Tuesday, January 27, 2009

Leapfrogging ICT (Information and Communication Technology)

Leapfrogging ICT

(this will be a string of blog posts on this topic to prepare leading to a presentation at the M√ľnchener Kreis on May 12th, 2009)

In various emerging countries we are observing a tremendous growth of mobile communications. In some African regions it is already more probable to have phone coverage than electricity; Nokia's growth in the past years has been fueled by cheap, but profitable devices for underdeveloped markets; conducting banking businesses when there is no bank can be done via mobile phones. These examples and data points show how a very modern technology - the mobile phone, connected to an IT backbone - can spread swiftly in places where previous technologies have not been seen.

For developed countries an evolutionary approach to technological innovation is the norm. In the example of Information and Communication Technology (ICT) phone calls were first made over fixed phone lines, then these lines were shared with slow Internet access, later separated electrically into analog phone and digital data connections (DSL) while in parallel mobile phones became widespread. Now voice calls are often still be made on the plain old telephone system, over data lines (VOIP), or the mobile phone. Internet is accessed over DSL, cable-TV lines, satellite, wireless LAN or, more and more so, the mobile network.

For emerging countries this development can look very different. When such a mature technology like mobile communications meets an environment that is highly compatible with some of its characteristics (here: long distances, low investment capabilities), the chance that the newer technology will strive is much higher than that the older - though usually cheaper - technology will be rolled-out at first. For a communications infrastructure with Internet access this means in emerging countries: no land lines and no desktops, except in the occasional Internet-cafe. Everything is connected via the mobile phone. A web site is visited via the mobile phone. A business is conducted using automated processes leveraging the mobile phone. At least one whole generation of ICT is being leapfrogged.

This has broad implications that I will discuss in further postings. Some of these topics will be:

  • Products: Emerging Markets consumers want simple, robust and cheap devices, but not old and scaled down "stuff"
  • Business Models: New markets require new business models. When a phone call is only initiated to signal the receiver, but not to actually have a chat, then no revenue is generated directly
  • Economy: As entrepreneurs in rural areas have an infrastructure in place to establish businesses, they start a local, formal economy that can self-propell itself

Earth 3.0 will be very connected. Less with cables. More with waves.

Tuesday, January 6, 2009

The Surf is On

The Surf is On

In a recent Business Week article Steve Hamms quotes Navi Radjou from Forrester Research that "these Web 2.0 companies are surfing on the old wave. They're not creating the next one", asking "what's wrong with silicon valley?".
Maybe nothing is wrong and this is exactly the way it is supposed to be.
In her book about technological revolutions Venezuelan scholar Carlota Perez clearly distinguishes between two phases:

  • The installation phase where the main discovery sparks innovation in related technical domains
  • The deployment phase where innovation happens by applying that new technology in many other domains.

Bursting bubbles and clanking crashes in technological as well as financial areas would indicate the transition between phases. As we are now also witnessing the financial bubble bursting - while we were before hoping the Internet bubble would have been the only one out there that "had" to burst - her startling prediction not only for the bad, but also for the good times should be analyzed more closely.
Perez describes the deployment phase we should be in by now as the start of a golden age where people are harvesting the innovation made in technology. By taking e.g. the infrastructure of the Internet, the ease of application programming in Web 2.0, the pervasive communication via mobile devices and the ability to apply algorithms to massive amounts of data (a combination we now call Cloud Computing), we can create innovative solutions for really hard problems that are part of Earth 3.0. The breadth of these solutions one can build are already startling:
  • Create applications can enable people to find again and stay in touch with friends from various decades of their life (Facebook.com, Stayfriends.com, Reunion.com etc.)
  • Automate the processing of loans and and loan collections in a way that even micro-loans become profitable, thus enabling rural villagers to become part of the formal economy
  • Learn a foreign language interactively, but fully automated by reading from and speaking into a mobile phone
If Perez is correct, this is just the very start of deploying the innovation that has been made in the last decades. Obviously, in parallel to this deployment phase, many unrelated research will happen eventually sparking another technological revolution (and corresponding bubbles).
But right now the bursting bubbles created perfect waves that we can surf on. We should enjoy and embrace that opportunity.


Monday, January 5, 2009

Why "Earth 3.0"

Why "Earth 3.0"

The name of the blog was inspired by a new section in "Spektrum der Wissenschaften" (the German edition of Scientific American). This excellent magazine dedicates part of their editorial content to a perspective how we deal with the world in the time of post-industrial revolution.

If Earth 1.0 was the earth as we - human beings - found it, then Earth 2.0 is how we formed it through our activities especially during the ongoing technical revolution. Some of these activities were directed towards positive goals, but many led to unintended consequences, such as global warming. In this deployment phase of technological innovations humanity has much more sophisticated resources to address the problems of Earth 2.0, improve it and invent with much fewer side effects. A focus on sustainable solutions developed in a collaborative way that include people in every corner of the world is what Earth 3.0 is all about.

Therefore, this space will be used to explore ideas triggered by external events, derived from other publications or sparked by thoughtful discussions.