Digital Behavior: The New Gold of Capitalism

For decades, the factories of industrial capitalism with their smoky chimneys, full factory parking and impressive material logistics have shaped our understanding of work and productivity. When processing raw materials such as steel, plastics or wood, something new is created whose economic success is determined by market demand. This mechanism is easy for us to understand.

Quite different, however, is one of the most precious raw materials of our time – our data. The mechanisms by which human behavior as a raw material is transformed into a profitable product – useable data – are difficult to understand.

This is fatal for two reasons: First, a basic understanding of the system is crucial to be aware of and respond to the growing power of high-tech giants. On the other hand, it needs sound know-how in order to better align its own business model with customer behavior based on behavioral data.

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Data as a business basis

Marcus Naumann Child
Marcus Naumann, Business Strategist at the strategy consultancy child

Building behavioral information sounds harmless at first. The principle: User data is evaluated using algorithms to identify customer needs and to offer and develop tailor-made products. So in the beginning is the collection of data. And the more data that can be processed, the more meaningful it is that can be extracted from it.

So a system is especially successful if it is used by many. And the more people use it, the better it gets. With its constant expansion into new business fields, Google is the prime example of this mechanism: more and more new channels are generating more and more knowledge and information.

From the data collected, people’s needs and expectations are determined, consumption forecasts compiled and new, mostly digital services built around a need. However, this is not a win-win situation, as the public and regulators often believe, but a completely new form of capitalism.

Also interesting: Dark Data – a phenomenon that holds risks but also many opportunities. Professor Iris Lorscheid explains in the new issue of the “digital quarter of an hour”, which uses there are.

So far, there has been an interlocking balance of power between companies that have been operating in uncertainty on a neoliberal market and those customers who have selected what they want to consume through self-determined decisions. However, as human behavior is increasingly digitally captured and processed, the deliberate articulation of needs has yielded to the satisfaction of unconscious needs. The predictions about the behavior of the individual are used economically and are therefore only a means to an end.

After the first hype about big data and algorithms, it slowly becomes clear what the business with our data really is. Harvard Professor Shoshana Zuboff has made a name for herself – surveillance capitalism (Shoshana Zuboff, The Age of Supervision Capitalism, Campus Verlag).

Their statement: Digital factories ostensibly develop useful services solely for kidnapping human behavior and processing it in a system that the public does not understand. The consumer becomes the object of a technologically advanced and increasingly inescapable operation to extract raw materials. According to Zuboff, the novelty of this form of capitalism is that he does not nourish himself, as before, with labor, but with any kind of human experience.

Insist on surveillance capitalism

It is important for corporate leaders to face the consequences now, because no one can ignore surveillance capitalism. The processing of human experience is the basis of their success not only for the burgeoning internet companies in Silicon Valley or aspiring German start-ups.

Even traditional industrial companies need skills and structures to integrate the raw material into their processes and place customer needs at the center of their thinking. This is the only way they can survive in the newly created market for forecasting products.

Today it is essential that managers change their perspective and radically take on the view of their target groups. To open oneself to the wishes of the customers means to understand how to sell products to an audience and not to an audience. By taking into account their role within society, it becomes possible for companies to make a real contribution and to interact with customers in a mutually beneficial way.

The more social and democratic perspective can become the European version of this capitalism when dealing with data protection as a competitive advantage over American or Chinese variants. When we understand how this capitalism works, we also understand how to make it better.

Also interesting: The data landscape needs an OP

About the author: Marcus Naumann is responsible for the strategy and content management of the clients of the strategy consultancy child in Frankfurt / Main with a focus on organizational consulting, retail innovation and e-commerce.

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