Optimizing our lives: The ultimate frontier of the digital revolution

Our time on this planet is limited. While life expectancy has made major gains worldwide (more than 80 percent of the population alive today can expect to live more than 70 years), our existence is still too short to realize all of our dreams.

Wouldn’t it be great if we made the most of our time on earth? How about eliminating all the social, environmental, and economic waste in our lives?

Humans waste the most essential elements of their existence: food, assets, money, and time. Changing this pattern is at the core of the fourth industrial revolution and closely associated with the sharing economy. In doing so we could be happier, more prosperous, and make the world a better place for our children.

Here are four illustrations of our wasteful behaviors and how new business models are changing them:

  1. Every year, the total amount of food wasted is more than 2.5 billion tons and equal to more than half of the world’s annual cereals crops. Food is left to rot on farms, wasted in transport, or disposed of in homes and restaurants. However, new tools can optimize the amount of food we use. Groupon, a company that among other services provides large discounts if you pre-order your meals in restaurants, allows businesses to match their orders to the number of customers they expect and their specific requests. In the process, they can also charge less for the same value.
  1. Take cars for example. They are among the most expensive assets many people own, but we only use them, on average, 5 percent of the time. Even when they are on the road, cars tend to be under-used by single drivers who could easily take more passengers. Imagine how many resources we could save (think of all the metal, rubber, and plastic that goes into each car) if we had more effective transport systems. The same is true with our homes. When we are on vacation, they stand idle but still consume energy. Airbnb, Uber, and other home and car sharing companies have entered this space successfully, creating value and new markets from previously intangible assets—a space in your car, an empty room in your apartment, etc.
  1. I watch TV every now and then, and the overload of advertisements is often irritating. Most of the time it is irrelevant to me: My kids are grown up, so I’m no longer in the market for diapers, and I’m young enough to not need Viagra. Advertisers spent more than $660 billion in global advertising in 2016. Thanks to new algorithms, ads can better target users.
  1. “It is not that we have a short time to live, but that we waste a lot of it,” wrote Seneca in “On the Shortness of Life.” His meditations still ring true today since “how we spend our days, is, of course, how we spend our lives.” Think about your typical routine. How much time do you spend in traffic, in useless meetings, in line for permits and certificates, or simply waiting to see a doctor? New tools and methods in health care and e-government can optimize the experience of patients and citizens giving them more time for what matters.

The digital revolution is giving us new tools in the fight against this waste. These emerging innovations have a lot in common: They optimize planning. People and assets don’t sit around idle until they are used or needed, which increases productivity. This opportunity to optimize is at the heart of the fourth industrial revolution, which has similar traits to earlier transformation (Figure 1).

Figure 1: Four industrial revolutions

02.23 wolfgang fig 1

The transition between the third and the fourth industrial revolution has many analogies to the shifts of the first to the second. Initially, innovations generated sectoral transformations such as the spinning wheel, which transformed the textile industry in the 18th century. This was the period of the first industrial revolution. The second industrial revolution at the end of the 19th century then created the horizontal connections between the existing vertical innovations. We are now seeing a similar horizontal scaling of digital innovations. This allows us to share our assets and manage our resources more effectively. The digital trace also creates a first step toward formalization, especially for the poor. Thanks to low-cost transaction platforms, it is now easier to match supply and demand, including implicit demand. Think of people you never thought of going into a restaurant, using a taxi or traveling elsewhere may now be inclined to do so. 

To conclude with Seneca: “We are not given a short life but we make it short, and we are not ill-supplied but wasteful of it… Life is long if you know how to use it.” New tools will not make us wiser, but they can put our wisdom to more productive and happier uses.