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Venture Chakra
The Choice to Shape the Future - By
Regis McKenna
Handy Links
Extended reach and all-inclusive access characteristic of the
World Wide Web has caused the globalization of technology to be
recognized almost universally. The international flow of goods,
services, equity and capital are intrinsically tied to high-speed
information networks. Despite optimistic expectations the evolving
economic, social, and political consequences of this increasingly
sophisticated Web of interrelationships are quite uncertain. It
is, however, within our capability to shape the future by thinking
well beyond the technology.
In centuries past, global trade had negative economic, political
and social influences on less-advanced, resource-rich geographic
regions while it greatly benefited the more powerful trading
nations. In 500 years of history, those who controlled the
technology - from ships and armaments to food production and
manufacturing - reached beyond their national boundaries to
control and shape the destinies of over 90 percent of the world’s
population. The industrial revolution brought new players into the
main stream but it did not change the industrial and economic
balance of power in terms of global participation. Many pundits
predicted that the technologies emerging 100 years ago would bring
peace, prosperity and expanding opportunity for all. Although the
past century was indeed filled with conflict, and nations divided
along the lines of economic and military power, progress was made
toward a more connected and interdependent world.
Global GDP expanded 16-fold in the past 50 years, due mostly to
trade, and more recently due to information technology-based
products (The Economist). And yet, more than four-fifths of the
world’s people still have little control over their own economic
destinies. Some 40 percent of the world’s peoples, for example,
have little or no access to health care, and one third of the
world’s population is technologically disconnected, neither
innovating at home nor adopting foreign technologies.
The hope and vision for the 21st century is that technologies
expressed in new and revitalized digital information and
communications networks will not only bring nations into closer
harmony, but will also give the “have nots” greater access to
new tools for self-empowerment and growth.
Focusing on the technology, however, is only half the solution.
The United States grew throughout the past century due in part to
the emergence of an affluent “middle class.” The value of the
“consumer” is often overlooked in economic development, yet it
is as important to the growth and prosperity of a nation as is its
technology base. Henry Ford’s idea was not only to mass-produce
an automobile but also to pay his workers sufficient wages so that
they could afford to buy the products of their labor. For both
advanced nations and nations who strive to become advanced, the
development of human resources is now more essential to progress
and successful trade in the information age than at any time in
the past.
Today and in the future, the keys to economic progress are
intellectual capital and the progressive shaping of the
marketplace through innovation and efficient implementation. The
hope for emerging nations is that they move from being exploited
to being interactive, beneficial participants in the global
economic network. This is why so many nations seek membership in
the World Trade Organization. However, succeeding in the new
century will require the leaders of both advanced and emerging
nations to reevaluate infrastructure investment priorities so as
to encompass the education and development of their people.
Success will further require nations to open their borders,
allowing access to flourish. Access educates. Investment in the
future of people as active participants in economic development
must be seen as a stabilizing force and become part of the
long-range strategic market development process.
THE MASS METAPHOR
Each era takes on the metaphor of the dominant technology. Mass
production stimulated the concept of mass markets, mass education
and mass media. Under the “mass” metaphor, people become
objects to be controlled and manipulated. The unique contribution
of an individual as a citizen or consumer was seen as a deviation
from efficiency. In the new economy, the metaphor is “open
networks”, and participation adds value.
The technology of today, such as programmability, allows the
efficiency of mass production while offering almost infinite user
choice. Technology is enabling a social structure where people can
both be a part of the community at large and retain their
individuality and creativity. This phenomenon is flipping the
marketing paradigm from mass manipulating to mass listening and
responding to customers. It has even changed the language of
business, as expressed in the phrase “customer relationship
management” (CRM).
In the past century, we witnessed the concentration of power in
the hands of some who used technology as a destructive,
controlling force limiting choice and access. Today, information
and communications technologies are based on open systems where
freedom of access and choice flourish. The World Wide Web is a
democratic medium enabling access to supercede broadcast. Access
to information is seen as empowering rather than controlling.
However, unless this empowering resource can be grasped and put to
productive use by more of the world’s people, it has no such
optimistic future. It may, in fact, create more conflict by
distancing people from the economic opportunities presented by
choice and access.
