COMMUNICATIONS: EXPANDING CONTROL AND INFLUENCE

Combined with the powerful leverage of the computer, the growing network of
digital communications provides an expanding breadth of control in the Virtual Age.
Management, via electronic networks, can be
virtually
anywhere. Fading away are
organizational charts with layers of middle-level management to carry out executive
directives. While vestiges of these organizations still exist, primarily in older companies
with their roots in the industrial age, there is a measurable increase in the
span of control in Virtual Age companies. It is evident from the techonomic metric,
described earlier, of “revenue per employee.” It is also evident in the vernacular of
the last decade: right sizing, lean engineering, flat organization, remote operations,
etc.
Free market economic pressure is the companion of technology advance causing
this sweeping organizational change. Companies must not only produce good products,
they must use the most efficient methods of production, distribution, capital
management, and customer service to provide their products/services at a competitive
price. The organization and use of labor resources become increasingly critical
to the continued economic success of an enterprise. Information technology has
become the tool to optimize labor use, just as mechanization was the tool that
transformed labor patterns from the agricultural to the industrial age. Organizational
structures must change, or the organizations themselves will become extinct.
Ubiquitous communications in the form of high-bandwidth digital connectivity
is opening the possibilities of expanding remote operations. Plant engineers for
Tennessee Eastman operate plants across the world, remotely, by observing plant
performance via distant sensors and making adjustments to processes a world away.
The University of Phoenix and the National Technological University train thousands
of graduate students across the nation by satellite and Internet links rather than in
brick-and-mortar classrooms. You gain access to more information than is available
in the Library of Congress many times a day simply by making a query on Google
or other search engines on the Web. Not only has there never been a period in the
world’s history where so much information was being generated, but there also has
never been a period when that information was accessible in a nonlinear, “searchable”
manner by the masses. The resulting shifts in organizational structure are only
beginning to emerge and will continue to develop as the Virtual Age matures.
The foundational laws of techonomics — continued electronic intelligence,
continued network expansion, and continued organizational efficiency — anticipate
several organizational trends including:
1.
Organization structure will flatten.
A broader span of control, supported
by communications and information structures, will grow simultaneously
with reducing layers of management and bureaucracy in all organizations
driven by the private sector. The pressures of competition will force
nonoptimal (price and productivity) labor use to be eliminated.
2.
Virtual companies will proliferate.
Small leadership teams will commandeer
the needed resources, wherever the best are located, and manage
them remotely using electronic commerce methods. The term “micromultinationals”
has recently been coined to describe technology startups
that obtain capital with a small domestic team while most of the development
labor is scattered around the world. One key to success is to retain
the “crown jewels” of the organization as outsourcing occurs, or the day
comes when the organization has no sustainable competitive advantage.
3.
Franchise structures will continue to grow.
Within this growth structure,
a successful organizational model is conceived, tested, and proven on a
local scale and then rapidly distributed worldwide with electronic checks
and balances to monitor progress and foster success.

4.
Global labor rates will equalize.
Availability of inexpensive global communications
breached the last natural barrier to large differential labor
rates for information workers. Twenty years ago, a transpacific call could
easily be $1 a minute ($60/hour). Today, it is under $0.05 a minute
($3.00/hour). The international labor rate communications differential for
information worker jobs is now very small (thanks to technology advance,
communications deregulations, and capital investment in building the
networks). Indirect labor costs now become important in determining any
competitive labor rates. Healthcare, retirement, unemployment insurance,
workman’s compensation insurance, and liability insurance become significant
labor considerations as the communications costs diminish to
insignificance. Hence, the U.S. consumer is serviced by telemarketing
calls from India, architectural drawings from Taiwan, software programming
from Ireland, manufacturing from China and Japan, and accounting
assistance from Singapore. Traditional barriers to entry for skilled labor
have been eclipsed by the ubiquitous network and virtual digital workflow
in the Virtual Age.
5.
World languages will converge.
