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The digital economyA tremendous economic change is taking place. We are witnessing the emergence of the Digital Economy. The nature of this Economy is as different as the Industrial Economy was from the Agricultural Economy that preceded it. This change will cause a new organizational modus operandi to come into being. In this article we will examine some major characteristics of the Digital Economy, consider the demands this will make on organizations, and preliminarily assess the gap that will have to be bridged to align organizations with the emerging reality.Every major change that occurs happens within a context. It is the author’s belief that the context that is of relevance to this change, is none other than the Evolution of Life. From simple single-celled organisms Life has progressed through multi-celled organisms, plants, fish, amphibians, reptiles, birds, mammals, to man. At each of these stages the whole of Life conspired with the dominant entity of the age to further develop the complexity of life. Thus from simple assimilation, and mobility, Life pushed to the surface complexities and variation in physical structure, strength, agility, phenomena such as feeling & thinking, and today is experimenting with abilities such as intuition, inspiration, revelation, knowledge through identity, transcendence, and Divinisation of Matter. The various economies that have emerged, have in their secret reality been nothing other than means by which the current leading protagonist in the play of Life, Man, can accelerate his own evolution to the next rung of creation. The Digital Economy is one such phase, and will force humankind to express more of the Truth, Consciousness, Bliss that is at the core of Life, and that is seeking to express itself concretely through the play of Nature. The Digital Economy is marked by a number of distinct characteristics. To begin with, is the dominant characteristic of Digitization. A simple stream of binary language – of zeros and ones, can be made to represent all data, information, and knowledge. Thus, any word, picture, sound, concept, map, can be represented as a series of 0’s and 1’s, which in effect becomes a universal language for communication. A painting, for instance, can be scanned into a computer, be stored in binary language, and then be transmitted over the phone line from the coastal town of Pondicherry in India to San Francisco in USA. Or, a multi-media palm-top computer can be designed collaboratively by a group of geographically separated engineers and scientists, through the instantaneous and ubiquitous accessing, sharing, and exchange of designs and information, represented in the universally accepted binary schema. There are several elements that though developed independently, have now been integrated together to provide this kind of global capability. First, computer hardware has developed by leaps and bounds, to provide orders of magnitude improvement in processing and memory capability at continually cheaper prices. Software has been developed so that the underlying hardware can be easily accessed and commanded, even by novices, to perform complex computing tasks – as a result the use of computers has become universal. Simultaneously there have been rapid advances in the area of telecommunications. The entire globe is connected together via high-bandwidth fiber-optic cable, low-earth orbiting and geo-stationary satellite networks, and other terrestrial networks. Thirdly, a number of software packages have developed which have enhanced people’s capabilities to create sophisticated multimedia documents, integrating video, graphics, audio & text. Fourthly, there has been the development and acceptance of universal communication protocols so that the various documents created through the use of software can be easily and ubiquitously exchanged. Interestingly enough, the universally accepted communication protocol was initially developed as part of a USA Defense Project, to create redundancy in strategic information by distributing it amongst geographic sites in case of nuclear attack. The Defense Agency then, quite contrary to all expectations, released the protocol globally, so that today it stands as the standard in Internet communication. The power of underlying movements, and even the cosmic sense of humor, is highlighted by this incident, where seemingly any instrument, and in this case none other than the US Department of Defense, can be used by that Hidden Force which guides the world’s destiny to fulfil its own intentions. Accompanying digitization has been the characteristic of Virtualization. Virtualization is the capability to interchange and manipulate representations of physical objects. Every conceivable product – such as an automobile, a house, a microwave oven, a shirt, a book, food, is represented virtually and it is this virtual information which is exchanged and manipulated before any physical object is created or exchanged for money. Entire stores have thus begun trading their merchandise in this manner. Photographs, descriptions, prices, other consumer comments, product comparisons, ratings, can be accessed through the touch of a button. Virtualization implies that a more thorough analysis or a more precise search can be conducted before the exact object needed is to be created or purchased. It also implies that individuals and organizations can conduct meaningful work at the conceptual level before bringing it to the physical