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THE INNOVATIVE FUTURE
What
will the world of work look like in 2025? Major shifts are in store for
innovation and entrepreneurship
Across the world in 2025, hundreds of millions of
people will work as micro-entrepreneurs and as partners in what have been
called ecosystems’.
Advanced technology will also create more permeable
boundaries between full-time workers and those that work on a project or
joint venture basis. It will enable tiny businesses to look up to others
and by doing so, create clusters or ecosystems with scale and power.
The very same developments will also lead to the
rise of global mega-companies. These will be able to speedily bind many
hundreds of thousands of people working on tasks for millions of customers.
Around this central core of the mega-companies will be ecosystems of
thousands of entrepreneurs running small companies, all co-coordinating to create
services or build products.
What’s so fascinating about technological
developments is that they make it increasingly easy to coordinate across
the horizontal, without always resorting to the vertical, hierarchical
coordination. We can see this merging with the crowds of people who work on
GNU/Linux using open source code to develop and improve the system. Or we
can see it now in the way that Wikipedia is evolving to include hundreds of
thousands of people who are actively cocreating to build a global source of
information.
In the past, it was the developed countries in the
West and Japan that created hubs of innovation. Think of Silicon Valley or
how Japan became a hotbed for innovation from the 1950s onwards. This focus
on the developed world was reflected in the locations of research and
development laboratories, which multinationals kept resolutely in their own
countries.
A combination of investment, education and a
strategic policy focused on new technologies, will spur the development of
new clusters of innovation in emerging economies. Witness the rise of
nano-technologies and biotech in Beijing; digital media and genomics in
Seoul; bio fuels in Brazil and automotive technologies in Poland.
One of the likely drivers of frugal innovation in
India and China is the return of the diaspora. From 1980 to 1999, 25 per
cent of Silicon Valley startups were Indian or Chinese entrepreneurs, and
between them, they generated $17 billion in annual revenue. By 2005, that
percentage had increased to 30 per cent. Many of these entrepreneurs will
be using their skills and networks back in their home country as the shift
of economic energy moves to Asia.
In India, the power-houses of value creation were
in the IT sector, led initially by companies such as Wipro, Infosys, Tata
Consulting Services and HCL Technologies. Many of these companies began
their lives as the IT back-office of the developed economies. However, just
as Chinese manufacturers moved up the value chain, the IT sector in India moved
up too. In 1995 for example, Airbus and Boeing had both outsourced their
basic back office tasks to Indian companies.
What is fascinating is the extent to which the
focus of innovation is on cost innovation – using resources more
thoughtfully and redesigning products more frugally. The Tata Group’s Nano
car, for example, with the dream of the ‘one lakh car’ built innovation
around manufacturing, procurement and value chains, saw the price drop to
around 40 per cent of a small European car. Similarly, Bharti Airtel
slashed the cost of mobile-phone services by radically innovating around
its suppliers.
Sometimes, these innovations come through
entrepreneurs creating entirely new businesses. Think of money transfer
from mobile phones. This was not a Western development, but was pioneered
by the Kenyan company Safaricom. In the wake of Safaricom’s success, the
technology was taken up by Africa’s biggest cellular network operator, MTN,
and rolled out across many African countries, to be followed by rollouts in
China and India.
The future will be driven by innovators, but they
will be drawn from throughout the world and their effect will be similarly
felt globally.
Lynda Gratton ET130917
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