"Bringing the Future to Your Industry"


Newsweek International

E-Business Ahead


Will the Internet reshape business in the 21st century?  Naisbitt, Negroponte, Kaku, Knoke, Sterling and Gates explore the end of the corporation as we know it — and what may lie beyond.                                                                                                                                By tk

The future is upon us.  There could be as many as 1 billion Internet users by 2000.  According to William Knoke, “the Internet will revolutionize commerce over the next 20 years as did the telephone in the early 1900s.”

     The implications for business are staggering.  Like the railroad, telephone, automobile and airplane, the Internet changes everything.  We are headed for what William Knoke, author of  Bold New World:  The Essential Road Map to the 21st Century, calls the “placeless society” where communications portability makes location irrelevant.  With geographic independence comes the economic irrelevance of the city, the factory, the office building — even the school and the household — each of which are defined in terms of place and proximity to other people.  In the placeless society of the 21st century, it doesn’t matter where you are.  “It used to be that we had to have face-to-face contact,” explains Knoke.  “We had to have customer and supplier meet.  We had to have retail stores to walk into.  We had to come together in 13 floors in a downtown office building to have a ‘critical mass’ to work together.  But in the days of what I call ‘connector technologies’ — computers, telecommunications and transportation — we no longer need to ‘physically’ connect to interact.”

     The logical conclusion is the end of the corporation as we know it — and that is precisely what the futurists predict.  When buyers meet sellers on the global network, intermediaries and middlemen, including banks, stock brokers, salesmen and retailers, disappear, corporate hierarchies tumble, telecommuting becomes the norm, high-tech free-lancers and small enterprises which sell products globally prosper, outsourcing prevails, and strategic alliances and joint ventures compete successfully with monolithic corporations.  “I believe that in many — but not all — industries, the giant bureaucratic behemoths will get their shorts eaten by more nimble competitors,” says Knoke.

     That doesn’t mean that corporations will fade away.  There are still many products and services that require economies of scale — as the record $1 trillion in mergers last year involving U.S. companies attests.  “I still can’t build a 747 in my garage,” says John Naisbitt, whose Megatrends has served as a blueprint to the future for an entire generation of corporate managers. “But I judge that the fastest growing business sector is single entrepreneurs who get on the Internet, advertise their product or service for next to nothing, and who use DHL or UPS as their distribution system.  At almost no cost they can have a global company and deliver goods or services to anywhere in the world in a few days.  As we increase bandwidth, individuals can do all these things.”

     While big business will continue in the Internet era, Naisbitt predicts that successful corporations will increasingly model themselves after such highly decentralized companies as Asea Brown Boveri and Visa International.  ABB, the Swedish-based global corporation (the term multinational is now passé) has reconstituted itself as 1300 individual companies, while Visa International operates a $1 trillion business through a loose confederation of member banks.   “The notion of headquarters is totally out of date, just as is the old Soviet Union model, where every decision was made in Moscow,” says Naisbitt.  “Now, you have a network of organizations where each part functions as if it were the center.”

     Naisbitt even goes so far as to blame the financial crisis plaguing Japan and South Korea, where the 10 largest conglomerates account for 73 percent of the national economy, on the outmoded headquarters mentality.  “We are seeing now what can happen when an economy gets too hop heavy — as opposed to what can happen with more entrepreneurially-driven economies.”

    The new paradigms recall the “small is beautiful” mantra of the 1960s — except this time around, computer networks are the facilitator with a human face.  Naisbitt thinks that instead of making work more impersonal, computer networks will allow enterprises to recapture the human scale lost during the industrial and post-industrial revolution of the last 100 years.  Instead of undifferentiated corporations of 40,000 employees, Naisbitt believes that loosely confederated groups of no more than a few hundred people at most, each of whom know each other personally, will be the basic operating units of the 21st century.  “Creativity happens when everyone knows everyone else, and everyone knows what everyone else in contributing to the whole.  We are reclaiming human scale with the aid of technology.”

    Naisbitt’s own company, Mega-trends Ltd., has 57 joint ventures in 42 countries, but only four employees, including Naisbitt himself.  “We out-source everything and we use the hell out of the technology,” he explains.  “We’re not a virtual corporation — it’s just how business is done these days.”

    Limits of Technology.   the digital era, getting the job done will be far more important than being present in a office from 9 to 5,  says Nicholas Negroponte, author of the best-seller Being Digital and founding director of MIT’s influential Media Lab. The distinction between work and leisure will be more and more difficult to make.  “People will not follow the lockstep obedience of ‘hours,’ be they rush hours, office hours, or vacation hours,” says Negroponte.  “I spend most of my work time in cyberspace; work and play are deeply commingled.  An increasing number of people in the future will find lives where job and recreation are closer to each other.”  

     How long can this bandwidth-driven information revolution continue?  There is a limit to the Age of the Silicon Chip, says theoretical physicist and author Michio Kaku.  Sometime during the next 15 to 20 years, Moore’s law, the often-quoted dictum coined by Intel Corporation co-founder Gordon Moore in 1965 that states that processing power doubles while computer size is halved every 18 months, will reach the “point-one” barrier.  At .1 micron, transistors be-come as small as DNA coils, and processing power will cease to in-crease as a matter of course.  When that physical limit is reached, there will be major disruptions in computer technology as physicists furiously try to exploit new computer architectures, from optical, molecular and quantum computers to chips built on protein and even DNA itself.  “Some computer visionaries say that the Information Age is the victory of bits over atoms, when cyberspace replaced real space,” says Kaku.  “Sorry.  Atoms will have their revenge in 15-20 years — so be prepared for major shock waves that will dwarf the oil shocks of the 70s."

     Still, in his book Visions: How Science Will Revolutionize the 21st Century, Kaku foresees good news over the next decade as the cost of computer chips plummets to a penny apiece.  “This could mean that intelligent systems, which will tame the chaos of the wild and wholly Web, will become as invisible and pervasive as electricity is today.”

     If chips are everywhere, and there-fore routine, and if the information age is reaching its theoretical limit, what is the next frontier? Science journalist and science fiction author Bruce Sterling is betting on a biological revolution, heralded by the controversy over Dolly, the cloned sheep, as the next wave.  “The computer industry will continue to advance prodigiously, but will settle down as an enterprise, reduce its growth rates, and attract much less press attention,” predicts Sterling.  “Bio will take off, amid bitter moral and political controversy, in a thirty year “revolution" that will be quite scary, because bio is vastly more dangerous than mere computers.  Then bio and computers will combine to create a Cognitive Revolution some-where in the middle of the next century, when people begin to industrialize and commercialize neural structures and human thought processes. That will be a very wild development, and will probably mean the dawn of an epoch when people are simply no longer human.” 

     Until then, as Kaku suggests, enjoy the final 10 years of the digital age while silicon is still in fashion, and be ready to join the bold new networked world of instant global interaction and a computer in every pot.  As science fiction writer William Gibson, the inventor the term “cyberspace” says, the future is already here, it’s just not distributed yet. 

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