level. Another characteristic is that of Knowledge-intensivity. Many of the products that people come into contact with, especially in the developed countries, are knowledge-based. Automobiles, telephones, TVs, refrigerators, music systems amongst a whole slew of common appliances are controlled by embedded microprocessors. This means that each of these devices is becoming more ‘individualistic’, by offering a larger spectrum of differentiating features, by actually remembering the habits of its users and either repeating them, or by optimizing performance based on usage selections and patterns. In effect, with embedded microprocessors each device becomes unique, and each user’s life that much more comfortable and livable. The one-size, one-color fits all philosophy is fast becoming defunct. Through each of these characteristics one can see something of a different reality pressing to the surface. People can instantly communicate complex messages to any point on the globe. They can access all kinds of information through the press of a button. Collaboration between diverse functional specialists can take place to create a more integral product. Subject-enthusiasts can share ideas and knowledge with other enthusiasts on a global basis. News of any kind, by geography, by subject, by date, can be accessed through the touch of a button. Interactive intelligence, through embedded processors, can be present at more and more locations in time and space. In many ways humans are exceeding the boundaries by which they have traditionally functioned. A sort of Omni-ability is pressing to the surface. As a result of the Digital Economy there will have to be a shift from ‘monolithic’ thought and action to ‘molecular’ thought an action. In the Digital Economy individuals have live access to knowledge in and from any area. It is also easier for individuals with good ideas to more easily make them a reality, given the easier access to a global network. The result is that empowerment occurs naturally. The implication of this is that effective specialization will come into being. Specialists will be like the molecules that come together to create a certain kind of organizational compound, which will then reconfigure itself once the immediate task is over. This is in stark contrast to the Industrial economy, where economies in scale and production, the one-size fits all philosophy, was the prime driver of organizational design, thought, and action. In the Digital Economy, what is enabled is individuality operating within a planned collectivity. The previous paradigm was one in which a certain collective reality imposed its standards on an individual and the individual was constrained within its boundaries. Now, the individual has the ability to freely express knowledge, create or dynamize it collectively with other select unit-groups, so that in effect a planned collectivity comes into being whenever it is required. To some extent, this phenomenon is already being seen in corporations. A certain disaggregation is beginning to take place, so that corporations focus on core competencies, farming out other functions to specialists. The Digital Economy is also characterized by Channel-efficiency. In the older economies there were typically many middlemen between the producers and consumers of a product. For instance, there could be wholesalers, retailers, sales-agents, amongst other possible groups. With the advent of the Digital Economy, the producer and consumer are directly connected through the Internet. All the non valued-added middlemen are eliminated. As a result, the various markups that occur as a product migrates from producer to consumer are eliminated. The product is thus available at some fraction of its original cost. Further, the consumer is directly in touch with the producer, and in many instances will be able to specify what kind of customized product they would need. A more informed design and production process can therefore, come into being. The various parts of the Economy can begin to operate as a more integrated whole. The Digital Economy is an environment characterized by immediacy, globalization, digitization, virtualization, internetworking, disaggregation and convergence. Yet today’s organizations are inherently structured to almost oppose these characteristics. Instead of immediacy, organizations usually have bureaucratic policies or at best time-bound yet inflexible processes through which communication, transaction, and delivery take place. These internal processes are typically the build-up of years of habit and of an outdated view of reality. Whereas the characteristic of digitization demands a commonly agreed upon and functional basis, in organizations there tend to be many locally created procedures and protocols by which communication is impeded instead of enhanced. Rarely are standards the same across organizations; as a result, a document or procedure, or even a bill of receipt may have to be translated several times as it works its way through an organization. Globalization implies a multi-faceted effectivity in will, to be present in several diverse markets simultaneously – yet organizations are typically structured based on a single concept of customer or a single concept of market. Internal processes are usually designed based on that single concept and propagate backwards from point of customer contact to point of raw material purchase to effect and influence all areas of the organization. Convergence implies the coming together of