ACTA UNIVERSITATIS LODZIENSIS FOLIA OECONOM ICA 157, 2002
A ndrzej Straszak*
THE COMING DIGITIZATION OF RESEARCH,
PRODUCTION, COMMERCE A N D BANK ING SECTORS.
M ANAGEM ENT, SYSTEM 'S A N D TECHNOLOGICAL
CONSIDERATIONS
h is now clear that the Polish Research, Production and commerce Sectors are in greater trouble than was generally realized when the current Polish economical, political and social transition started in 1989. The catastrophic situation o f the Polish Research and Industry are due to many reasons, local, regional, national and supranational as global ones.
Nevertheless, the Polish industrial is still at the point o f no return - no return to old agriculture style o f the so-called agriculture society as well as - no return to till “very modern" agriculture style o f the so-called super-industrial society.
The ideas fo r the paper came out o f series o f research projects o f Systems Research Institute o f the Polish Academy o f Sciences. SRI projects on modeling and analyzing economy in transition, new economy, new management and new technology started since 1989. One o f projects was directly committed with the concept o f reengineering o f the Polish Economy started as early as 1994. [25, 261
T he New G reat T ransition
A long-term perspective on m ankind’s econom ic and social past, present and future includes three great transitions. The first was the agricultural revolution transition that occurred som e ten thousand years ago and essentially created civic culture. Man ceased to be a w andering nom ad and created C om m unities tied to a particular area of land. The agricultural revolution transition took eight thousand years to spread around the world. [19]
* SRI Warsaw
The second great transition began two hundred years ago and was based on Energy and Industrial Revolution and after one hundred years also M anagerial Revolution. Tw o hundred years was too short to spread the second great transition around the world. Even in some European countries like Poland the second transition was not com pleted yet.
The third great transition began, in 1989, when Tim B urners-Lee invented the W orld
W ide W eb technology. He put forward a “global hypertext project” to allow people to share their work around the world. W ork could be now widespread over the globe instantly. Today about ten percent o f hum an population use already this first literally and technologically global system . By 2010 or so the W W W technology could be reachable for about info-com fifty percent o f global human population. The W W W is the first but not least global technology, how ever we could consider now that Internet Revolution occurred at the last m oment of the 20lh century and that 21" century belongs fully to New Third Great Transition. It is true for all sectors of econom y and society, including of course Education, Research, Industry C om m erce and Banking areas. The second Internet Solution - socalled semantic Internet will be avaible before 2010.
A Few Rules for Any Sector o f Econom y within Intenet Society
The collapse of the old Econom ies, societies and technologies results that new global situation is turning the world econom y upside down. T he econom y for the Internet Society is a digital economy. In the old econom y, inform ation flow was physical: cash, checks, invoices, bills of landing, reports, face to face m eeting, analog telephone calls or radio and television transm issions, blueprints, m aps, photographs, musical scores, and direct mail advertisem ent.! 1, 4, 5, 6, 7, 8, 10, 11, 12, 13, 16, 18, 20, 21. 22, 25, 26, 27, 29. 32, 33]
In the new econom y for the Internet Society, inform ation in all forms becomes digital.
The new economy is also know ledge and research econom y based on the application o f human know ledge and research results to everything we produce and how we produce it. In the new econom y, m ore and more o f the econ om y’s added value will be produced by know ledge w orkers, researchers and m anager’s brain. M any agricultural industrial, services and jobs are already know ledge workers and in Am erican economy nine of ten new jo b s are in inform ation intensive sectors o f the econom y.
In the new economy, adding ideas to products and services and turning new ideas into new products services is w hat the future is all about. W hether people
as consum ers or producers, adding ideas will be central to wealth creation in the new econom y. The Internet Society is based on the N etw orked Intelligence, silicon m icroprocessors and roads of glass fiber are enabling hum ans across the hall, across the region and across the planet to apply their know -how , know ledge and wisdom to every aspect o f production and econom ic life. This is an age o f netw orking not only o f technology but hum ans, organizations and societies, creating world wide web of hum an and artificial intelligence.
In the digital econom y, com petition d oesn’t com e from com petitors only - it com es from everyw here; and collaboration doesn’t com e from aliens only - it could com e from com petitors too. The new enterprise is a netw ork o f distributed team s based on the application o f C4ť technology - com m and, control, com m unications, com puting/inform ation, intelligence and intellect technologies. [19] A few overlapping rules are em erging that differentiate the new (digital) econom y from the old. [27]
Rule I : Knowledge, research an d education
> The new (digital) econom y is a Knowledge, R&D and Education - intensive economy.
Inform ation, intelligence and intellect technology (Г’Т) enables an econom y based on knowledge, intellect and wisdom. T he new era o f sm art and intelligence products including machines, robots, houses, factories and so on will revolutionize every aspect of econom y and society.
