TECH TALK: Extreme Competition: Five Drivers

Peter Fingar writes in his book Extreme Competition:

We are, perhaps, in the midst of one of the greatest business transformations ever in the industrialized world, a transformation that is being shaped by five key drivers: 1. knowledge as business capital, 2. the Internet, 3. jumbo transportation, 4. three billion new capitalists, and 5. the New IT, where business automation focuses on outward-facing business processes, not back office record keeping. Together, the results of these forces are far greater than the sum of the partsand they are of historic proportions.

1. Knowledge as Business Capital

Specialized knowledge leads to a new kind of workforce with intellectual knowledge workers, such as scientists, able to claim an intellectual capital stake in wealth in the way that industrialists claimed a stake in wealth through monetary capital.

Just as skilled and semiskilled manual workers in factories represented a middle class in the 20th century, workers with specialized practical knowledge (engineers, technologists and technicians) are becoming the dominant economic force. Specialized schooling and certification will replace the apprenticeships of blue-collar workers of the past.

And, with the exception of tasks requiring that a technician work on site with their hands (X-ray technicians, nurses, physical therapists, psychiatric counselors, network cable installers and dental hygienists), such work can be carried out virtually anywhere (today lab tests for patients in New York are analyzed in New Delhi).

2. The Internet

Its not your fathers Internet anymore. But, then again it may not wind up being Googles Internet anymore, either. While acknowledging the risks inherent in any start-up venture, Indian Internet pioneer, Rajesh Jain speaks eagerly of what he calls the phenomenon of the black swana rare, but not impossible, event. Google was a black swan, he said. No one expects the next Microsoft or Intel or Cisco to come out of India, but I believe it is entirely possible. Will Jain out-Google Google? Stay tuned.

The issues that businesses now face have never been larger or more imposing than those posed by the Internet and its potential to restructure the whole economy to achieve heretofore unattainable efficiencies and efficacies in getting work done. Traditional supply chains of the industrial economy are being transformed by value chains of knowledge. The transformation is well under waythere is no turning back.

3. Jumbo Transportation

Megalogistics, made possible by awe-inspiring jumbo jets and jumbo cargo ships, is a key driver of globalization, and just-in-time manufacturing. Just about anything can be shipped within 36 hours, from anywhere in the world, to anywhere in the world.

While the Internet is clearly recognized as a marvel of modern business, extreme competition is also being driven by these physical marvels of extreme logistics. Globalization is a two-sided coin, with Internet connected knowledge work on one side, and extreme logistics on the other; both shrinking the world to where nations-state boundaries are being erased in a global economy. Opportunitiesand challengesof this shrinking world apply to huge corporations and sole proprietors alike.

Tomorrow: Five Drivers (continued)

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Rajesh Jain

An Entrepreneur based in Mumbai, India.