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Fields of digital innovation: Blockchain, quantum, VR/AR

Explore less mature, newly emerging technologies that are considered important milestones of digital innovation

January 04 2023Karsten Leclerque

Establishing new blocks of digital innovation

Cloud, IoT, and analytics are highly dynamic but widely established building blocks of digital innovation. In addition, less mature, or even newly emerging technologies are considered as important milestones of digital innovation, such as blockchain technology, augmented/virtual reality (AR/VR), and quantum computing.

Blockchain solutions for frictionless business

Women holding a tablet.

More than half the respondents said they had blockchain use cases in place. At its core, a blockchain is a distributed database. The broad distribution of information is the most important feature of blockchain solutions, as it promises maximum transparency, immutability and protection against manipulation, and security. So-called smart contracts can ease collaboration between partners and can be used to create workflows and business process automation.

Public Blockchains

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In public blockchains, each user can operate a node and store the entire history of all transactions locally. Transaction-related information is usually visible to everyone, while personal data about users is hidden. For example, the transfer of Bitcoins is visible to everyone, while the trading partners involved remain anonymous.

Private Blockchains

In private blockchains, the operation of nodes is regulated and usually restricted to active/approved partners in the ecosystem. The business partners are usually known, and the contents of the transactions are hidden and only visible to the respective trading partners.

Respondents most frequently mentioned payment services and traceability as use cases, but there were many others. Intellectual property, smart contracts, and non-fungible tokens (NFTs) were more or less equal.

AR/VR

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Augmented (AR) and virtual reality (VR) have seen a significant rise in popularity in the past decade. In our survey, more than one third have use cases implemented, another 30% are discussing specific projects in the AR/VR space. While virtual reality (VR) refers to a digital image of reality created on a computer, augmented reality (AR) is the immersive interaction of digital and analog life. Moving away from the physical and into the virtual world, smart glasses and other AR/VR devices, like smartphones or cameras, are on the rise.

AR glasses and VR Headsets 

VR goggles allow users to immerse themselves in a new, artificially created world that appears deceptively real. They can swim with whales in underwater worlds, explore a shipwreck, or walk through their new house before it has been built. This can be video content captured with a 360-degree camera or a 3D-animated world. However, virtual reality is always fully contained within VR headsets that shut out the outside world. VR is mostly used for recreational purposes, but also for employee training, for instance.
Unlike VR glasses, AR glasses do not completely isolate users from their real-world environment. Instead, they display additional information about users’ surroundings. For example, warehouse workers are shown on which shelf they can find the spare part they are looking for; mechanics are given useful information about the technical components they have to repair.

Creating a seamless world into the Metaverse

A digital twin is a virtual representation of a physical product, space (e.g., building, factory), or process (e.g., production) that can be used for simulation before the real-life twins are touched.
The ultimate goal of the metaverse is to create a seamless world without interruption, similar to the real world. It includes elements of both AR and VR. While the B2C metaverse is very much focused on consumption, the enterprise metaverse addresses virtual collaboration, immersive learning, and virtual collaborative design, as well as AI training. Here, again, respondents also mentioned many other interesting use cases from various industries:
 

Quantum computing

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In our survey, less than 25% of respondents have already come into contact with quantum technology, but almost half are discussing related use cases.

A quantum computer uses the peculiarities of quantum mechanics to perform calculations and store data. The difference from a digital computer is that quantum-enhanced computers operate in multiple states. That means they can effectively perform many computations simultaneously. One of the reasons for the excitement around quantum computing is the way they can scale for complex tasks like modeling.

This requires a specific type of algorithm that uses the simultaneous calculation ability. A typical digital computer task is programmed to perform a complex series of steps, whereas programming a quantum computer is more about implementing a specific algorithm.

Is quantum computing the future?

Broad adoption of quantum computing is still a long way off, but the development of these computers is progressing, and quantum-inspired annealer technology is already available, which allows to do tasks in real time that are currently being done in batches, such as scheduling and fleet movements.

The shift to “real” quantum computing technology will be as epochal as the digital revolution – a greater variety of quantum-specific algorithms will be available, and speed will increase dramatically. It is therefore a good move to be ahead of the curve and start thinking about what building blocks will have to be put in place. When asked about the areas with the biggest added value, respondents mentioned many interesting use cases from various industries, mostly centered around some main areas of application:

Advantages and Risks of quantum computing

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EU public-sector institutions have also realized both the potential and the risks of quantum technology. While most private-sector tech giants that drive R&D in the quantum computing space are headquartered outside Europe, European investments in the development of quantum computing are strongly driven by public authorities.

EU public-sector institutions have also realized both the potential and the risks of quantum technology. While most private-sector tech giants that drive R&D in the quantum computing space are headquartered outside Europe, European investments in the development of quantum computing are strongly driven by public authorities.

Sources of information for innovation-related topics

How do decision-makers obtain information about digital technologies? Our survey has shown that there is a great variety of information sources:

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Exchange with business partners was mentioned most often; exchange within the organization and even with competitors was also given as a major source of information.

Working with IT consulting and service providers and with management consultancies were neck and neck – but what exactly do organizations expect from their external service partners in the area of digital innovation? 

Criteria for selecting a digital innovation services partner

Our study has shown that organizations invest in digital innovation to improve customer experience and the quality of products and services; they aim to increase their organizational agility and efficiency, to facilitate the integration of business partners, as well as to achieve ecological sustainability targets and more transparent and resilient supply chains.

Cloud, IoT, and data analytics are the established building blocks of digital innovation. In addition, emerging technologies are considered as important milestones of digital innovation, such as machine learning and artificial intelligence, blockchain technology, augmented or virtual reality, and quantum computing.

However, the decision-makers surveyed also highlighted factors that hamper a broader adoption of digital strategies: concerns regarding availability, performance, and security, challenges in moving projects from the trial or proof-of-concept stage to production, as well as skill shortage in the IT department and in other lines of business are considered as obstacles to investment in digital innovation. One solution to these challenges can be to work with an experienced service partner whose core competence is digital innovation. What do organizations expect from such a partner? 

How do organisations want to be supported?

Our survey has shown that organizations are in particular looking for external support with the technological foundations of digital innovation, i.e., in areas such as analytics, AI, IoT, etc. A comprehensive portfolio that covers these major topics is therefore key for innovation partners.

Ongoing digital support

As many of these technologies are partly or fully cloud-based, and as the cloud is widely considered as a major launching ramp for innovation, the same is true for cloud-related consulting and support with migration and transformation.

Most organizations expect end-to-end support with digital innovation, from consulting to operation.

Costing

Reasonable pricing is obviously essential, and reasonable costs are expected to become even more of a focus given the various crises. However, it is not among the top considerations when it comes to selecting an innovation partner as organizations are aware of how critical it is to adopt digital innovation and bring in top experts and advice.

The importance of Industry Knowledge 

At first sight, expectations regarding industry-specific process know-how seem to be quite low, given how important this know-how is for digital transformation and innovation. However, only 39% say that industry-specific know-how is not relevant at all, and many organizations consider process transformation as part of their own core competencies, while they seriously lack know-how related to the supporting technologies mentioned above.

Data Sovereignty and Private Cloud solutions

Given the enormous importance of public clouds for digital innovation, data sovereignty solutions are considered as more important when selecting a services partner than private cloud operations services, which are nevertheless still considered as very important or important by two thirds of the decision-makers surveyed for a digital transformation.

About the author
Karsten Leclerque

Karsten Leclerque

Head of Infrastructure & Cloud Services Practice , PAC

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