, groups, and personalization algorithms.
- Apple's App Store operates under non-transparent rules while collecting 30% of sales.
4. User Loyalty is a Business Objective in the Digital Economy
Online platforms invest heavily in ensuring that users return repeatedly. They achieve this by creating tools for content creation and storage, giving users strong reasons to remain loyal. For example, YouTube provides value by making content creation and sharing effortless.
Besides creative tools, tech platforms increase user dependence by offering exclusive features that lock users into their ecosystem. This reduces the likelihood of users jumping to competitors. Furthermore, platforms monetize activity through data sales and revenue-sharing marketplaces.
Companies succeed by keeping users engaged, whether through active participation (content creation/sharing) or passive consumption (browsing and purchasing).
Examples
- Google enables creators with tools like YouTube Studio while offering ad revenue shares.
- Facebook stimulates activity with sharing and interaction features.
- Apple locks users into its ecosystem through device-specific content compatibility.
5. The Internet of Things Will Revolutionize Data Usage
As everyday devices like refrigerators and washing machines become internet-enabled, the data landscape grows exponentially. Known as the Internet of Things (IoT), this connectivity will ensure that people are constantly online, generating a constant flow of usable data.
Businesses are already capitalizing on this trend. IoT technology enables real-time optimization, like SteadyServ’s beer-keg monitors for inventory management. This level of data collection helps companies predict customer needs, refine processes, and uncover trends.
Although traditional businesses are racing to adapt, handling massive datasets remains a challenge. The increasing value of data will create new industries for analysis, storage, and cybersecurity in the future economy.
Examples
- Smart thermostats, like Nest, analyze user behavior to improve energy efficiency.
- Fitbit devices collect personal health data, enhancing fitness tracking.
- Inventory management tools monitor and restock products for convenience.
6. Forget Ownership: Access and Collaboration Fuel Success
Platforms like Uber and Airbnb thrive not on physical assets, but on connecting service providers directly with customers. These peer-to-peer models allow users to skip traditional ownership costs, promoting a system of flexible access instead.
Blockchain technology promises to disrupt this system further by creating decentralized platforms that remove middlemen entirely. Users would gain direct control over transactions through cryptographic security, envisioning a new phase in digital trust and cooperation.
These collaborative processes aren’t just changing business valuation. They’re reshaping consumer behavior, making ownership an afterthought in favor of affordable, shared service networks.
Examples
- Airbnb operates without owning any apartments or hotels, yet facilitates millions of transactions globally.
- Uber transformed ride-sharing without owning a single car.
- Blockchain-based currencies eliminate banks, lowering transaction fees.
7. Automation is Changing How We Work
The vaporized economy and automation can displace traditional jobs across industries, from low-skilled work to intellectual fields such as law and journalism. Robots can already perform tasks like cleaning hotels or sorting financial data.
Automation's efficiencies are undeniable, yet they pose challenges for workers whose skills become obsolete. While automation may raise living standards for some, it risks creating long-term unemployment for others.
The future workforce will rely on adapting by developing human skills like creativity, emotion, and interpersonal interaction – aspects that artificial intelligence cannot replace.
Examples
- Japanese hotels employ robots for cleaning and hospitality.
- Automated content tools write articles or summarize data without human input.
- Self-driving technology threatens jobs for drivers worldwide.
8. Education Must Adapt to Prepare People for New Realities
Our education systems were not designed to prepare workers for a labor market disrupted by automation. With nearly half of jobs in the U.S. potentially automatable, retraining and rethinking education has become necessary.
Traditional curricula often focus on abstract knowledge over practical skills. Future resilience requires students to learn teamwork, data literacy, and creative problem-solving, enabling humans to do what machines cannot.
By reforming education, society can prepare the workforce to face automation head-on, ensuring long-term employability and adaptability.
Examples
- Oxford predicts 47% of U.S. jobs could be automated within decades.
- Fields requiring creativity, like art direction and human teaching, are more secure.
- Teachers can inspire discussions and debates, which remain outside AI capabilities.
9. Data Becomes the Most Valuable Asset in the Economy
In a vaporized economy, data stands as the most powerful asset businesses can possess. The information harvested through user activity and digital tools allows businesses to optimize operations, predict trends, and connect with customers.
Traditional metrics of value, like physical assets, matter less than the power of data-driven decisions. Companies excelling in the digital era will be those that master the collection and application of user-generated information.
To succeed, businesses must safeguard data integrity while using it responsibly to foster transparency and trust with consumers.
Examples
- Netflix uses viewing patterns to recommend personalized shows.
- Amazon’s algorithms optimize inventory based on customer data trends.
- Ad-tech companies capitalize on targeting users through search histories.
Takeaways
- Focus on skills machines cannot replicate, like creativity, leadership, and critical thinking, to stay employable in the vaporized economy.
- Limit your digital footprint by scrutinizing app permission requests and carefully monitoring online data sharing.
- Be prepared for continuous learning and skill development as digital technologies and automation evolve.