Introduction

The Book at a Glance

Humanity has arrived in the information and knowledge society. Over the last twenty years, books, music, films, and photos have been digitized. Even social contacts are managed today with “apps” and internet platforms. These major changes have also led many people to fear further change. They wonder what else might be coming, what will happen to jobs, or whether a dictatorial surveillance state will emerge. Some even fear the end of humanity if artificial intelligences take over the earth.

Back in the 1980s there were books with titles such as “The Data Network: Computers Threaten Freedom” [BK83]. There were also fears of job losses due to computers and robots. Hardly had the fearful accepted computers and the internet as not so dangerous when new fears appeared: Big Data, Data Science, self-driving cars, and artificial intelligence.

Is the situation really that dangerous?

To find an answer to this question, knowledge from many different fields is necessary. Unfortunately, today’s education system is very theoretical and separates computer science, economics, physics, history, psychology, and sociology from one another. But to answer the question above, you need a little bit of everything. You have to think “holistically” in terms of networks and complex systems. You also have to leave the ivory tower of academia and look at the situation in companies. In addition, it is helpful to have some basic knowledge of data and computer science.

This book contains enough of all these topics so that, after reading, you can assess the situation much better. It is aimed at “beginners” with no prior knowledge. The individual chapters are relatively independent of one another, so the book can still be read with benefit even if you only “skim” certain sections because, for example, the topic is too theoretical or too mathematical for you.

The most important foundation of this book is the science of “complex systems”. So far it is not very well known, but it is intuitively easy to learn. The word “complex” is often used colloquially and usually means “very difficult” or “not easy to understand”. In Chapter 2 “Systems and Networks” the fundamentals of simple, complicated, and complex systems are explained using examples. With graphs and networks, these systems can be visualized and analyzed, and simulated with agent-based modeling (ABM).

The second foundation of this book is human intelligence, which is covered in Chapter 3 “The Human Being”. According to findings from behavioral economics and psychology, humans have only limited abilities. However, they can use these profitably with the help of game theory.

The third foundation is Chapter 4 “History”, which provides a very brief and abstract overview of human history. In particular, it emphasizes the role of exchange, trade, and technological development. It explains why “knowledge” is more important today than “capital”.

Armed with this basic knowledge, Chapter 5 “The Economy as a Complex System” can be examined. The economy is an information system and prices are the carriers of information. It explains why traditional economics should be expanded with insights from complex systems. Basic economic knowledge is also explained, for example how markets work or the relationship between supply, demand, and price.

The fifth foundation of this book is data, discussed in Chapter 6 “The Raw Material: Data”. Different kinds of data are explained using examples. It then shows where they matter in computer systems and in industry. Various databases are introduced and how data is processed in data warehouses and interpreted with business intelligence.

How useful knowledge is derived from data is the topic of Chapter 7 “Data Science: From Data to Knowledge”. Under the name data science a range of techniques are gathered that analyze data with the help of computers and draw statistical conclusions from it. As an example, so-called decision trees are introduced.

Chapter 8 “Artificial Intelligence” goes one step further. It explains how to teach computers intelligent behavior and whether computers are already as intelligent as humans. For that, the concept of “intelligence” also has to be viewed somewhat critically. Using neural networks, the technology behind self-driving cars is outlined. Finally, the question is examined whether computers can truly become more intelligent than humans.

In Chapter 9 “The Digital Economy” the impact of the technologies described above on the economy (and therefore, of course, on society) is examined. Digitization, networking, and exponential growth have led to a digital economy that differs greatly from the traditional economy. Innovation has become more important than competition. Instead of company size and market dominance, adaptability and “agility” are required. Newly emerged business models and social networks are explained.

In Chapter 10 “The Future” a look into the near future is attempted. With the Internet of Things there will be another step of digitization. The technology of the Internet of Things and some new applications are explained. The distant future is also touched on with the singularity.

New technical inventions often trigger economic change. This usually leads to conflicts of interest. Established companies want to protect their market position against newcomers. Employees fear for their jobs. Small and new companies, on the other hand, want free and unhindered access to the market. This leads to political debates in which people are often divided into two camps: “for more government” versus “for more market”. This issue is discussed in Chapter 11 “… and Politics” and an approach is presented that takes insights from complex systems into account.

Finally, Chapter 12 “Summary and Conclusion” summarizes the most important insights once again and draws a conclusion.

What Is Not Covered in This Book

Technological development is such a broad field that you cannot be knowledgeable about all topics at the same time. Specialization has progressed so far that you have to go either broad or deep. Therefore, many technologies and sciences with great potential cannot be covered in this book. True to the motto “Stick to your last”, this book focuses on the field of information technology (IT).

That is why, for example, the following topics are not covered: 3D printing, quantum computers, autonomous flying drones, smart materials, nanotechnology, genomics, biosciences, and genetics. They are, of course, all interesting fields in which a lot of new things will happen. Their absence from this book is not meant to imply that they will not be important in the future.

The Political Dimension

Technological change has led to major economic changes. There have been winners, such as the large new internet companies, and losers, such as traditional media companies. Therefore, technological progress always has a political dimension.

When German Chancellor Angela Merkel (CDU) said in 2013, “The internet is uncharted territory for all of us”, she was mocked. Many found it funny because, as consumers, they had known the internet for more than 15 years. But did Ms. Merkel speak as a consumer or as a politician? If she spoke from a politician’s perspective, she meant that politics is still not sure how to deal with the new technologies. Is the plan to regulate the internet more strongly? On the other hand, the internet also evolves daily. New applications emerge every day. If you want, you can discover “uncharted territory” somewhere on the internet every day.

In 2015, the President of the European Parliament, Martin Schulz (SPD), called for a “political debate” in the foreword to the book “Technological Totalitarianism: A Debate” and declared “Why we must fight now” [Sch15]. The title alone already hints at the one-sidedness of this “debate”. This is a very dangerous development because computer scientists, engineers, and other technically interested people have almost no voice in the German public—and certainly none in politics. In large parts of society, technicians are seen as “nerds” one can also laugh at a bit, like the physicists in the TV series “The Big Bang Theory”. They appear in the media preferably as critics of US companies or the NSA, i.e., when they can be used politically. Against a politically trained but technically uneducated journalist, a technician cannot argue effectively on television. Professors might be able to, but they in turn have very different economic interests than startup founders and do not see the dangers of political regulation. Representatives of large companies also have very different interests than medium-sized businesses and startups.

But the biggest problem with this “debate” is that many participants have an outdated view of history and humanity from the time of Karl Marx, do not know newer developments in economics, know nothing about the usefulness of data science, and completely lack entrepreneurial knowledge. A lack of basic knowledge leads to a misjudgment of the situation. A wrong analysis, however, also leads to wrong policy. And wrong economic policy in the field of information technology would have devastating consequences, as explained in this book.

Notes on the Book

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Some diagrams in this book use icons from OSA; see http://www.opensecurityarchitecture.org/cms/about/license-terms for the license. Commercial use of the icons is permitted under this license, provided the source is indicated.