New markets and a growing consumer base will be as essential to
the growth of global enterprises as it was to expanding the
markets within the United States over the last century. The
investments advanced nations and global businesses make in
developing countries should be made in the spirit of strategic
self-interest. Businesses that learn from local markets and
establish intelligent distribution systems with convenient
consumer access will be the ones most likely to sustain their
presence over the next 100 years.
To prosper, technological progress must be planted in the fertile
ground of a progressive and liberal political, economic, and
cultural environment. It has been my experience that electronic
networks are more effective when applied to any type of enterprise
where relationships and mutual philosophies of progress exist.
Educational systems must adopt new ways to engage students in
global relationships. It is through such relationships that young
people experience the changing world, become inspired and
empowered to seek advancement. Education is increasingly global,
particularly at the university level. The Internet is increasing
communications among younger students as well. Early on,
multicultural relationships become the basis for lasting global
networks. In the U.S. and Japan, many business relationships are
initiated when executives network at their respective
universities.
Businesses today are driving a new kind of international network
based on information flow and mutually beneficial information and
economic exchange. Regional trading “networks” such as NAFTA
and Mercosur have helped to accelerate trade liberalization along
with industry privatization and lower tariffs. As we move into the
21st century the world’s political, economic and social
structures are entering a new interconnected theatre accelerated
by economic restructuring and self-interest. In other words,
businesses are leading a new economy and possibly a new economic
order for the interconnected global community.
BUSINESS-TO-BUSINESS NETWORKS
Business-to-business networks do far more than improve efficiency
and productivity for the enterprises involved. They connect people
of different cultures and ideas. They foster the value of shared
intellectual capital, mutual goals and objectives, and diverse
team collaboration. The electronic network not only facilitates
the collaborative nature of work, it also “educates” the
participants in subtle, yet effective ways. Silicon Valley
developed because a network culture of relationships existed long
before the Internet came into play. People who had worked together
in one company came together to create another company with a
common thread, the venture capitalist, engaged as board members.
The network was already in place. The Internet extended the
connections, made the network more efficient and further embedded
the concept in the culture. Today, entrepreneurs who learn how to
network have a greater chance of success because of the leverage a
community of financial and intellectual resources offers.
For many countries, this new connected environment comes at a
significant time. Since the end of World War II, the world has
become ever more fragmented. The World Trade Organization now has
more than 135 members, with some 30 or more countries awaiting
entry. In 1948, only 23 nations participated in the first round of
trade negotiations under GATT (General Agreement on Trade and
Tariffs). Since that time, the volume of world trade has been
multiplied by 16, and manufacturing exports by 31(Financial Times,
Martin Wolf “Wealth of Nations,” May 19, 1998). Nations have
moved from dependence to independence and now, due to the economic
benefits of trade and the World Wide Web, they are moving to
interdependency.
In Latin America, for example, with the exception of Cuba every
country has become a market economy over the last decade.
Information technology and computer and telecommunication markets
have been growing rapidly in this region due to privatization,
lowering of trade barriers and the development of cross-border
alliances. Since the collapse of the Berlin Wall, ideological
competition has been replaced by economic and market share
competition. Yet business executives know that they must connect
to compete. They must foster success in all markets in order to
grow. Self-interest has moved into the global marketplace and is
fulfilled by being connected to others.
In a real-time world, connected by vast and swift communications,
business must learn to adapt and participate. Trade barriers are
coming down all over the world. Deregulation and privatization is
creating a more intense and competitively demanding global
environment. The next decade will bring vast changes in our global
landscape. With these changes will come opportunity for those who
prepare and pitfalls for these who fail to respond. Digital
technologies are expanding faster than any previous technologies
we have seen in our history. This is because the cost of
processing, storing and moving bits and bytes, has declined from
thousands of dollars per unit of measure just 25 years ago to
pennies per unit of measure today. It costs less today for entire
libraries of information to move across thousands of miles than a
single international voice call cost 50 years ago. Wireless
communications allow rapid development of infrastructures while
providing an entrepreneurial bypass of traditional state-owned
telecommunications companies.
