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Technology, Societyand
The Next Transformation
Jonathan MurrayWW Technology Officer, Public
SectorMicrosoft
Magna to lose Magna to lose production of BMW production of BMW
SUVSUVCBC News, May 16CBC News, May 16thth 2007 2007““Magna International Inc. confirmed Magna International Inc. confirmed
Wednesday that it will lose Wednesday that it will lose production of the BMW X3 mid-size production of the BMW X3 mid-size sport utility vehicle in three years.”sport utility vehicle in three years.”
[BMW] CEO Norbert Reithofer said the [BMW] CEO Norbert Reithofer said the shift in production to the United States shift in production to the United States
was part of a strategy to reduce the was part of a strategy to reduce the risks associated with a falling U.S. risks associated with a falling U.S.
dollar against the euro.dollar against the euro.
Information Technology: Information Technology: Transforming Business Transforming Business StrategyStrategy
ManualProductio
n
Automated
Production
ProcessIntegratio
n
ServiceAbstracti
on
Kn
ow
led
ge C
on
ten
t
Labor/Marginal Cost
ComputableServices
Kn
ow
led
ge
Ba
se
d S
erv
ice
s
Increasing Increasing computational powercomputational power and and networked infrastructuresnetworked infrastructures are are enabling a dramatic enabling a dramatic transformationtransformation
in business modelsin business models
……
And we’re only at the beginning!And we’re only at the beginning!
Challenges and Challenges and OpportunitiesOpportunities
Sources and location of value Sources and location of value creation:creation:
Manufacturing Manufacturing Services Services
Local Local Regional Regional Global Global
Changing business models and Changing business models and competitive landscapescompetitive landscapes
Accelerating demand for high Accelerating demand for high level skillslevel skills
Balancing positive and negative Balancing positive and negative social impact and policy issuessocial impact and policy issues
The future of information Technology
Prediction HorizonsPrediction Horizons
3-5 Years3-5 Years: : Highly predictableHighly predictable
Products already in developmentProducts already in development
5-10 Years5-10 Years: : Relatively PredictableRelatively Predictable
Basic technologies identifiedBasic technologies identified
10-15 Years10-15 Years: : Non-predictableNon-predictable
New basic technologies will disruptNew basic technologies will disrupt
Trends are the only guideTrends are the only guide
Moore’s LawMoore’s Law
Transistor density Transistor density doubles every 18-24 doubles every 18-24 MonthsMonths
Computational power Computational power doubles at this ratedoubles at this rate
Or, for Or, for constantconstant computational computational capacitycapacity
Chip size halvesChip size halves
Power requirements Power requirements halvehalve
Prices halvePrices halve
Courtesy of Intel Corporation
10 Years = 7 Doublings = 27 = 128 Times today’s capacity
Riding the wave…Riding the wave…
The TransformativeThe TransformativePower of TechnologyPower of Technology
Technologies enable the capture, distribution and repeatable application of value creating knowledge
Connection Generates economies of scale
The ability to create
network effects
Abstraction Enables generalists to replace specialists
The ability to hide complexity
EncodingConverts
Tacit & Implicit into Explicit Knowledge
The ability to formalize
knowledge
A 10 Year View:A 10 Year View:An An Algorithmic* Algorithmic* TransformationTransformation
Encoding
Abstraction
ConnectionAlways connected,
Auto-adapting Service Networks
Human-like interaction and
Simulated Realities
Model BasedKnowledge and
Decision Processes
UnlimitedComputation
UnlimitedStorage
UnlimitedBandwidth
*Prof. John Zysman, BRIE – UC. Berkeley
““Any sufficiently advanced Any sufficiently advanced technology is indistinguishable technology is indistinguishable
from magic.from magic.””
Arthur C. ClarkArthur C. Clark"Profiles of The Future", 1961 "Profiles of The Future", 1961
(Clarke's third law)(Clarke's third law)
The Politics of The Politics of MagicMagic
Will Will social acceptance social acceptance issues limit our ability issues limit our ability to tap technology’s to tap technology’s full potential full potential ??
