Will technology drive global recovery?

Recently, IBM chairman and CEO Sam Palmisano made an important speech entitled “The Smart Planet: The Next Leadership Agenda” at the Council of Foreign Relations in New York City..

To emphasize the significance of Palmisano’s speech, IBM took two-page ads out in numerous newspapers, such as the New York Times and Washington Post, throughout the world. This can be seen as public relations, self-promotion or the simple realization that the way out of this global financial mess requires a refocus of technology not on the consumer, but on corporate business.

Palmisano’s argument is that technology has permeated our daily lives to an extent beyond what prior generations could ever imagine. Here are some key points from this speech. “The world is becoming instrumented.” A vast array of sensors perform telemetry tasks in every industry that affects our personal as well as business lives. From RFID tags in retail stores to red-light/speed cameras to security systems to hospital instrumentation technology. No matter how mundane, these are now integral parts of our lives.

“Our world is becoming interconnected.” From almost 2 billion people on an ever-growing Internet to the untethered virtual workplace, individuals have accessibility and mobility to time-shift and increase their productivity on a global basis. Add to that the non-human communication of telemetry devices and human to machine interaction, communication technology and services become a necessity for survival, not a luxury. “All things are becoming intelligent.” The PC and cell phone are just the “tip of the iceberg.” Everything from our cars to our cameras to our clothing will be smart.

The real advances in computer technology, information science and advanced analytics software are just in their infancy. As with any child, we are experiencing growing pains. We live in an information age where we have let information, be it an e-mail or a video, consume us rather than allowing technology to process the details and we as humans to process the exceptions.

“Digital and physical infrastructures of the world are converging.” Everything large or small contains or will soon contain a computational engine that can network and communicate. This is a subtle statement that from hindsight caught everyone by surprise. Another definition of “convergence” or a realization that we missed “seeing the trees because we were looking at the forest?”

Developing technology for technology’s sake (feed the consumer and they will feed the ad revenue-based Web sites) and business processes to increase profitability/revenue (make the quarter numbers to meet financial analyst expectations not long-term growth) were myopic goals while the “system was running on all cylinders.”

In achieving these goals we all got sloppy and missed numerous opportunities to utilize technology to benefit society, our county, our daily lives and last but not least our employer.

Palmisano listed numerous examples such as energy waste caused by unintelligent and archaic electrical grids; traffic congestion causing lost working hours and gasoline consumption; corporate supply chain inefficiency reducing business profitability; antiquated global healthcare systems with little or no process linkage/communication (profits first/patients second) creating ever increasing costs and inflation; decreasing water supplies which limit access to safe drinking water and adequate sanitation facilities causing human malnutrition, disease and tainted food production; and financial institution risk taking that created a global fiscal disaster of unprecedented proportion that undermined global government, business and individual confidence.

All of us can add to this list examples of technological sloppiness that have produced waste or loss of productivity/revenue. From the oil crisis to the healthcare crisis to the financial crisis, technology innovation and use have taken back seats to greed. At first this seems to be altruism or socially motivated thinking. Not true, capitalism with technology as its core competency will drive the next recovery.

Good intentions aside, IBM had examples of technology/systems solutions for each of these problem areas. Sales pitch aside, Palmisano had it right — increased technology use is the driving force that will produce a global business recovery. The next global growth period will be business driven not consumer driven. This is not the Internet Bubble of 2000 but the Business Recovery of 2010.

Throwing human resources and/or money at a problem will not solve all of today’s complex interdependent global issues. Add to this the prospect of increased regulation and oversight required to manage ourselves out of this financial mess and restore confidence in the global economy.

Without the creative use of information technology, autonomics, collaboration and information analytic systems and communication internetworking on a global scale, this is an utterly impossible task that’s doomed to failure. Conducting business the “old way” will not work going forward to 2010.

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