A Digital Debt Crisis?
It sounds scary, but not really. In fact, should it happen, the end result will be better technologies and smarter innovations that benefit us all.
It all seems very slick, the launch of the rabbit AI device, the AI pin, Apples VR headset, Google’s AI product launch video (that turned out to be fluffy stuff). The technology industry is well skilled in the art of hype and hyperbole. Yet there’s an aspect to all these technologies, rarely it seems, considered. That is technology debt.
We may perhaps, be headed to a form of Digital Debt Crisis. While it does have financial implications, it has other, sociocultural implications that could hamper current innovations and progress far more than any regulations and laws. Yet result in significant advances that are, in the end, much better for us.
What are the implications of a Digital Debt Crisis, can it be avoided and what might be the upside to such an event?
If we do end up in a Digital Debt Crisis however, it won’t be that one day we all wake up and feel immensely relieved that there’s no notifications on our devices or that we get a day off because all the systems at work are down. Nor will planes fall out of the sky in Hollywood fashion. It will be a slow, accumulating effect, perhaps over a period of years. It may already have begun and a signal might be the productivity paradox Information Technologies gave us.
What is A Digital Debt Crisis?
We’ve never faced one so it’s hard to define precisely, but we might define it as follows;
- The technology debt in organisations outweighs the costs and benefits of adding new technologies to a degree that significantly impacts the market.
- IT systems become more complex than we can effectively manage economically.
- Consumers no longer find innovations and advancements significant enough to warrant rapid updating of devices and software products.
- The energy costs of these complex systems becomes too high a burden on organisations.
- The management of data becomes too expensive in economic terms
- Significant declines in the use of digital technologies by consumers and business
- Skills shortages across multiple sectors in the tech industry (this is already an issue.)
The Elements forming a Digital Debt Crisis
It’s an issue that every CIO or CTO and IT leader has to deal with in just about every single company, especially large ones like the Fortune 500. It’s an issue that has held many medium to large organisations back from deploying AI tools. Technology debt.
Technology debt is all the old and ageing out (legacy) systems organisations in the private and public sectors use. Legendary database systems, old code still keeping servers humming. Oddly enough, there is still work for 4Tran and Cobolt engineers. We now talk of data lakes and soon will talk of data oceans.
The airline industry is a classic example of technology debt with some of the code that runs the Gemini reservation system being upwards of 40 years old. It’s actually quite a marvel of how that system still works.
AI has been positioned as being a code wizard. That software engineers should start preparing for a new career. Not yet it seems. New research has shown that AI churns out a lot of crappy code too and that it means humans have to spend more time, not less, looking through code to make sure it’s good. The economics of AI as a master software developer aren’t yet playing out as forecast.
Then there’s the variety of economic factors. OpenAI, Microsoft, Google and others have yet to figure out a profitable model for many of their AI tools, especially Generative AI (GAI.) It is not a cheap technology. Unless they can make operating GAI and some other AI tools cheaper, they’ll be forced to raise prices. How much are businesses and consumers willing to pay?
The Problem of Adding More Data Management
AI is a data gourmand, hoovering it up everywhere it can. AI is an insatiable beast for data and some suggest we may run out of data to feed that beast. Some have suggested using synthetic data, kind of like the tech industry version of the food industry creating over processed food with chemicals our bodies just, well, pass out the other side.
We are constantly creating vast amounts of data, some structured, some unstructured (like social media.) All this data needs to be managed, cleaned, evaluated, kept in order and of course, hosted somewhere.
There is a huge behind the scenes race to not just create better chips for processing with AI software, but the data storage systems to hold the data. From the storage devices themselves (hard drives) to the vast buildings needed to host the centres. It is a Herculean task.
That data needs to be backed up into redundant systems as well. That’s more money. Then, data storage systems too are advancing. Companies are in a constant struggle to budget the updating of those systems. It is the same for Google, Apple, Facebook, Amazon. They have invested billions and that issue is going to get more complex, not less.
Then of course is all that energy. The energy cost of AI tools may well be a key reason Artificial General Intelligence (AGI) ends up not being economically viable. No doubt, advancements will be made. But can they be made fast enough?
The Outcome of a Digital Debt Crisis
consumers and corporations will stop spending on significant technology updates and investments. In industry, budget lines for dealing with technology debt will grow, while budgets for new technologies will shrink. There’s probably a coefficient somewhere in there. A variable to watch for as an indicator.
Consumers too, will try to get more out of the devices they have. We already see this in the decline of smartphone and tablet renewals. People are holding on to their devices longer. Some consumer device makers may reduce the prices and quality of their products, trying to force consumers into faster device upgrades. In the long run, this will fail.
So a Digital Debt Crisis will result in fewer investments in new technology. While the tech industry may excel in creating hype, cultural disillusionment from the promises made with the failure to deliver isn’t helping the case for the tech industry.
The Benefits of a Digital Debt Crisis
Innovations and advancements won’t stop. They may just become more useful overall. Rather than a constant barrage of new features in software, the battle may be to make those tools work better. Instead of selling on features, software companies will sell on quality of use. So, better software.
The makers of software and hardware for industry may retrench and spend more time on backwards compatibility and find innovative ways to better manage technology debt. The result again will be better software, better data management and better hardware that can deal with technology debt and be better for future advancements.
These are major economic forecasts. A Digital Debt Crisis is the free markets at work, an economic force that demands better. The Digital Debt Crisis won’t cause any type of economic collapse, but it may well see a number of technology companies go under, while seeing a rise in not just the quality of technology products and services, but a whole new slew of innovations that are more valuable to buyers than shareholders.