Perhaps the biggest shift in economies worldwide has been from manufacturing to services. Even in India, the Services sector contributes to over half of the national income. The dramatic growth in the software services sector has been representative of this shift, and along with IT-enabled services, holds huge hope for India going ahead.
In technology and in business, the services component has become increasingly important. In the US, spending on IT has gone up to 40% of all capital spending. From the growth of consulting companies offering to restructure or integrate applications from different vendors to software companies offering their armies of consultants to help implement their software, services have increasingly become more important – the glue – in making things work in enterprises.
An extreme view of the growth of services is offered, based on the example of how Linux was developed, by Thomas Malone and Robert Laubacher writing in the Harvard Business Review:
The Linux community, a temporary, self-managed gathering of diverse individuals engaged in a common task, is a model for a new kind of business organization that could form the basis for a new kind of economy.
The fundamental unit of such an economy is not the corporation but the individual. Tasks aren’t assigned and controlled through a stable chain of management but rather are carried out autonomously by independent contractors. These electronically connected freelancers – e-lancers – join together into fluid and temporary networks to produce and sell goods and services. When the job is done – after a day, a month, a year – the network dissolves, and its members become independent agents again, circulating through the economy, seeking the next assignment.
Vinod Khosla takes this idea further through the concept of “remote services”:
There is no reason to support that in the future, customer support, bill processing, accounting, or any of the traditional functions of corporations will need to be done within a particular corporation or geographical area. Even critical functions like engineering design, architectural design, and manufacturing are being virtualized. They will be offered as remote services, and you will be able to purchase them as and when needed, just as you would buy a drink or place a phone call. Thanks to the Internet, it will be possible to perform these services in the most efficient place, be it Fargo, North Dakota, or New Delhi, India. The remote-services marketplace will be worth trillions of dollars and, more important, it will be truly global.
These then, according to me, are the four themes for technology in the next few years – the Embedded Internet, eBusiness, Innovation and Services. They are the ones which will help define how technology, business and our lives mingle and collide in the coming years. They offer opportunities and challenges: to dream up and create a world which is just unfolding in front of us. In the words of Neil Gershenfeld of MIT’s Media Lab and author of “When Things Start to Think”: I have a vested interest in the future, because I plan on living there.