The Six Ds of Exponential Technologies (Diamandis)

The Six Ds of Exponential Technologies (Diamandis)

🔥 The Six Ds of Exponentials is a framework developed by Peter Diamandis, an entrepreneur, author, and futurist. The framework explains the six stages that technologies and innovations typically go through, offering valuable insights into how technological advancements tend to reshape industries, economies, and even societies.

DIGITIZATION: The first stage involves the digital transformation of information, products, or services. This is when analog processes or products are converted into digital formats, making them easier to manipulate and distribute. For example, the digitization of music has transformed the entire music industry. With the advent of digital music, people can now access millions of songs from anywhere in the world.
DECEPTION: In the early stages of exponential technologies, their growth can be deceptive. They may not appear to be significant, but they are quietly advancing and doubling in power, often unnoticed by most people. For example, in the early days of the internet, many people dismissed it as a fad that would never catch on. However, as more and more people began to use the internet, it became clear that it was here to stay.
DISRUPTION: Once a technology or innovation reaches a certain point in its growth curve, it can disrupt existing industries and paradigms. This disruption can be rapid and transformative, fundamentally changing how things are done. For example, the rise of ride-sharing services like Uber and Lyft has disrupted the taxi industry by providing a more convenient and affordable alternative.
DEMONETIZATION: As exponential technologies advance, they often lead to reduced costs or even the elimination of costs associated with certain products or services. This can make previously expensive goods or services more affordable or even free. For example, the cost of solar panels has dropped dramatically in recent years, making them accessible to more people than ever before.
DEMATERIALIZATION: Exponential technologies tend to reduce the physical footprint of products and services. This means that what used to require physical materials or resources can be accomplished virtually or with minimal physical assets. For example, the rise of e-books has led to a decline in the sales of physical books, as more people opt for digital versions.
DEMOCRATIZATION: As technologies become more advanced and accessible, they become available to a broader range of people and organizations. This can empower individuals and smaller entities to participate in industries and activities that were once dominated by larger players. For example, the rise of social media has democratized the way we consume and share information, giving everyone a voice on a global platform.

The Six Ds of Exponentials framework is a versatile tool that can be applied to a wide range of contexts. It facilitates a comprehensive understanding of the transformative power of exponential technologies, assists in the analysis and prediction of the impact of emerging technologies and innovations, and enhances organizations' readiness to effectively respond to future changes.

Sources:
Ramirez, V. B. (2016, Nov. 22), "The 6 Ds of Tech Disruption: A Guide to the Digital Economy".
Michaelis, M. (2019, Nov.), "Preparing for the Exponential Technology Revolution".
Rojas, M. A. (n.d.), "Exponential Technologies in a Nutshell".
Creative HQ. (n.d.), "What is exponential technology?"

Hong Sun
Management Consultant, Canada

Applying the Six Ds Framework in the Logistics Industry

@Jaap de Jonge: In their book "Logistics and Supply Chain Innovation: " - A Practical Guide to Disruptive Technologies and New Business Models", authors John Manners-Bell and Ken Lyon give a nice example for logistics, although not all 6 stages can be applied to the disruption of business models related to physical processes such as the movement of goods. They argue that Digitization, Disruption, Demonetization and Democratization can be used as a valuable framework to analyze the future of logistics industry:

DIGITIZATION: The first stage of the disruptive process, digitization, has a big impact on transport and logistics industry. An obvious one is the migration of letters to email, reducing the number of documents sent through postal and express parcel service providers. Another, more transformative impact is the digitization of documents that carry the "metadata" accompanying goods throughout their storage and movement, which provides far greater level of supply chain visibility. If logistics companies can capture the data effectively, they can use it not only as a way of making their existing operational processes more efficient, but as an opportunity to replace outdated business models.
DISRUPTION: The transport industry is currently very inefficient, partly because the sector is split into silos of private fleets of vehicles, for which the allocation of resources is only as good as each individual company's access to demand (i.e. loads). The problem is entrenched as each company sees its ability to access loads as a key competitive advantage, a situation further exacerbated by the reluctance of many shippers (owners of cargo) to collaborate and share contracted assets with companies, competitors or not. The inefficiency and poor use of data make the transport industry ready for disruption. The development of platforms that can match supply and demand with great efficacy could deliver huge value. Whether this will help incumbents to gain additional loads or this will result in a more far-reaching move such as disintermediating the industry (when shippers strike deals directly with owner-drivers), a major shift is bound to happen.
DEMONETIZATION: The third stage (also the most worrying one) of the disruptive process is demonetization. Although products still need to be moved to market and thus logistics industry can be spared from the additional stage of "dematerialization" (unlike the camera film industry in which consumers stopped buying film products in favor of electronic storage in digital cameras), there are still considerable risks for medium and large transport companies such as UPS, FedEx and DHL. If, due to disruptive technology providers, shippers are able to directly access the vast pool of owner-drivers in every country all over the world, they would be able to benefit from enormously lower cost bases by bypassing transport companies. In fact, some of the largest shippers such as Amazon have already started disintermediating their logistics operations by dealing directly with "local heroes."
DEMOCRATIZATION: This final stage of disruptive process is of concern of logistics industry too, in that disruption could lower the barriers in the transport sector, increasing the size of the market supply from a few thousand transport entities in each national market to millions of individuals who can use either their own vehicles or public transport to do the job. It's foreseeable that such transformation will take place at least in parts of the industry, especially mail and parcels.

In conclusion, in order not to fall victim to a new market currently going through disruptive shifts, players in logistics industry must do all it takes to harness the new technologies and change the market to their own advantage.