I love talking about business models because in the end, it's usually the best business model, not the best technology, that wins the day. And digital transformation has the potential to reinvent business models by leveraging superior customer, product and operational insights to disrupt industry value chains and disintermediate customer relationships (see Figure 1). As the title of the book "Moneyball" states ("Moneyball: The Art of Winning an Unfair Game"), some of these reinvented business models will be based on "winning an unfair game". We have historical lessons about how Robber Barons[1] of the late 1800's created and won "an unfair game" that gave them monopoly power over suppliers, customers and competitors. To create this unfair game, Robber Barons leveraged a concept called "vertical integration" to dominate industry value chains and construct indissoluble customer and supplier dependencies. Let's review the lessons of these Robber Barons to understand how digital transformation might enable modern companies to win the digital unfair game.

"If you buy a Tesla today, I believe you're buying an appreciating asset, not a depreciating asset." Think about that statement for a second…you're buying an appreciating asset, not a depreciating asset. And what is driving the appreciation of that asset? Tesla cars become "smarter" and consequently more valuable with every mile each of the 400,000 Autopilot-equipped cars are driven. Imagine a mindset of leveraging Deep Reinforcement Learning with new operational data to create products (vehicles, trains, cranes, compressors, chillers, turbines, drills) that appreciate with usage because the products are getting more reliable, more predictive, more efficient, more effective, safer and consequently more valuable.

Wait, the AI advantage is already here and gone? That's what Deloitte warns in their report "Future in the balance? How countries are pursuing an AI advantage".A noteworthy quote: "There are indications that the window for competitive differentiation with AI is rapidly closing. As AI technologies become easier to consume and get embedded in an increasing number of products and services, the early-mover advantage will rapidly diminish" (see Figure 1). How Countries are Pursuing an AI Advantage". But of course, it's not too late to benefit from the digital transformation potential of AI! Because having AI capabilities is not the same thing as exploiting AI capabilities. "AI success depends on getting the execution right.

There are several technology and business forces in-play that are going to derive and drive new sources of customer, product and operational value. As a set up for this blog on the Economic Value of Data Science, let's review some of those driving forces. "Due to its ability to substantially improve productivity and boost economic output, Artificial Intelligence (AI) has the potential to increase economic growth rates by a weighted average of 1.7% and profitability rates by 38% across a variety of industries by 2035. Source: NorthBridge Consultants "The Artificial Intelligence Revolution: New Challenges & Opport..." Figure 1: Source: "The Artificial Intelligence Revolution: New Challenges & Opportunities" Data Science (Artificial Intelligence, Machine Learning, Deep Learning, Reinforcement Learning) holds the potential to exploit Big Data and IoT to create new sources of economic value (wealth). But what is the source of this economic value when the AI tools that are driving this economic growth (TensorFlow, Spark ML, Caffee2, Keras) are open source and equally available to all players?