The six themes I intend to talk about:
- Information Technology and the Internet: Both will continue to impact businesses and consumers for the next few decades. This revolution is just beginning. It is the fourth big revolution of the past 250 years, after the industrial revolution, powered by the steam engine, the railway age which shortened distances and opened up new markets, the electricity age. The age of information technology started with the advent of computers in the 1950s, but took off with the proliferation of PCs in the 1980s. The Internet has helped in linking these computers, and thus the people and companies.
- Low-cost Computing and Communications: Most of the world cannot afford thousand-dollar computers. But the world needs computing. Even though the cost of computers has fallen by an average of 35% per annum over the past 30 years, they are still unaffordable by the vast majority of the world. The communications revolution has also cut down costs, but the new set of technologies just coming out will create a “ubiquitous, unbounded, untethered” world – connectivity where we want it, and how we want it, and affordable by the mass market.
- Business Process Re-engineering: What began with the focus on business processes in the early 1990s is continuing. The added variable now is the Internet. As intelligence can now move to the edge (in networks and in companies), how decisions are made and how enterprises interact is changing. This will not just impact the big businesses, but also the small and medium-sized businesses, who make up 80% of the supply chains in the world. How enterprises interconnect and bring down transaction costs by not just smarter e-procurement and distribution, but also outsourcing is what “eBusiness” is all about.
- Software as a Utility: The enterprise software revolution is going to its logical conclusion. As software becomes increasingly critical, it is becoming like electricity: it will be available on tap, and we will pay for what we use. The first-generation of Application Service Providers may not have succeeded, but what they have pioneered will radically change the way companies worldwide think of, use and pay for software.
- Services Shift: Nearly 60% of the US GDP now comes from services-oriented businesses. Technology is already bringing about similar shifts away from agriculture and manufacturing to services. It does not mean that we need less food and products. It is just that the contribution of services (healthcare, finance, media and entertainment, for example) is increasing and there are more people involved in these areas.
- Emerging Markets Opportunity: Two-thirds of the world’s people live in the so-called developing countries. The rich countries have had it great: with 15% of the people, they have accounted for 90% of the spend on IT and 80% of the Internet users. This will change going ahead, as the world’s “poor” get online, and leapfrog intervening generations of technology. Witness for example the adoption of cellular phones in China, India, Mexico and many other countries.
The challenge lies in being able to put these trends together and create new and innovative businesses, which require a base not in the Silicon Valley but in countries like India and China. As we solve some of our local problems, these solutions can now be transplanted in other countries just like us. Their people may not all speak the same language, but the language of business and innovation is identical.