How will concepts of How will concepts of liabilityliability and personal and personal responsibilityresponsibility evolve? evolve?
What about What about privacyprivacy, , securitysecurity , , identityidentity: Will : Will consumers continue to trade consumers continue to trade privacy privacy for a for a free free lunch lunch ??
What What skillsskills will be required to be fully will be required to be fully economically economically productive productive ??
Can the Can the developing worlddeveloping world catch up or does catch up or does technology merely technology merely amplifyamplify the developed the developed world’s existing world’s existing advantagesadvantages??
Can Can policypolicy makersmakers and and regulatorsregulators keep up? keep up?
Implications: Implications: Business StrategyBusiness Strategy
If it can be automated, it will be If it can be automated, it will be automatedautomated
Labor cost may no longer drive Labor cost may no longer drive manufacturing locationmanufacturing location
Access to talent will increasingly Access to talent will increasingly be the primary driver of value be the primary driver of value creationcreation
Talent will demand new Talent will demand new organizational structures and organizational structures and governance modelsgovernance models
““The illiterate of the 21The illiterate of the 21stst century will not be those who century will not be those who
cannot read and write, but those cannot read and write, but those who cannot learn, unlearn, and who cannot learn, unlearn, and
relearnrelearn””Alvin TofflerAlvin Toffler
Implications: Implications: SkillsSkills
Much of today’s knowledge work will Much of today’s knowledge work will be automated be automated
Knowledge workers will need to up-Knowledge workers will need to up-skill to remain economically relevantskill to remain economically relevant
Countries/Regions will need to Countries/Regions will need to transform to attract the mobile, transform to attract the mobile, global talentglobal talent
Education systems will need to Education systems will need to transform in order to produce transform in order to produce economically viable talenteconomically viable talent
Implications: Implications: EducationEducationNeed to focus on developing higher level Need to focus on developing higher level abstract thinking skillsabstract thinking skills
Learning as a personal responsibility: Learning as a personal responsibility: Learning how to learnLearning how to learn
Abstract thinking: Abstract thinking: Higher level math, Higher level math, music, second languagesmusic, second languages
Information Discrimination: Information Discrimination: Good from Bad, Good from Bad, Truth from FictionTruth from Fiction
Teamwork : Teamwork : Working in ad-hoc groupsWorking in ad-hoc groups
Communications:Communications: Presentations skills, Presentations skills, performance artsperformance arts
Deep implications for the classroomDeep implications for the classroomTeachers:Teachers: Evolving from gatekeepers of Evolving from gatekeepers of knowledge to learning coachesknowledge to learning coaches
Students:Students: Using tools as an enabler of Using tools as an enabler of learninglearning
National Innovation National Innovation Strategy: Strategy: Quality of life Quality of life matters matters The The algorithmicalgorithmic transformation will transformation will
place increasing dependence on access place increasing dependence on access to to talenttalent
This talent is This talent is globally mobile globally mobile and will and will place a premium on place a premium on quality of life quality of life issuesissues
Focus on creating an “Focus on creating an “Intellectual Intellectual PlaygroundPlayground””
Opportunities for cross-disciplinary Opportunities for cross-disciplinary interactioninteraction
Opportunities to “birth” ideasOpportunities to “birth” ideas
Participative decision makingParticipative decision making
World class arts programsWorld class arts programs
International schoolsInternational schools
……
SummarySummaryMassive increases in networked Massive increases in networked computational power will enable an computational power will enable an ““AlgorithmicAlgorithmic” transformation” transformation
These new computational tools will These new computational tools will have have major implications major implications for society, for society, business models and skillsbusiness models and skills
Access to creative, conceptual, Access to creative, conceptual, abstract thinking talent will drive abstract thinking talent will drive national national economic advantage economic advantage andand global competitivenessglobal competitiveness
National economic development National economic development strategies need to focus on strategies need to focus on developingdeveloping, , retainingretaining, , attractingattracting and and enablingenabling this this globally mobileglobally mobile talent talent