Sanjay Negi's thoughts on Current Affairs and Information Technology Directions.

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Sunday, July 02, 2006

The Next Value Horison

Before the Industrial revolution, most economic value add pretty much got created in the agriculture and related sectors. With industrialization, much of the farm activity started getting mechanized, farm produce got commoditized and most value creation role got transferred to industrial goods.

In the last quarter of the previous century, Services started becoming the dominant engine for value creation as manufacturing got commoditized and started retreating to the back lanes of economic activity.

Services of course are amenable to automation and improved delivery through the use of Information Technology and it is not surprizing that the Tech companies are increasingly looking like the new winners in the ongoing transformation of the economic value addition landscape. What next?

It is difficult to say for sure, as no one has a crystal ball to gaze into. However we can expect that Moore's law will for some time to come continue to deliver exponentially greater value for the same buck and therefore the applications and associated infrastructure of today will inexorably and continually get commoditized geeting replaced by ever more powerful and richer technology. The services that the technology helps to deliver will also therefore meet the same fate.

What will remain relatively constant will be the human capability to absorb and assimilate the furiously changing working and living environments. People will need dedicated help to overcome their rapid obsolesence and most value add may actually take place in the cracks opened up by technological disruptions.

Organizations which architect themselves to service these voids may well turn out to be the winners in the next round which is not that far off in the future. Locking in the capability to evolve quickly may well be the competitive weapon of the future, much as securing critical supplies and investing in economies of scale creates high entry barriers to today's corporations. But how is this grid lock over over the capability to evolve built?

Here we are on familiar grounds. By controlling the factors of technological evolution using financial muscle could be a convenient way. Corporations with deep pockets could explore the possibilities of contractually locking out their potential competition from getting serviced thereby hastening their obsolescense.

On the other hand, just keeping current is going to be expensive business, and this gives huge advantages to those having the capacity to spend and thereby opening up the gap with the rest.

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