Rule 2: Digitization
> The 21SI century econom y is a digital economy
In the new econom y, inform ation, intelligence and intellect are in digital form: huge flows of bits. W hen inform ation, intelligence and intellect becom e digitized and com m unicated through digital networks as well as stored in bits, a new world of possibilities unfolds. New digital appliances can be created very soon that fit in your pocket and can have access to w orld wide vast inform ation and know ledge bases wide. To day USA digital econom y are using 55 peta bit/s flows o f digital information.
Kule 3: Virtualization / m olecularization
In the new (digital) economy, there are a lot o f virtual matters: > Virtual corporation
> Virtual agency r- Virtual market > Virtual university > Virtual teams and so on
The new (digital) economy is a m olecular as well as virtual econom y. The large corporation is being disaggregated, replaced by m olecules and others entities that form the dynam ic basis of econom ic activity.
Rule 4: System s integration / internetw orking
> The new (digital) economy is a netw orking econom y, system s integrating m olecules into new clusters that network with others for the creation of wealth.
The C V technology networks enable small com panies to overcom e the main advantages o f big com panies — econom ies o f scale and access to resources. The Internetw orked Enterprise will be a far-reaching extension o f the virtual corporation and dot.com because there will be access to external business relationships and a dramatic increase in outsourcing. The Internetw orked Enterprise will behave like Internet, where everyone can participate and based on system s synergy, where the total effort is greater than the sum o f the parts. N etw orks o f networks along the Internet model are beginning to break down walls am ong com panies - suppliers, custom ers and com petitors. Every econom y needs a national C4I3 infrastructure. The new Internet infrastructure will change econom ic activity as thousand folds or more, as did electrification.
Rule 5: D isinterm ediation / convergence
The new national C 4Ił infrastructure will change dram atically the role of m iddleman functions in new (digital) econom y, partly elim inating them, partly offering them a new role.
The C4l ' technology it is a convergence technology itself and will stim ulate other convergence trends in new (digital) econom y. C onvergence is becom ing the basis o f all sectors of new (digital) economy.
The Coming Digitization of Research. Production. Commerce and Banking Sectors. 31
Rule 6: Prosumption / im m ediacy
In the new (digital) econom y m ass production is replaced by mass custom ization, producers must create specific products that reflect the requirem ents and tastes of individual consum ers. In the new digital econom y, consum ers becom e involved in the actual production process from very begining. The new (digital) enterprise is a real time instant enterprise, which is continuously and im mediately adjusting to changing business conditions through inform ation immediacy. The recent RAND concept o f “velocity m anagem ent” will contribute to the new (digital) economy.
Rule 7: Globalization
In the new (digital) econom y is a global econom y from the very, very beginning. C ontrary to popular wisdom, com panies from the fringes of the world econom y can become global players. W hat they need is organizational confidence, a clear strategy, a passion for learning and the leadership to bring these factors together.
Is there a New Econom y? Will the New Econom y survive both the collapse of New Econom y stocks and the cyclical dow nturn? Is a New Econom y, a new (digital) econom y described above?
A New Econom y it was a name for 1995-2000 dot-com com panies subeconom y. In the past two years N ASDA Q prices o f the dot-com com panies have fallen with astonishing speed, wiping out m ore than h alf of the previous five years gaining. N ever has so much wealth created or destroyed so fast. However, financial m arkets are not a reliable indicator o f the econom ic benefits o f great technological revolution. M any econom ists continue to believe, that im provem ents in inform ation technology have already increased the efficiency and productivity o f the U.S. econom y, with additional benefits to com e as both old and new com panies adapt their operation to m ake the most o f the new technologies. [31]
The Rules for Research and Industry sectors o f the new (digital) econom y
The speed with which the Internet transform ed non-agriculture research, production, com m erce and banking business during the last decade, the first of the tw enty-first century, we may see an equally dram atic transform ation, or more, driven not www In te rn e t, but by Sem antic Internet.
M oreover the new phases o f total digitization revolution are com ing. Let us consider a few top trends in technology and business on 2002 from the research, production, com m erce sectors point o f considerations.
Trend num ber one: Distributed com puting redefines com puters networks, underpinning innovation, com pany form ation and investm ent. In 2002 distributed com puting will become one of the sure things. Signs o f this are already evident, with venture capitalists investm ents. D istributed com puting is going to change the way we think about technology and the Internet itself. On a practical level it will have far-reaching effects on how software is written and on how com puter and networking gear is installed in business. The potential of distributed com puting is huge, think about a scenario where there is unlim ited com puting pow er available to you, any place, any time. Right now the Internet is site- or destination-centric; you go to a site to get inform ation, but in a distributed com puting it is a model that fades dram atically, because instead of going to a specific destination, users can have a peer-to-peer contact that gathers desired inform ation from multiple sources.
One o f the biggest changes brought about by distributed com puting will be a reconsideration o f traditional network topologies and com puting architectures. As the network infrastructure get broken down into sm aller, application - specific parts. Software will become intelligent and tailored to specific task. This will allow com panies, users to buy only the functionality they need.