The Internet, television, and other technologies
are healing the curse of the Tower of Babel. Today, humankind’s
ability to work together is being restored on a large scale, and the return
of “universal language(s) is the key. Because of TV, verbal language
accents in the U.S. have become more homogenized. Computer programming
in English language (COBOL, FORTRAN, BASIC, C++, HTML,
etc.) has caused the technologically elite in many countries to learn
English. Commerce and communications today are crossing more international
boundaries. According to Manfred Sellner, assistant professor of
linguistics at the University of Salzburg, “English, formerly perceived as
a symbol of linguistic imperialism, is now accepted as the primary vehicle
of economic globalization.”
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Techonomics anticipates a trend toward unification
of languages as more people become bilingual in one of the
languages of major population groups for commerce: Chinese, Spanish,
and especially English.
Whether the job is software development, telemarketing, product service call
center, accounting, drafting, or Web site design, the digital pipeline moving at the
speed of light is not concerned about the source or destination of the endeavor.
In
the Virtual Age labor cost, cultural work ethic and trainability are more important
than societal infrastructure (roads, water, utilities, etc.) as long as the digital
pipeline is available.
In some regions, the first installation of the digital pipeline
will be wireless, reducing the capital and land “right-of-way” requirements for the
infrastructure while leapfrogging the wired infrastructure of other nations.
Hence, another past U.S. labor protection barrier, the great physical infrastructure
for support of commerce in the U.S., is leapfrogged by these innovative communication
technologies.
This competitive pressure is accelerating industrial evolution into the Virtual
Age at an unprecedented rate. The economic barriers to significant labor rate differential for mental labor have been removed by the onslaught of technology in
the digital age. A few of the key product trends in communications to note include:
•
Wireless world
. The combination of diminishing electronic costs (First
Law) and increasing network connectivity (Second Law), along with the
desire to be more efficient (Third Law), is leading to the rapid expansion
of wireless networks. Cell phones have blazed the path, and mobile computers
are rapidly following. RFID tags will enable every package/product
of any significant value to be tracked from cradle to grave, and any useful
information (maintenance, owner, location of manufacture, location of
use) will travel with the product. It will be cheaper to automate this
process, having the information always available, than it will be to maintain
any written records of the product history.
Anticipate an expansion
in the Internet protocol numbering system so every manufactured product
will have its own address.
The RFID communicates to a unique Web
site for every significant product you own, tracking usage patterns, location,
maintenance records, etc. Expect RFID in passports, too, following
people across every border. Blue Tooth technology will allow handheld
devices to communicate with each other while they also communicate
with any intelligent device requiring transactional information (vending
machines, toll plazas, checkout registers). The wireless world will complete
the promise of 7/24/365: anyone, anywhere, anytime. The access to
products and information that companies like Amazon and Google have
brought to the desktop will be available ubiquitously. Instant gratification
just keeps getting more gratifying, instantly, in the Virtual Age. The realworld
delivery companies (United Parcel Service, Federal Express, etc.)
should see continued expansion as they become the physical fulfillment
channel for virtual commerce.
•
Media convergence: home, mobile, vehicular.
Convergence is happening
in three key areas today: home media, hand-held devices, and vehicular
media. The pockets of our generation are filled with small, electronic
gadgets, thanks in no small part to Moore’s Law. Cell phones, digital
cameras, personal digital assistants, video cameras, MP3 players, personal
dictation devices, web browsers, e-mail sending and receiving devices,
Global Positioning System (GPS), and Blue Tooth activating keys are
cluttering our pockets and countertops. The “Swiss Army Knife” of mobile
convergence will emerge as the device that joins many of these functions
in a small, reliable, high-performance package. Many cell phones now
take pictures, include e-mail, track GPS, play music, and so on. The next
decade will bring an army of product offerings that seek to find the market
optimum between functionality, price- and ease of use.
As chip performance
increases (First Law) and the wireless network expands in coverage
and capacity (Second Law), the ability to package more media
forms into the same package will continue.
The question remains: What
is the market interested in, and what price will the market bear? The
successful business models will arise from the hardware/service models that currently dominate the cell phone market. Such an approach allows
the high-entry-level cost of new, cutting-edge technologies to be distributed
over several payments of a monthly service agreement. The resulting
residual service payments create predictable revenues, typically with
strong profits, once the capital of the infrastructure is recovered.