PEOPLE THIRST FOR CONNECTION
From 1990 to 1998 – less than a decade – the number of United
Nations member nations with cellular service grew from 50 to over
150 countries. Privatization has increased competition and allowed
new technologies to move into new markets. The globalization of
technology is seen as a unique phenomenon of the information age
reaching further into social strata deeper and faster than we have
seen from any empowering technology of the past. Wireless
connection will connect more people in just 15 years than the
hard-wired phone system did in the past 100 years. Today, sales of
cell phones are growing faster in poor countries than in advanced
countries, with a 40 percent increase in 1999.
In the past century, technology was frequently used to exert power
over others or to broadcast one-way propaganda to passive
audiences. Mass media had little respect for individual choice.
Mass production delivered the “one size” fits all approach to
marketing. The new technologies are all about being connected and
interactive. They are about participation, choice and
self-fulfillment.
As a result, the way businesses interact with markets and
customers is changing rapidly. The new technologies of mass
customization, computer-based services and logistics are fostering
a radical change in the concept of marketing. The ideas of
one-to-one marketing and customer relationship management (CRM)
are only possible when the infrastructure of a business has an
efficient, reliable IT and communications infrastructure. As
demands on corporate growth and competition dictate, this
infrastructure will be expanded globally. The new marketing
concept is not based on mass media spewing out propaganda-like
messages to manipulate the minds of consumers. Rather, it is based
on listening, responding and adapting to the customers and
markets. Metcalfe’s Law states that the value of the network
increases by the square of the number of users. The new concept of
marketing, and one which I believe will evolve globally, will be
much more attuned to the reality of the World Wide Web. It will
value every participant as adding value.
As business and society are embracing the new paradigm, we need to
better understand the opportunities and potential downsides of
these new technologies. We need to better understand them within
the context of social progress. It is my firm belief that in the
coming century, more change will be forced upon us from outside
our geographic, social and cultural boundaries than from within.
Technology will have an enormous social, political and economic
influence. We can foresee neither an unlimited progression of
prosperity for all nor a continually widening gap between those
who participate and those who do not. Most advanced countries and
emerging nations realize that we are entering a century of global
interdependency. They know that they must participate in order to
progress. Harnessing the capabilities of the new technologies,
however, will take more than connecting to the web; it will take
know-how and investment in the development of human intellectual
capital.
Technology itself cannot create the environment for progress.
Governments and businesses must be aware that rapid changes in the
connected global marketplace no longer tolerate slow or hesitant
players. It no longer tolerates those who close their minds or
borders to open communications.
Connecting technologies exhibit a very different characteristic
than those of the past: they are interactive. They allow the
producer of goods and services to listen, obtain feedback from the
marketplace and become more responsive. They move across boarders
unencumbered. They allow value-added services to arise because
they better understand the needs and wants of the marketplace,
with near instantaneous response. This is not all good news for
local economies. They must understand that local businesses are at
great risk as larger, more information-sophisticated companies
enter their regions. We have seen a microcosm of this phenomenon
in the United States. As large and powerful retail organizations
moved into small towns, local businesses that were unable to
compete vanished. Unless small town and local industries adopt new
ways of building and reinforcing network communities, they will
vanish.
The challenge ahead is difficult and complex. Yet opportunities
abound. One half the world’s population has never made a phone
call. One of the reasons for this is the cost and time of
installing the old copper infrastructure. That is all changing.
Today, a communications infrastructure can be put into place much
cheaper and faster. There are about 160 communication satellites
circling the earth today, with plans to launch more than 1000 in
the next decade. These new satellites will carry all forms of
digital information. The fiber optic web backbone is expanding
bandwidth so that the full expression of human interaction will
soon be experienced in real-time through a multiplicity of
devices. But more importantly, the new infrastructure will be
interactive. People will experience interactive communications in
ways we can now only imagine. The reality of access will be
available to people in the remote jungles of the Amazon or the
distant towns and villages of Africa, China, Australia or India.
Access to abundant new sources of information and interaction with
distant peoples of the world will be readily available. Sovereign
borders are vanishing, along with time and distance and many of
the concepts and practices based on the thinking spawned by the
mass production paradigm. Some might argue that this technological
picture of the future is all a fantasy of the future. Perhaps, but
it is one we have the choice to shape. |
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