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The economics of the Digital Transformation – XXI

At stage III a CDT is an exact mirror of its physical twin. This may be straightforward in the case of a product, much more complex in the case of a person’s CDT (what has the person forgotten that is still part of the CDT knowledge space?). At stage IV the CDT is continuously exposed to new knowledge through its interactions with the environment. Furthermore, these interactions change the status of the CDT and can give rise to self created knowledge that clearly makes the CDT diverge from its physical twin. The specific architecture of this external knowledge may differ. Also notice the role played by CDTs instances since without an orchestrator each instance diverges from the others. This is not the case of a person’s CDT as long has it does not become an avatar, i.e. it self-produce instances that may acquire different experiences.
This divergence is not a point if the CDT becomes an integral part of an augmented person.

– Search for knowledge in the network of CDT

Within a company several CDTs may form a network of knowledge. In turn this can be mirrored by a CDT (the firm CDT) or it may exist as a network. That would be the case when CDTs are mirroring knowledge of different ownership domains, like the distributed knowledge across companies in a Value Chain or in an ecosystem. The difference between the two is not trivial.
CDTs distributed over a value chain can interact in a framework of specified (smart) contracts resulting in a predetermined set of APIs and authorisation policies.

On the contrary, CDTs belonging to an ecosystem of companies have to operate in a looser environment and, in a way, need to be “smarter” and more autonomous to take decision on what to share and how to share it (there is not a reference framework regulating the interactions).

Query broadcasting within a predefined network can be implemented as an API and applications managing value / pricing negotiation can be implemented. At stage IV, but we are still far from that, a CDT can manage negotiations as an autonomous system, hence without the need for an external applications.

The search for knowledge may result in a specific knowledge transfer and/or in the establishment of a pairing of CDTs so that together they have the desired knowledge. This pairing is likely to become an important economic assets as CDT moves towards stage 4 (autonomous behaviour).

In case of CDTs representing a person the CDT becomes an agent to access the person or, in future evolution, stage 4, a proxy for that person, delivering knowledge on behalf of that person (see later).

There are a number of conceptual issues requiring further research.
As a CDT moves from stage III to stage IV it diverges from its physical twin, i.e. it is no longer mirroring the physical twin. In a way it is no longer a Digital Twin since it has a broader set of characteristics that are not present in its physical twin. In the case of a CDT this means that the set of knowledge is different (and broader) than the one owned by the physical twin (the person).

This, at stage IV, also leads to a behaviour that is different from the one of the physical twin. This is why some researchers object to the idea of DT moving at stage IV and would rather see an external application to embed the extra functionality, thus preserving the mirroring characteristics of a DT.

Other researchers do not see this as an issue pointing to the fact that at stage IV there is an “extension” of the object (or person) characteristics, an augmentation, provided by the digital twin. At this stage there no longer is a separation between the physical and the digital twin, rather the emergence of a new entity partly living in the physical world and partly in the cyberworld.

In this interpretation the issue of divergence is no longer existing since at that point the Digital Twin (or the CDT) is representing in the cyberspace the augmented entity.

However, this rises a number of ethical, societal and economic issues that are discussed in the following posts.

About Roberto Saracco

Roberto Saracco fell in love with technology and its implications long time ago. His background is in math and computer science. Until April 2017 he led the EIT Digital Italian Node and then was head of the Industrial Doctoral School of EIT Digital up to September 2018. Previously, up to December 2011 he was the Director of the Telecom Italia Future Centre in Venice, looking at the interplay of technology evolution, economics and society. At the turn of the century he led a World Bank-Infodev project to stimulate entrepreneurship in Latin America. He is a senior member of IEEE where he leads the Industry Advisory Board within the Future Directions Committee and co-chairs the Digital Reality Initiative. He teaches a Master course on Technology Forecasting and Market impact at the University of Trento. He has published over 100 papers in journals and magazines and 14 books.