Digitization Inevitability Test
Find what technology can absorb, then design for the transition
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 91%
The test starts from the premise that activities capable of being represented as data, reduced to patterns, or executed mechanically are candidates for digitization and automation. Instead of demanding an exact forecast, examine the direction of travel first. Ask whether the current behavior will plausibly survive for a century; if not, the strategic question becomes when and how the transition occurs. Next, inspect what users are already doing, because adoption often begins before people consciously identify the change. Finally, study the overlap period in which old and new systems coexist. That transition can expose risks to established businesses while creating adjacent opportunities, such as insurance for people using multiple forms of mobility rather than owning a car.
Origin
Extracted from Masters in Business through Kara Swisher's account of forecasting digital media, mobile computing, automation, car ownership, and transitional mobility services.
Core principles
- 01Anything representable as data is exposed to digitization.
- 02Rote and patterned work is more vulnerable than creative work.
- 03Long-term direction is often clearer than short-term timing.
- 04Transitions create new needs before old categories disappear.
- 05Behavior can change before people recognize that a transition has begun.
How to run it
- 1
Map the Existing System
List its jobs, transactions, physical assets, information flows, and customer habits. Identify who currently captures value.
Pro tip Include routine activities that insiders take for granted.
Watch out Do not limit the map to the industry's flagship product.
- 2
Test for Digitization
Ask which activities can be represented as data, executed through software, predicted from patterns, or automated. Treat those activities as exposed to change.
Pro tip Pay special attention to repetitive cognitive work, not just manual labor.
Watch out Do not assume white-collar work is protected merely because it is not physical.
- 3
Separate Direction from Timing
Ask whether the present behavior will still dominate in one hundred years, then compare that answer with what is likely next year. Use the gap to frame the plausible transition window.
Pro tip Seek directional confidence before calendar precision.
Watch out A correct long-term direction can still produce a badly timed decision.
- 4
Look for Paths Made by Walking
Observe behaviors people have already adopted without consciously declaring a transition. These actions provide stronger evidence than stated preferences alone.
Pro tip Study substitutions, rentals, subscriptions, and reduced ownership.
Watch out Do not dismiss early behavior because users still retain parts of the old system.
- 5
Design for the Overlap Period
Identify needs created while old and new systems coexist. Build services that support users moving between both environments.
Pro tip Look for categories that must be redefined around the user rather than the old asset.
Watch out Do not assume the old category disappears before replacement infrastructure exists.
In the wild
After giving up car ownership, Swisher realized traditional car insurance no longer matched her behavior, yet scooters, rentals, and future transportation still created liability. She reframed the need around a person moving through the world rather than a person owning one vehicle.
→ The transition exposed a potential new insurance category spanning multiple modes of transportation.
Swisher argued that landlines would disappear and a shrinking mobile device would become a person's computer and news center. She focused on the direction enabled by portable digital technology rather than the limitations of the large devices available at the time.
→ The forecast anticipated the smartphone's role as a central computing and media device.
Common mistakes
Demanding an Exact Date
Rejecting a directional forecast because its timing is uncertain can leave an organization unprepared for an otherwise visible transition.
Watching Only Physical Automation
Digitization also threatens patterned analysis and routine cognitive work, not merely mechanical tasks.
Ignoring Transitional Needs
Assuming an old category simply vanishes can conceal valuable services needed while both systems coexist.
Is it for you?
Best for
It is best for strategists, entrepreneurs, journalists, and workers assessing how digitization may reshape an industry.
Not ideal for
It is not ideal for precise investment timing or forecasts that require reliable dates and adoption rates.
From the transcript
“Everything that can be digitized will be digitized.”
“So I think about though, what can change, what's not going to be here?”
“Past are made by walking. That's what's happening here.”
From the episode
Kara Swisher Discusses the Tech Industry
Kara Swisher