According to Carlota Perez, a Venezuelan academic who specialises in the social and economic impact of technical change, we are now in the middle of the fifth technological revolution of the past 235 years. She calls it the ICT revolution and it began about 1971, when the Intel microprocessor made its debut.
What makes Perez's analysis particularly pertinent is that she says each revolution so far has followed a very similar pattern.
Basically, after a cluster of new technologies bursts onto the scene, there's an 'installation' period that lasts 20 to 30 years, during which a frenzy of investment leads to first a bubble, and then a crash. We lived through the latest crash in the first few years of this millennium.
But that's only half the story. After what she describes as a 'turn' - which can be a difficult period and is probably where we are now - there follows a 20- to 30-year 'deployment' surge during which the technology spreads to all parts of the economy, has a positive impact and is accepted as the standard paradigm.
What does it mean?
In other words, if the pattern holds, about 25 years remain for the ICT revolution to fulfil its full potential and move into what Perez describes its 'golden age'. And unlike previous cycles, when the impact of the revolution was limited to a few developed nations, this time it will have repercussions right around the world.
This model works well for me because I think it explains some of the things many of us have been struggling to get to grips with about our changing world. It also underlines some of the changes firms need to make to maintain their competitive advantage.
Firstly, ICT is creating global opportunities as well as threats. It's true that sometimes the opportunities may seem hard to see. For example, despite much noisy public opinion to the contrary, a recent report by not-for-profit organisation The Work Foundation found very little evidence that jobs had been lost in Europe as a result of off-shoring. As the author of the report, Katerina R"udiger, said: "Technology has always led to people being displaced from some lines of work to others, but what is not happening is a straightforward migration of jobs from North to South, West to East."
R"udiger failed to find evidence of a clearly-defined trend for western multinationals to off-shore work to reduce labour costs. Rather, it found that firms were mixing business models, combining near-shoring and off-shoring to spread their operations around the world while keeping some operations close to home. Essentially, they were 'right-shoring' - getting work done wherever it would be done best. What's more, she found examples of successful Indian companies that were setting up and creating jobs in developed western countries to improve their ability to target their markets.
Not just developed countries
With today's communications and flexible technologies, it makes sense for businesses to organise themselves as agile creative networks, and to do so on a global basis.
Clive Ansell is president of strategy, marketing and propositions at BT Global Services.
What's happening is that this technological revolution is driving change - compelling organisations to become more efficient, putting disadvantaged regions back on the economic map and helping to raise skills levels right across the globe.
The impact is evident from the fact that one-third of IT spending now occurs outside of North America, Western Europe and Japan. And this development will create new innovation in IT, new competitors, new usage patterns, and continued cost improvement benefits for users, according to Gartner.
But as a recent study commissioned by BT, "Building Business with BRICS", reveals, while western executives understand that the so-called 'BRICS' nations - Brazil, Russia, India, China and South Africa - accounted for 30% of global growth since 2000, few are taking advantage of the opportunities for collaboration and new business that this presents. And even fewer are really prepared to engage with the new world economic order.
Which is worrying. Perez's model suggests there is serious 'structural' work for us to do before we can reap the rewards of the 'golden age' that may result from this revolution. Each surge brings with it new organisational paradigms and new best practices, but it's up to firms to implement them.
With today's communications and flexible technologies, it makes sense for businesses to organise themselves as agile creative networks, and to do so on a global basis. That way, we can all take advantage of the different talents and perspectives on offer around the world.
I agree with Perez - the ultimate opportunity is a future "when the amazing, wealth-creating information technology paradigm lifts all boats and produces global welfare". But as she notes, this is the potential, not a blueprint.
To make the opportunity real, companies have to adapt to the new paradigm and continue to invest both in its technology and in people - not just in their own back yard, but right across the globe. Developing nations are obviously keen to tap ICT's potential, and established companies can do a great deal to pave their way.
If business and society work together, this latest technological revolution will prove to be an important force for good all round.
* Clive Ansell is president of strategy, marketing and propositions at BT Global Services.
Share