Strategy+Business, Jan 2011
How to prepare for the Connected Generation’s transformation of the consumer and business landscape.
We call them Generation C — connected, communicating, content-centric, computerized, community-oriented, always clicking. As a rule, they were born after 1990 and lived their adolescent years after 2000. This is the first generation that has never known any reality other than that defined and enabled by the Internet, mobile devices, and social networking. They have owned various handheld devices all their lives, so they are intimately familiar with them and use them for as much as six hours a day.
As populations in Western countries age, powerful new consumer segments will be created, including a relatively wealthy retirement segment and a rising young middle class. The pace of innovation will accelerate, creating an ever more digital world, even as wireless devices become the dominant tool for trade, entrepreneurship, and Internet access. Indeed, the very rise of Generation C will help create a virtuous circle that will help stimulate economic growth, which in turn will encourage both the public and private sectors to continue to invest in faster and more widespread communications infrastructure, thus enabling even greater growth.
The trends outlined above will have a wide range of effects on how members of Generation C — and, by extension, other generations as well — use communications technology, how they access and consume information and entertainment, and how they interact. These effects will be determined in part by the progress of technologies over the course of the next decade.
On the grid 24/7. Being connected around the clock will be the norm in 2020 — indeed, it will be a prerequisite for participation in society. The Internet’s power will develop not just through its online economic might, but also offline, as a result of its cultural and political influence. Social animal 2.0. Thanks to the popularity and performance of social collaboration technologies and mechanisms, including social networks, voice channels, online groups, blogs, and other electronic messaging systems, the size and diversity of networks of personal relationships will continue to grow. These networks will include acquaintances ranging far beyond the traditional groups of family, friends, and work colleagues to include friends of friends, online acquaintances, and anonymous members of interest groups. Already, 49 percent of 16- to 24-year-olds in Europe are savvy users of social networks.
The digitization of everything will have an equally profound effect on how businesses operate, and on how work gets done. Among the changes that will be wrought by the arrival of Generation C in the workplace will be the continuing consumerization of corporate IT. More than half of the CIOs in a recent Booz & Company survey said that in the next three to five years, most employees will bring their personal computers to work rather than using corporate resources. The trend of redefining employees as resident consumers will be led by Generation C, given its familiarity with technology and its expectation of always-on communications.
This trend will, in turn, encourage the increasing virtualization of the organization. As 24/7 connectivity, social networking, and increased demands for personal freedom further penetrate the walls of the corporation, corporate life will continue to move away from traditional hierarchical structures. Instead, workers, mixing business and personal matters over the course of the day, will self-organize into agile communities of interest. By 2020, more than half of all employees at large corporations will work in virtual project groups. These virtual communities will make it easier for non-Western knowledge workers to join global teams, and to migrate to the developed world. As they do, they will bring with them the innovative ideas and working behavior developed in their home territories.
Moreover, the proliferation and increasing sophistication of communication, interaction, and collaboration technologies and tools, and the economics of travel itself, will result in knowledge workers’ traveling much less frequently. The opportunity to meet face-to-face will be accorded primarily to top management, and business travel will become a valued luxury.
This increasing technological sophistication will promote the emergence of skilled and innovative digital entrepreneurs in massive numbers throughout the developing world. The rise of these entrepreneurs has the potential to significantly disrupt traditional Western business models. And they will have the attention of a large, newly connected audience that can benefit from their new ideas
As Generation C enters the workforce over the next decade, the manner in which it consumes information, communicates at work and play, and uses technology will transform many major industries. The most affected sector will be telecommunications, which is at the very center of how this new generation will live their lives; other sectors apt to greatly change include healthcare, retail, and travel. How will these industries evolve over the next decade?
Telecommunications: We see three primary new revenue opportunities arising from the changes that the emergence of Generation C will bring about. First, the demand for ubiquitous connectivity will ultimately create the need for universal broadband access in developed economies. As a result, operators that hope to grow by offering services dependent on broadband must support national efforts to build out this next-generation infrastructure. Second, vast segments of the world’s population in emerging markets are still unconnected, and operators looking to grow their customer bases thus need to expand in those markets. Third, the ways that Generation C behaves and collaborates, and the technologies it prefers, will create opportunities in other industries; telecommunications operators should be considering how to promote the use of their services to capture some of the new value created.
Healthcare. As information about doctors and hospitals, medical treatments, and costs floods the Internet, consumers will gain real power, performing their own research; writing reviews of physicians, hospitals, and drugs; and forcing the players to compete more actively. Online services, some featuring user-generated content, will become a primary channel for medical advice, substituting in part for traditional support channels.
Widespread connectivity will boost electronic diagnosis, helping to reduce costs; digital health monitoring will become accepted practice; medical R&D will come to rely on social media such as crowdsourcing. The personalization of medicine will lead to new insurance models, and electronic medical records and national e-health infrastructures will connect with online identity and digital passport technologies.
Retail. Ubiquitous connectivity will continue to transform the retail industry, seamlessly integrating the online and offline worlds, and ultimately leading to a form of augmented reality that allows a more elaborate presentation of retail goods. Peer reviews will become a real-time decision-making tool in physical stores as well as online, and social networks will become critical for brand awareness and customer preferences.
Travel. By 2020, business travel will decline in the face of costs and alternative meeting technologies. In the leisure segment, traditional intermediaries such as travel agents have already been largely cut out, and peer reviews have become a dominant form of deciding on vacation destinations. This will lead to increasingly individualized travel, online advice and information dictating travel plans in real time.
For managers, it is no longer sufficient to plan for the next few quarters, or even the next few years. Companies that aren’t willing to determine their strategies for the longer term — 10 to 15 years out — are putting their business models and value chains at risk. Executives must begin now to develop an agenda that includes an analysis of the capabilities and workforces they will need in the next decade and beyond. A critical step will be to make sure that the organization as a whole understands the coming changes, and that there are already people within the organization who are living these changes now, who don’t perceive them as a threat, and who can help integrate them into the organization’s business plan.
Information You Can Use. Knowledge You Can Trust
This summary is taken from Business Leaders Digest monthly
The objective of BLD is to offer strategic insights, how-to articles, thought leadership pieces and other information to help you become more effective at the workplace.
Summaries from global top 100 business & management magazines, newspapers, websites & reports are published monthly in Business Leaders Digest which can be subscribed at a modest annual subscription of Rs1500 for corporates and Rs.900 for individuals in India or US$50 overseas. To subscribe or receive a sample issue, email at busleadersdigest@gmail.com
No comments:
Post a Comment