The Technological Future

Technology is seen as an important driver to economic growth. It is through technological improvements that we can gauge the improvements to productivity upon which economic growth is based. In recent years, there have been significant increases in labour productivity through, what has become to be known as, the information revolution.

In the space of a single generation, technology has allowed us to automate and miniaturise industrial processes, giving rise to a sharp reduction in the share of GDP accounted for by manufacturing in the Western economies. This process is now set to spread to the Service Sector of the economy.

It is widely held by technology trend watchers that we are on the verge of another burst of activity in the Information Revolution. By about 2006, the convergence of a number of technologies will allow the automation of many routine administrative tasks.

By 2010, there are twelve key technological trends that will come to the fore. These are:

1. Biomimetics – which allows us to model complex systems against naturally occurring phenomena.

2. Ubiquitous electronics – computer processes are becoming smaller, faster and cheaper. By 2010, they should be all pervasive in everyday goods.

3. Networks – the ubiquitous chip can communicate with other chips to readily form information networks.

4. Invisibility – as devices become smaller, they will be subsumed into the product itself. Design will be dominated by interface ergonomics. Existing devices will integrate into a single unit.

5. Positioning systems – mobile infrastructures will allow us to locate people and things accurately. This could allow us to interact with a digitally enhanced world.

6. Software – most software is over-elaborate with features that the user doesn’t want. This may result in the development of ultra-simple software whish works faster and is bug free.

7. Symbiotic networks – networks have the capacity to self-organise without using any permanent infrastructure.

8. Wireless connectivity – there is an increasing presumption of connectivity. The use of PDAs is likely to increase. This may give rise to software radio, which will then threaten the existing telecoms structure.

9. Storage based networking – this is a software filter that ensures that we only receive the messages that we want to receive.

10. Context dependent services – software will be able to filter material so that we receive the right information, depending upon the context. This is a smart form of rules based systems.

11. AI – developing AI to enhance decision based systems. These augment the human decision framework, but attempt to supplant it. By 2010, many routine administrative tasks will have been automated.

12. Broadband – bandwidth will become broader, faster, and delivered to more remote locations.

As we said, these trends are currently in development, will start to be adopted by 2006, and will be a widely accepted paradigm by 2010. They are likely to have a profound impact on the way in which business is organised and the way in which business is conducted.

The most likely result of the technological changes is that the organisation will continue to operate through a much flatter structure. It is likely to organise to deliver the services demanded through networks rather than hierarchies. Whilst the private sector has adopted a flatter structure, the public sector has yet to do so. This may prove to be a substantial challenge out to 2020. By 2010, the dynamic value network may have come to replace the linear value chain. In a world of “virtual companies”, is the value of a company akin to the value of its networks?

The growth of the Internet will enable network based communities. Broadband technologies will encourage this even further. The growth of networked communities will foster the development of community based lifestyle tribes. This is likely to be of benefit to smaller companies, who have the structural flexibility to respond to changes in global markets, without having the sunk cost of accumulated that prevents larger companies from changing direction. In this respect, small business in Suffolk is well suited to the future prospects.

The use of cyber-space is leading to the de-construction and re-construction of the business environment. New ways of organising business worlds are emerging. The company will divide into:

1. Statics (core areas).

2. Logistics (the distribution channels).

3. Nomadics (the outsourced).

The net will speed up the development and migration of the nomadics within a company. The end extreme will be the virtual company where most functions are undertaken automatically by remote and outsourced processors.

There is then the question of who are the true owners of the knowledge based firm. In many respects, in the knowledge based economy, the true owners of the firm are those who control the human capital of the company – the employees. If this is so, then small business will be well suited in this respect. The ratio of fee earners to total staff is much higher in small businesses, which enables them to leverage the impact of the human capital of the staff.

However, on the other hand, “brand” may be the key asset in the knowledge based economy. Competition is now conducted through the brand. Teams can be brought together to leverage the brand, which drives the concept of the virtual business. ICT has made information transfer easier and cheaper. This is the base upon which outsourcing can be allowed. Goods and services will increasingly resemble fashion goods. Therefore, design and marketing will be the critical edge. Trusted brands will form the basis of value creation. If so, then this would suit the larger companies, who have a much larger pool from which to draw resources to create, develop, and protect their brands.

As global trade barriers are removed, the commercial environment is becoming more competitive. As the pace of change quickens, market saturation can be achieved more quickly. This means that in order to drive sales, companies must innovate in new products.

The move from a static business environment to a dynamic one is likely to be a volatile. Virtual companies are likely to work on a project basis. Cyberspace allows global virtual teams to work on a project basis. It also allows global virtual teams to be formed. Brands are likely to grow in importance in the Internet world. They might be both lifestyle brands and single provider brands.

Technology will do away with many of the existing administrative roles. However, people will be needed to service the newer technologies. It is unlikely that technology will do away with many Care Economy jobs as the human interface will still be needed. This is likely to be quite a favourable trend for small businesses, who are better suited to deliver personalised services, as opposed to the impersonal, and almost dehumanised, service offered by the large, call-centre based conglomerate. This would suit the Suffolk economy, which lacks large conglomerate businesses, and which has a good, service based, small business sector.

As we can see, it is likely that there will be profound changes to the dominant technologies upon which business is based by 2020. These are likely to favour smaller rather than larger businesses as the physical capital accumulation upon which large business is based is replaced by the human capital accumulation upon which smaller businesses are based. Suffolk ought to be well catered for in this respect, with the absence of entrenched larger businesses and with a vibrant small business sector. However, it is by no means certain that Suffolk will make the most of this advantage, and this is the critical uncertainty facing the small business community within the county.

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