By Wolfram Keller (corresponding author), Ulf Stalmach, Ralph Wörheide
One difference between “new economy” and its predecessor is the shift in value creation. The production and sale of physical products like paints and coatings is more and more being replaced with virtually produced and applied products and services. Another difference is their so-called clock speed. The term describes the speed that a company can adjust to changes and is determined by the intensity of competition and the speed of development of key technologies, e.g., digitalization.
Figure B1: Evolution of annual data volume as indicator for the clockspeed of the IT industry
and driver of digital, data-driven, and data-centric business models
The evolution of IT measured by total data volume per year is dramatic. The volume of worldwide data doubles approx. every 2 years. The Zettabyte (1021 bytes) era began around 2010, reaching 80 ZB by 2020 and is expected to be approx. 175 ZB by 2025. The annual data volume will be measured in Yottabytes (1024 Bytes), if not in Brontobytes (1027 Bytes) in 2030 already.
The cycles in the coatings industry are several times longer than those in the IT industry. The greater and faster the progress in automation and digitization is becoming, the more the gap between companies in the “old economy” and companies in the “new economy” with digital, data-driven, and data-centric business models widens. Coatings manufacturers’ product-centric business models have been the method of choice in the “old economy”. The massive growth of data and increased needs to share them with suppliers, customers, and the periphery will enable faster and economically superior product development and delivery of physical products such as paint and coatings.
Figure B2: Schematic representation of the coatings industry clockspeed;
duration of eras shortening from centuries to decades until the rise of the new economy
Due to the “physical backbone” of paints and coatings, a fully blown, pure data driven or even data centric business model will not be the model of choice for raw material suppliers, paint makers, and applicants, though.
This article is the second out of six of our series on sustainable digitalization in the coatings industry, the concept of a Smart Paint Factory and the Smart Paint Factory Alliance, SPFA