•
Vehicular media expansion
. With the advent of GPS in automobiles and
trucks, color displays in vehicles are now becoming commonplace. The
conflict between useful service and driving distraction is growing. Convergence
in the automobile will bring together the same devices as the
handheld convergence, with the addition of a screen large enough to
provide maps and entertainment. These systems are now available in highend
vehicles and will progress into mass applications as price falls and
the features and network increase. Anticipate widespread use of mobile
text messaging, web browsing, MP3 interfaces, DVDs (on rear screens),
integrated GPS, integrated mobile phone coverage, and a smart sensory
system reporting vehicular conditions to “big brother” in the event of an
emergency. As the network of intelligent sensors on our major roadways
is expanded, anticipate communications of that information and of
weather information directly to the vehicle. Honda has developed an
interactive path-planning agent that takes traffic information into consideration.
Also anticipate a host of safety sensors that monitor speed and
following distance, alert when highway sideline is crossed, and monitor
road conditions to recommend safe speeds. The network of networks,
combined with wireless access, will provide traffic information, weather
information, hotel availability, make dinner reservations, and read your
e-mail to you as you drive. Most of this is already available in vehicles
as optional products, but it will soon follow First and Second Law trends
to the mass market.
•
Ubiquitous sensory network.
According to
One Digital Day,
you should
carefully consider how you look in New York City, because you are
captured on video over 20 times in the typical day.
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Video cameras in
elevators, lobbies, restaurants, convenient stores, gas pumps, street lights,
etc. are capturing and saving, at least for a while, your image.
Camera
and storage costs have plummeted due to Moore’s Law, and remote
cameras can send information to a central repository via the expanding
network.
Cameras do not just track us; they track our transactions with
the aid of the network. Federal Express captures a digital image of every
package it ships (over 3 million a day in the Memphis processing center)
and retains this information for months in case of a delivery question.
Major highways have sensors to monitor and redirect traffic flows and
control traffic lights. New vehicles have global positioning sensors that
track location, speed, and perhaps even cargo manifests. Cellular telephone
towers will be equipped with sensors to monitor the air quality to
provide early warning for pollution alerts or terrorism acts. All the
foundational laws of twenty-first-century techonomics point to an ever-expanding network of sensors, data collection, data storage, and automatic
evaluation of our every act.
•
Automated bureaucracy.
Although this may sound like an oxymoron,
the automated bureaucracy is growing at an increasing pace. A combination
of high labor costs (economics) and advancing computer capabilities
(technology) has made the replacement of human mental labor economically
possible and a competitive necessity. Touch-screen systems are
eliminating the need for bank tellers, post office clerks, cash register
attendants, and tollbooth operators. Automatic telephone systems eliminate
the need for receptionists and greatly reduce the number of personnel
needed to field product inquiries and technical support. Automated form
processing for everything from loans to computer orders streamlines the
labor content. Look for more evidence of the automated bureaucracy in
retail stores as they trim costs to compete with the most efficient purveyor
of automated bureaucracy, the Internet.
•
Personalized pharmaceuticals.
Many advances in the understanding of
DNA and metabolism have been made in the last decade due to new
imaging instruments (First Law), massive data processing (First Law),
and collaboration (Second Law) in the research community. The field of
personalized medicine, particularly personalized pharmacology, is emerging.
This refers to the development of pharmaceuticals and treatment
methods based on the DNA of the individual being aided. Rather than a
blanket approach to a given disease, these treatments take into account
the DNA configuration of the patient to determine the treatment option
most likely to succeed, even to the point of creating drug delivery “tags”
based on DNA from the patient. Without the massive computational effort
to identify the human genome in the 1990s, the information needed to
develop these treatments would not be available. The Human Genome
Project represented massive scientific collaboration from many participants
to address a large research target simultaneously. The next step in
the effort is to convert this data and knowledge into treatment regimens
resulting in personalized treatments. The network of networks will be able
to track the spread of epidemics and the effectiveness of treatments on an
ongoing basis, provided confidentiality considerations do not make information
inaccessible.