Interoperability & Why its Important for the Digital Economy

Interoperability Definition: Is the degree for which two or more different systems work together in harmony. In a modern and digital context, we think of interoperability as the degree to which software can easily integrate and interact with other systems. High degrees of interoperability usually require standards for common languages, rules and processes of operation.

And as the world integrates digitally, the level of interoperability becomes increasingly important.

But why?

Because Nationalism is on the rise and globalism is receding. And unlike historical precedents, as policy decisions around the world shift towards local protectionism, globalists will turn to highly interoperable and decentralized technology as a haven for global commerce and digital access.

Globalists want an increasingly digitalized world, with greater levels of interoperability, and methods to bypass restrictive governments.

An Example of Interoperability

Interoperability is the degree of cooperation and connectedness of systems. A system is highly interoperable when the individual components work in near perfect harmony. It’s a state of operation where information exchange is accurate, accessible and can be acted on reliably.

Think of the NATO alliance as an example. NATO forces are comprised of military personal from multiple nations in a highly interoperable command structure. These separate national forces combine into cohesive units to achieve common goals. And these goals would otherwise be hard to achieve without working together.

But how do these nations come together to integrate military units? And, how do any separate entities come together effectively for any purpose?

They start by adapting their operations to open or uniform standards. With NATO, the military units adopt common command structures, common procedures, and common rules of engagement. ie: NATO creates a set of common rules, beliefs, and systems that are adopted by the individual components. By adopting common systems, the individual components work better as a combined unit.

This is also true of software systems and interoperability is foundational to the significant growth experienced by digital marketplaces.

Software & The Digital Economy

The digital economy places importance on data exchange and integration of different systems. And interoperability is increasingly important for the development of global software ecosystems. ie: Software becomes more valuable when it can integrate unique global communities into one digital ecosystem. And like with NATO, modern software systems frequently establish common standards in order to effectively integrate with one another.

Consider the iPhone as another basic example. Apple constructed the iOS operating system to allow 3rd party developers to develop applications to include on the iPhone. Apple established common standards that 3rd party developers could adopt in order to build software to integrate with the iPhone. In doing so, an ecosystem of commerce developed via the iPhone across the internet.

In the wake of the smartphone revolution, software has become increasingly interoperable. Companies now design and package Software as a Service which provides functional software at scale at limited cost for smaller businesses. Aside from allowing smaller organizations to leverage these systems, SaaS reinforces the common standards and integrative nature of software. This reinforces a robust and global digital economy.

Digital Marketplaces Require Interoperability

The internet is a global marketplace of information. It connects over 4 billion people, 195 governments, languages, and cultures together into one universal melting pot. In order to thrive in the growing digital economy, businesses need to adapt to globalized digital standards and become highly interoperable. Without established norms and processes for interaction, the global digital marketplace becomes a quagmire of slow and inconsistent commerce. By adhering to common standards, software companies around the world have created a globalized digital marketplace.

Moving forward, businesses wont simply create stand alone products. Instead, products will be designed to integrate into the global ecosystem with an ability to connect and add value to a networked ecosystem. Adopting modern open API standards, promoting and supporting third party development communities, and establishing systems of self reinforcing value. An Internet of Things (IoT).