various distinct industries to create a possibly new product or service in the marketplace. For example, real-time manipulation of one’s personal finances may require a customized hardware device with customized software running on it, having access to a public or private telecommunications network, and interfacing with the user’s bank databases. Therefore, Hardware, Software, Telecommunications and Banking Industries will have to converge to create this service. But this kind of out-of-box thinking requires a completely flexible organization that dynamically reconfigures its own internal processes based on what the opportunities in the market are. Few, if any, organizations have this capability. Disaggregation implies an objective reconfiguring of the organization, so that those parts of it that are not operating at world-standards can be dynamically replaced by external organisms that may be operating at world-standards. This kind of organizational objectivity and dynamic reconfigurability hardly exist. Thus, while the Digital Economy is in its fundamental nature instantaneous, fluid, and supple, the organizations within it, which are mostly the outgrowth of the previous economies and paradigms are not, and some major redesigning and adjusting will have to take place to close this gap. The organizational framework of today has arisen out of the Industrial Economy. The Industrial Economy was characterized by large-scale, less-competitive products, in which efficiencies of production and distribution were usually enough to create a competitive advantage. The efficiency-in-scale paradigm was responsible for the creation of large, hierarchical organizations in which each level unquestioningly executed the tasks allotted to it. Business itself was primarily dictated by a predictable paradigm in which predictable supplies were needed for predictable demands at predictable times to predictable markets. For the most part there were no surprises. By virtue of this gentleness humankind could ease into another kind of operation and ability, a notch higher than that at which the mass had had to operate at the time of the Agricultural Economy. There was certainly a higher degree of sophistication in financial planning, marketing, accounting, and operations than had existed in the Agricultural Economy. Humankind had to grapple with the environment in a progressively more intricate and many-sided manner and consequently the mass of humankind went through a more rapid evolutionary development along certain analytic and organizational lines. The emerging Digital Economy, however, is characterized by a far more complex, varied, and real-time environment. A single idea in the mind of a relatively powerless individual can, for instance, create upheaval in an industry. The playing field itself and the set of possible maneuvers are moving to a higher level of complexity. That which can be imagined, that which may begin as intuition can more easily become reality. The Digital Economy could well become a tour de force arena for Mind. To grapple effectively in this environment, individuals will have to move up a notch in their abilities. Individuals will have to develop the flexibility and maneuverability, the plasticity and suppleness to operate at the level of Mind. Further more, an effective force of dynamism will have to come to the forefront to make a quick reality of ideas. In a sense the entire environment is more supple and plastic and will be shaped to the touches of effective individuals. This is in stark contrast to the fiber of the Industrial or Agricultural Economy, where new ideas would have to be hammered out again and again, tested in furnaces of the powers that be, before even becoming a glimmer in the external world. Many concrete examples of the extreme resistance to change abide – where brilliant ideas, be it in Energy or Transportation or Agriculture, have been shelved because they upset the balance of power. For instance, as many as seven decades ago, a certain scientist had designed the ultimate aerodynamic, fuel-efficient, and maneuverable automobile. Yet, because of the rigidity of the environment the concept could not find effective expression. Contrast this with today’s environment, where completely customized computing equipment is released in the market several times a year. The fabric of possibility has been going through a definite shift. With the emergence of the Digital Economy this fabric has the potential to take on an especially supple character, as a result of which dreams will more easily find expression. Organizations created for the command and control economies of yesteryear will find it exceedingly difficult to succeed going forward. Hierarchy and bureaucracy will be suffocated in their own cocoons of inertia. An organization cannot be bound by the systems of yesteryear, by its own archaic rules of doing business, by the unwritten policies by which people communicate. A plastic, supple, flexible, empowered organization is what is needed to leverage the emerging reality of today. Similarly, individuals cannot continue to be bound by their restrictive thoughts and habitual reactions. They need to become points of infinity. Points through which the infinite possibility that is seeking to express itself can manifest. For that there needs to be a quantum shift in consciousness away from the reaction and habit-bound mannerisms of the past, to light-filled spontaneities of the future. |
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