Building the Digital Economy: Product Development for the Future

The digital economy will be booming in 2022 and has a Cumulative Annual Growth Rate of 19.1% from 2021 to 2026. That means the digital transformation market will expectedly reach $1247.5 Billion by 2026. This growth is purely consumer-driven, as customers expect reliable products and experiences in the digital world. Alongside the consumer demand, there is also a need for faster delivery of products. 

However, most companies stepping into digital product development are producing digital products and processes with outdated tools. In order to prepare for the future, businesses must equip themselves with modern development techniques, that will allow them to meet customer expectations. The processes of digital product development also need to be sustainable. The tools discussed in this blog will give insights into how modern techniques can aid in R&D for a sustainable, faster, and accurate product development process. 

What is the Digital Economy?

Let’s go over what the digital economy is. It’s the economic activity that is generating billions of dollars every day from online interactions between businesses, people, devices, data, and processes. The digital economy for people includes the consumption of digital products such as internet communities, social media, and e-commerce.

For businesses, the digital economy is centered around production management, analysis, and data sharing through online platforms like cloud services, online supply chain tracking, and customer support. 

One of the most prominent products in the digital economy is the Internet of Things (IoT). IoT connects the physical and digital worlds for various industrial and recreational applications. The reason for IoT’s prominence is that it can help reproduce a digital world.

It will allow businesses to run accurate manufacturing and service models, and customers will gain more convenient access to lifelike experiences in the digital world. 

Virtual Reality (VR) and Augmented Reality (AR) are groundbreaking products under the digital economy. Together, VR and AR are creating unmatched digital experiences. They allow users to expand their imagination and experiment hands-on in controlled environments. 

Digital Twins are another digital economy tool that has made two things possible. Researchers can use digital twins to run long-term analyses and understand how people and processes react to external factors.

Not only are digital twins the most promising predictive technology, but they are also an excellent application of replicating jobs and roles for running automated functions. 

Now we’ll go over how these Industry 4.0 tools can help advance product development strategy. 

Futuristic Conceptualization and Modelling with Virtual Reality:

An integral part of R&D is design conceptualization. Creating a concept helps assess design integrity, costs, and customer reactions. Currently, concept creation requires extensive time, ranging from weeks to months.

The delay caused due to putting together a physical replica of a product or process is a significant contributor to slower innovation. 

Virtual Reality (VR) allows engineers and design specialists to create interactive digital models within days. The models are also dynamic, easily editable, and hyper-realistic. R&D teams can collaborate with experts using VR technology and simulate processes, and even test product design at an incredible pace.

Through virtual reality, the R&D phase of production is simplified and sped up while also using less physical resources. VR is a sustainable solution for product conceptualization that will address the current problems. 

Real-time Innovation in Practice with Digital Twin:

Businesses are gathering extensive amounts of customer data from various data points. The content they consume is tracked through pixels and cookies. Their activities are tracked through GPS and social media training.

Even their health stats are kept under observation through wearables. All this information is being sought by businesses to understand their customers better. Enterprises want to shape a near-perfect customer journey.  

However, the predictive models and digital natives that most organizations still employ are being overloaded by the number of data points and the frequency of inflow of data. Moreover, the digital natives process data in a linear fashion.

With these predictive tools, organizations cannot process one prominent outcome. Rather, they rely on making multiple versions of a product based on the majority of consumer feedback and data, then test these versions in the market before launching the most successful one. 

Digital Twin technology trumps predictive models and truly enables real-time information. Digital twins are replicas of actual customers in the real world. Once a model is completed, the data can be assimilated and processed from all data points.

This enables organizations to reap unique insights that they have not experienced before. Similarly, their digital twins can simulate how they would react to a certain change or software update for processes or products with nearly 100% accuracy.  

This allows businesses to learn the shortcomings of their products, processes, and strategies. It also empowers them to analyze data much quicker and implement changes based on those analyses.

There is no question how this spurs on the digital economy through real-time innovation. 

Empowering the Digital Community via Innovation Garages:

We have often heard how some of the most massive tech businesses like Microsoft, Apple, IBM started from a garage. This garage was a space for experimentation, innovation, and showcasing the respective products and services each innovator came up with.

One probable factor in the success of some of these garage start-ups was that the brilliant people running them could think of the product design, it’s offering, its demand, and it’s supply all by themselves.  

Innovators such as Bill Gates and Steve Jobs are rare, but the qualities they attain can undoubtedly be put together to create an innovation garage of your own. This is one of the latest strategies in gathering field experts for R&D and creating successful digital products by forming cross-functional teams.

An R&D team in innovation garages should consist of experts in every field, such as an engineer, a data scientist, a marketer, and an operations manager, among others. By having all these teams work on a digital product offering simultaneously, R&D units can consistently produce successful products.

This setup allows organizations to shorten the time it takes from ideation to production and enables all parties to be updated with the latest trends. 

For innovation garages to succeed in their intended purpose, they must know their goal is not to showcase but rather create the next best digital products. Incubators often end up as showrooms for brilliant ideas that cannot be realized.

However, tech companies run innovation garages with a focus on bringing novel ideas using advanced tools and technology. Another added benefit is there is much less red tape. An innovation garage works independently of the organization’s requirements with a true purpose of digital product development.

Perhaps, by simulating the minds of geniuses, the digital economy can accelerate innovation. 

Conclusion:

The digital economy is going through a phase of phenomenal growth. This phase demands organizations to align themselves in a way that they can ride the upward trend. For this, tech organizations must strategize given their resources, reconsider their investment focus. Then plan for scalable digital products and services. Through the adoption of modern technology and implementing new R&D strategies, businesses can thrive under the digital revolution. 

Xavor Corporation has been the partner of Fortune 500 companies for digital product development. Xavor provides infrastructural support, innovation solutions, and agile practice implementation that allows businesses to automate, generate unique insights and garner them for growth-oriented decision-making. Contact Xavor to incorporate Industry 4.0 tools and stay at par with the competition.