Being the chief executive of a software company today is a little like being a magician. The seismic economic, business and cultural shifts happening around the world are driven by digital invention and innovation. Yet, not unlike going to the movies, we suspend disbelief and see it as magic.
We imbue things with human characteristics by calling them “smart” and “self-fill-in-the-blank.” Self-driving cars, robotic factories, artificial intelligence and machine learning are being spurred by software as well as the engineers and coders who create our digital world.
For example, everything featured at the AutoMobility car show in Los Angeles last year underscores the structural shifts in our economy because of software. Concept cars are literally covered in screens and are updated remotely via software. The Chevy Volt depends on more code than a fighter jet.
Lift the hood on all this, and you’ll discover the economic model of an automotive industry that is becoming what some have called the “digital automotive network.” Not only does connectivity changed the car experience, but also digital design and manufacturing change how innovation is being introduced. Embedded sensors have transformed cars into a big data vacuum.
The truth is that it’s taking fewer and fewer people to do some things, but we forget that it is taking more and more people to do other things. There were 400,000 engineers, scientists and technicians from more than 20,000 companies and universities behind the Apollo 11 space mission.
There’s a cellphone plant in China — Changying Precision Technology Company in Dongguan city — that is going from 600 to 60 and maybe even to 20 employees because of software-driven robotics. Exactly, how many software engineers will it take to develop that technology and launch it? Indeed, how do we even begin to figure out that number?
We face a massive challenge in measuring our new digital economy because there’s been a fundamental change in how we create value in our businesses. Linear is broken. It’s broken in software development thanks to agile approaches. It’s broken in marketing models thanks to analytics. Today, there is a modern company emerging. One in which software is the intermediary and in which the best way to know our customers isn’t through traditional market research, but directly, through the software we build. In fact, as humans, we increasingly know each other through software.
And, this technological magic is enabling us to shift our world forward into high gear. We are doing this by freeing up human brain power to focus on other things. There is no such thing as artificial intelligence — there is only intelligence or no intelligence — and all of it, however we define it, is increasing the size of our economic pie. We may already have the answer to unsticking stagnant productivity rates globally, but since we don’t have the sophisticated economic measures yet that we developed for the previous industrial order, we don’t know the real impact of this technology on the global economy’s bottom line.
The old business model worked when there were economic efficiencies to be gained by operating that way. But today, those efficiencies are changing wholesale. There’s new science and it is spreading across every industry. The process of putting software at the heart of our businesses frees up pent-up economic value and it accelerates innovation and choice in our society.
Does it matter that there are literally millions of software developers building this new world? Only if we don’t have enough of them. Either way, as we get driven down the superhighway of our digital world, we’re proving one thing: We are always hungry for more magic.
Mike Gregoire is chief executive of CA Technologies.