Winners and Losers in the IT Revolution
July 21 2003
A study sponsored by a US center for mid-and long-term strategic thinking has predicted that the US will continue to lead the IT revolution, while Europe's prioritisation of the protection of existing business will hold it back. The study also looks at the relative strength of Asian economies in IT and the way in which IT may transform the world in the next 20 years.
RAND's National Defense Research Institute concluded that continued American leadership in IT will result from three main factors:
- US businesses are focused on innovation
- Americans readily accept change, and
- the US government provides an environment hospitable to IT business development.
'The United States presses ahead with change even when it means 'creative destruction' of companies that drive its economy today in order to build a stronger economy tomorrow', said Richard O. Hundley, lead author of the study.
Looking at IT around the world, the report finds:
- Asia already dominates IT manufacturing, accounting for 70 to 80 percent of total world output of a wide range of important IT materials, components, and products. China is rapidly emerging as a major IT player in Asia and the world, and may leapfrog Japan whose current economic stagnation could cause it to gradually fall behind nations in the IT vanguard.
- Europe is attempting to steer the information revolution to limit the amount of creative destruction of existing businesses, promote the economic convergence of European nations, and yield positive social outcomes. It is therefore lagging behind the US and is expected to continue to do so, notwithstanding its recent lead in wireless telephony
- Most Latin American nations are 'also-rans' in the information revolution. This is likely to continue in the future
- In the Middle East and North Africa, only a few nations -- principally Bahrain, Qatar, Kuwait, and the United Arab Emirates - are likely to exploit fully opportunities offered by the information revolution. Most of the other nations in this region will lag behind. Israel's IT future is now 'held hostage to the outcome of Arab-Israeli conflict'
- most of sub-Saharan Africa 'will continue to fall further behind much of the rest of the world over the next several decades'.
Given its provenance, the report naturally looks at security implications, concluding among other things that 'Extreme losers in the information revolution could become 'failed states'...[that are] breeding grounds for terrorists'.The report says that recent crashes and redundancies in the IT sector are only temporary setbacks, and forecasts that the IT revolution will continue to 'dramatically transform the world economy and alter social and political life'. Further ahead, 'the information revolution could over time change the role of the nation state'. As IT-enabled economic activity moves increasingly beyond national control, a diffusion of governance may occur, from the nation state to a variety of intergovernmental and non-governmental organisations and transnational corporations. This will affect smaller nations sooner than larger nations.
Exponential growth in computing power will continue at least through 2015, when silicon technology is likely to reach its foreseeable limits. At that point, other materials technologies (for example, nanotechnology) are likely to take over.
What cannot be predicted, say the researchers, is when and where the next 'killer application' will emerge to drive information technology into new spheres of usefulness. Past examples of such so-called 'killer apps' are: the Netscape browser in 1994, which set in motion exponential growth in usage on the World Wide Web; or the VisaCalc spreadsheet in 1976, which was the primary impetus for the sales of the early PCs. These are the 'wild cards that will determine the fine details of the information revolution', the report concludes.
RAND's National Defense Research Institute
www.rand.org/nsrd/ndri.html is a federally funded research and development center supported by the Office of the Secretary of Defense, the Joint Staff, the unified commands, and the defense agencies. The US' National Intelligence Council sponsored this particular RAND study.
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