M ost import, though, distributed com puting will help us realize m uch o f the Internet’s potential, transform ing it from a docum ent-based netw ork of Web pages and e-mail into a dynam ic, granular network where specific (for exam ple research) com ponents of inform ation can be located and shared efficiently. Finally, the network really is the huge com puter with tim e-sharing data processing.
Trend num ber two: The rise o f ECNs (Electronic C om m unications Netw orks) will push traditional exchanges to consolidate into a single electronic network (Public electronic markets). ECNs now carry 34 percent o f N A S D A Q ’s share volum e, with Instinet carry 40 percent o f ECN market share. European electronic equity market place is currently very fast growing. EC N s m arket places could be easy reachable for farmers.
Trend num ber three: W ireless new technology - Bluetooth nears, creating significant opportunities. M anagers and inform ation as well as know ledge workers could use the short-range wireless protocol with the flashy nam e for m onitoring control and com m unication. A ccording to Allied Business Intelligence, 2,2 million devices with 8 0 2 .1 1, a wireless protocol developed by the Institute o f Electrical and Electronic Engineers will ship this year. 802.1 I
transm its data about 100 times as far and 15 times as fast as Bluetooth. The speed and range of 8 0 2 .1 1 m ake it useful for laptops on large farm s; the power and cost saving of Bluetooth make it better for m obile phones and handheld com puters. The technologies may prove to be com plem entary. A llied Business Intelligence, for instance, predicts m anufacturers will ship 1.4 billion Bluetooth devices - and only 20.2 million 802.11 devices - in 2005. The to-day Bluetooth device can transm it data up to 30 m eters at 720 kbps.
Trend num ber four: C om m unications caries shift from voice and data transm ission to new high-bandw idth services. M any high-bandw idth services will be offered by carries in m ajor m etropolitan areas begging this year, but not for rural areas. C reating interactive applications by broadband services are also very prom ising for rural areas in long-term. Telecom m unications com panies will begin to offer new services that will stim ulate dem and for bandw idth. At first, these services will include interactive video-chat and videoconferencing for exam ple - as well as interactive TV services, distance-learning and m ovies-on- dem and. Later, these offerings might include e-com m erce services from local on-line yellow pages, or the ability to rent softw are from application service providers (APSs).
From the above we could learn the new phases of digitization revolution are behind the door and will enter city as well as rural areas as well.
System s Integrated O rganized intelligent T echnology for Tw enty First C entury , Research, Production and Com m erce Sector o f Internet (ww w 8 sem antic) Society
The interrelation between people’s values, desires, lifestyles, institutions, econom y, environm ent and technology have been crucial in the I9 lh and 20lh centuries. In the 21s' century “the wired world and the netw orked global society” as a whole, along with the set of networks of interrelated regions will be based on system s integrated organized intelligent technology (SIOT). T he concept of the system s integrated organized technology was developed at IIASA by Dobrov, M cM anus and Straszak (1979). The SIO T is a three-dim ensional construct, which includes hardware, software and orgw are dim ensions, or - technology hardware, technology intelligence and technology organizational ability dim ensions. SIOT m eans technology integrated with users' intelligence. R esearch, Production and C om m erce developm ent in the 21s1 century will need technology integrated into the agricultural developm ent process, see Fig. 1.
Fig. 1 Systems Integrated Organized Intelligent Technology and Internet (www, semantic) Revolution.
During the 1984 SRI/IIASA w orkshop [24] the role o f new technology for developm ent was form ulated as follows: ’’New technology (highly autom ated, science intensive) will no doubt be one of the im portant issues which should be considered during the analysis of the strategic policy for any region within 30-40 years perspective. Any future technology will intensively use autom ated system s or artificial intelligence and shall be heavily supported by hum an intelligence, therefore it is strategically wise for any region to create or to expand the regional innovation centers and possess own research and developm ent strategic policy. Integrated hum an- and artificial-intelligence-intensive technology will play more
im portant role in the near future for drastic im provem ent o f regional m anagem ent."
The grand strategy for the m ajority of Polish regions and regional research, industry and agriculture over the next 20 years should be based upon the intensive use of new technologies in the areas such as telecom m unications, com puters, high and very high speed intelligent transport, and new agglom eration technologies (the widely netw orked agglom eration construct).
The intensive use o f new technologies should be supported by the lifelong education process. Does the future world o f grow ing international interdependence and approaching new technology frontiers dem and o f all countries and regions within countries to behave so as to carry out their international responsibilities? It must nam ely be born in mind not only the national econom ic developm ent features, but also the regional and national developm ent pitfalls could produce substantial increase not ju st m erely in the national, but also international instability.
If com petitiveness becom es the key future regional and regional research, production and com m erce developm ent issue within the national, as well as international, perspectives, then all the intra-country regions will need their own grand strategy for at least 20 years ahead. It is not a role for the know ledge sectors to try to design such grand strategies for any given region, but rather to consider several cases and to prepare methodological guidelines based on generalization o f international experience.
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