21st Century Business

The greatest test for human society as it confronts the 21st century is how to use the power of technology to meet the demands thrown in by the power of population.

The world is preparing for a high tech multi-revolution with changes in science, technology, commerce and industry. Several predictions about 21st century business firms and managers can be made based on current thinking and assuming no major events or unforeseen situations. Five important trends are expected to influence 21st century business firms.

1. The process of automation will continue especially in the area of office automation. This will result in improved productivity.
2. Computers will become cheaper and more powerful.
3. The personal incomes tend to get higher and so does the demand for goods and services.
4. Except for temporary reversals caused by protectionism, the current trend towards globalization of trade and business will continue.
5. The population growth will decline and will result in a large segment of older people with different needs, income, and aspirations.

If these trends continue, majority of factories and offices will be automated. Information will be centralized and available at any location and for any authorized person. Growth will come mostly in the service sector and products will be cheaper. Although it is not possible to predict the exact time or extent of coming changes, one thing is certain, the twenty-first century will bring with it the need for specialized skills which we as future managers must prepare ourselves for.

1. New trends emerge when the established trends are altered by major innovations, and revolutions.
2. The population all over the world increase to such an extent that this would put pressure on the existing resources.
3. Three developments permitted the British to escape the fate Malthus predicted for them – migration, agricultural revolution and industrialization.
4. The world has moved from agriculture to trading and small business. Industrial revolution brought with it technology and large scale production.
5. Today, the world is preparing for a high tech multi-revolution with changes in Science, technology, commerce and industry. The emphasis now is on knowledge and the world believes that knowledge is everything.

The Prize that lies in foreseeing the future:

In the information age past orthodoxies can be a liability and the premium is on identifying emerging trends.

Although we are all fed up with being reminded of the fact, it is nonetheless true that we are moving inexorably from the machine age to the information age. The closer we get to the information age, the more questionable become the traditional practices and precepts of management,. With the machine age came a technocratic view of management. From Frederick Winslow Taylor’s scientific management to the disciplines of operations research to the current fad for business re-engineering, managers have been themselves as engineers more than artisans. A manager’s job was to reduce the imponderable to the calculable.

In the machine age, control was everything. Managers were allergic to surprises. The results of that obsession were painfully detailed reporting systems, endless review meetings, and brusque phone calls when budget variances were spotted a temptation to second guess operating managers, and a seemingly unquenchable thirst on the part of HQ for more data.

In the machine age, people were ancillary, things were central. In the information age, things are ancillary, knowledge is central. For more and more companies the ratio of market value to book value is a multiple of three, five ten or more. A company’s value derives not from things but from knowledge, know-how. Intellectual assets, competencies – all embodied in people and none of it is on the balance sheet.

Even when it is well understood, the future takes time to assemble. Interactive television, video telephony, home banking, electronic publishing, intelligent vehicle and highway systems as concepts, all these have been around for decades. And in each case it may well be another decade before they become part of the fabric of our life. But any company that has not been working assiduously for years to build the needed competencies, understand the exact needs; and assemble the required partnerships is unlikely to have a share of the spoils when these opportunities blossom into mega-markets. Getting to the future first is more like a marathon than a sprint. You cannot enter at mile 25 and hope to win.

In the out of bounds world of the information economy the past does not have to be an anchor: industry does not have to be destiny; borders do not have to be boundaries; employment does not have to be servitude; and loyalty does not have to be acquiescence. The language, tools, roles and responsibilities of management in this new world are only now being invented. Our experience and our answers, rest in the machine age. Our future and our questions lie in the information age.