Tuesday, July 3, 2007

Innovate or perish

Keep innovating or you’ll perish

From The Statesman

Technological and economic forces are generating innovations like iPhones. They are creating new opportunities, new wealth and new billionaires.
Global corporations must be opportunistic.
They must always be on the lookout for new ideas and the possibilities of their practical applications; and moreover they should be ready to do so before anyone else does. That is the only way a corporation can go from one exponential change to another and always be on the cutting edge of technology and management.
For global businesses, the best strategy is to look for a technology, an idea or a business method that creates new market space and a cyber-niche that never existed before, and establish market dominance until another one appears and makes it obsolete. But a company doesn’t have to be inventing newer technologies; instead it should be on the lookout for them and adopt them. This is one of the reasons that the US companies are offshoring their businesses abroad because offshoring is inshoring and extension of brainpower.
By offshoring work to India, the United States is gaining brainpower. If we network the world’s best brains, the rate of innovation should increase dramatically. But that also means that the rate of obsolescence too would increase, leading to a state of turbulence, which could be a source of self-renewal or self-destruction.
File sharing in creative expression, for example, in music recording, has been generating turbulence that has necessitated new business models, since lawsuits against piracy don’t work very well. The Internet is challenging old business models. Businesses, however, flourish in a stable environment.
Whatever good or evil Microsoft Corp. might have done because of its monopoly practices, Windows operating system has provided a universal standard and created desktop stability. But some time a unique application could be replaced with a clone without adverse effects or disruption. For example, Netscape’s Navigator, which had reached a critical mass, was overtaken by Microsoft’s Internet Explorer.
In the digital age, one cannot count on the blessings of killer applications for too long because they have a short life span. Just as transistors transformed the global economy from industrial to an information age, mobile computing and the Internet are transforming the information age to virtual age. Gordon Moore predicted that every 18 months, computing power will double at constant cost and his law has held its sway. The same has been true of the bandwidth, which is becoming faster and cheaper.
Miniaturisation, mobilisation, and speed have gone hand in hand with the power of networks, whose value increases dramatically with each additional node and hotspot. From subways to highways to public buildings, inexpensive digitisation has begun to penetrate all things, enabling them to network and collaborate and become sentient in a manner of speaking. Whatever is digitised can be networked and shared.
Every human activity can be digitally designed and built with an Internet connection. In short, whatever can be networked makes it both a consumer and a supplier of information, which makes the global supply-chain system of information an inexhaustible source of further value added information.
Networked databases can profile potential customers, for example, for greater marketing efficiency through target marketing. Offshoring reduces transaction costs but of course global corporations should have a larger vision than merely reducing transaction costs more effectively. A horizontal or hetrararchical core and ring management structure - a dynamic and stable core of top executives and a fluid and flexible ring of disposable employees, such as outsourced contractors or offshored workers - is the emerging shape of a modern business. And from this point of view, a global corporation is dynamic network of mutually beneficial and productive relationship with workers, business partners and customers. Not bricks and stones, only digits shall rule. That’s the future.
Let’s keep in mind that the networked world, a world of collaboration first began when telegraph reached a critical mass in 1843, making possible the rise of Associated Press, the first network of collaborative information gathering and distribution. However, not all ideas and inventions have the same impact on society.
Chinese invented the moveable clay and metal type printing press in 1041 with little social consequences for the Chinese society. But when a German craftsman Johannes Gutenberg re-invented the movable type printing press in 1436-1440 and published the Bible in 1452, he couldn’t have predicted the unintended consequences. In the hands of Martin Luther, printing became a revolutionary application, which he used with a devastating effect against the Church and unleashed Protestant Reformation that led to prolonged civil strife in many European nations.
We do not know how the convergence of innovations and emergence of newer practical applications will impact our daily lives and the networked economy in which we work today. For example, how iPhone and its competitors will change the real world as they incorporate the virtual social worlds of Second Life, MySpace and YouTube and the mirror worlds of Google Earth is difficult to say. But an innovative corporation will be on the lookout for a killer application emerging from the great convergence that is taking place now and adapt to its own advantage before anyone else does it.
(ND Batra is professor of communications and diplomacy at Norwich University and is the author of Digital Freedom)

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