The Information Economy: What is it?

1. The Information Economy: What is it? Patrick Callioni National Office for the Information Economy Sydney 24 October 2001

2. Nothing new under the sun…. • “The old tendencies of human nature, suspicion, jealousy, particularism, and belligerency, were incompatible with the monstrous destructive power of the new appliances the inhuman logic of science had produced. The equilibrium could be restored only by civilisation destroying itself down to a level at which modern apparatus could no longer be produced, or by human nature adapting itself in its institutions to the new conditions.” (H.G. Wells, The World Set free)

3. Today’s World • Computers outnumber people • Smart devices and appliances proliferate • General motors produces more computing power than IBM • Old economy vs new economy

4. ICT - driving growth and industry transformation Sector1990 2000 $b % $b % ASX market capitalisation 140 671 Manufacturing 51 36 131 19 Resources 53 38 95 14 Finance/insurance 22 16 246 37 Other services (media, telco) 14 10 199 30

5. Australia • Australia faces many of the challenges confronting advanced economies around the world • But we have the added disadvantage of distance from many large markets • We have only about 19 million people, but the third largest ICT market in the asian region, behind Japan and China • A great user of technology, but not a major producer

6. Drivers of Change • Acceleration - ever faster change • Interconnectedness - no one is an island • Digitisation - remember “The Matrix”? • Consumerism- tomorrow’s consumers will not be like today’s consumers • Value chain redesign - the rules will keep changing

7. More innovation “Ultra real-time” New intermediaries Moore’s law Not only “faster”, but “smaller and cheaper” The ability to do things not done before - or even thought before Acceleration

8. The extended enterprise New work scenario The web is just part of the internet The internet is just the beginning Next generation hula hoops Exposing the enterprise to customers and business partners And vice-versa Interconnectedness

9. Digitisation • The world is moving from analog to digital • The world is moving from computers to embedded devices • As computers become invisible, so does the interface • We will directly interface with digitised objects… • Can you cope with a talking fridge? Will it cope with you?

10. Consumerism - changing expectations • Trust • Customers want to manage by exception • Customers will resist doing the mundane work • They will ultimately deal with the organisation that is easiest to deal with • Mass customisation increases • Target market of one - the consumer of tomorrow

11. What are you best at? Who can you align with for best of breed? Collaboration to build a better value chain The stock market favours specialisation - for the time being Aggregators and resellers breaking down the model Value chain redesign End Customer Distribution Selling Marketing ProductDevelopment R&D

12. Ubiquitous bandwidth Smart environments Knowledge management Higher performance computing Biotechnology Nanotechnology Net-centric computing Tagging Digital money & micropayments Privacy, security and information survivability Human-computer connection Tomorrow’s world

13. Anytime, anywhere Always on The wireless/wired capability Remote operations, virtual employees Network based organisations The “open source” phenonomen But... around 60% of the world has no phone access Ubiquitous computing

14. Smart environments • Homes, offices and everyday objects will become networked and intelligent • Smart means conditional responses, within context • TAN and bluetooth • Smart ink, smart paper • Digital tattoos • Expanding requirement for bandwidth

15. Knowledge management - it is not a fad • Corporate knowledge will become a tangible asset • Community of interest knowledge will follow, and quickly • Dispersed workforce will operate in a knowledge management environment • Expert networks

16. Higher performance computing • High performance computers will model reality and allow us to question them - remember hal and 2001? • Mine massive data - and prosper from it • Simulate complex business processes • Understand the results - data visualisation and “new realities”

17. Net-centric computing • The internet (or its successor) permeates all systems, spawning new products, applications and services • Imarkets • Netsourcing • Optimised devices • Agents • The end of fixed prices

18. Digital money and micropayments • Programmable currency will reshape how we buy and sell • Customised cash • Micropayments • Televend • “A la carte” products, services and information • Consumer reluctance

19. Tagging • 80% of online purchases will be made with reference to meta-information by 2003 (Gartner) • The web provides a vehicle for the vox pop • What happens when their opinion is as available as your marketing (and more credible)?

20. Biotechnology • We will be in the biotech age by the end of the decade • Biology is the fastest growing area of human knowledge • Fundamental change to society • Not just limited to human beings

21. Communicate naturally and effortlessly Manipulate objects directly The computer will become invisible, so will the interface The advent of appliances Communicate using all your senses See me, feel me, touch me… Generational differences Human-computer connection

22. Nanotechnology is building things one atom or molecule at a time Self-assembling consumer goods Computers billions of times faster Medical nano... virtual end to illness, aging, and perhaps, death Molecular food syntheses... end of famine and starvation Nanotechnology

23. Privacy • Secret secrets • Fail-safe business processes • Privacy is the casualty of the information age • A matter of trust • Consumer backlash • How do you protect an appliance?

24. So what, you say • Tomorrow’s world will not be like today’s • Tomorrow’s customers will not be like today’s customers • There will still be money…and the need for it • Do you see a lot of blacksmiths around? • No one can predict the future • We should learn from the past • Be ready for change

25. Preparing for change: what does NOIE do? • The Information Economy: creating an environment for confident, innovative and productive use of IT, of information and of knowledge. • The Information Industries: promoting investment and innovation in IT and in information management. • Government Online: “walking the talk” and increasing the network effect.

26. patrick.callioni@noie.gov.auwww.noie.gov.au