Tuesday, February 02, 2010

How The Information Age Is Changing Our Lives

The New economy or the information age is largely dismissed in the arguments of the mainstream. That's because while the gist of their discussions predominantly centers on what needs to be presumptively "fixed", they appear to be preoccupied with sustaining the status quo.

Needless to say, even if they communicate by email or by mobile phones or use the web as a key source to secure information, they seem to discount on the role these instruments play in shaping our lives or our economy, despite the fact that these gadgets have mostly been ABSENT about two decades ago.

Marketing guru Seth Godin, whose words of wisdom comes in remarkably terse but poignant messages, seem right anew: People resist change because ``These represent safety, because if you don't challenge the status quo, you can't be made fun of, can't fail, can't be laughed at." He calls this the Lizard brain.

Well, safety in the status quo is in reality utter nonsense. That's because life always changes and people through the markets respond to the incentives that the environment provides.

Hence, safety in the status quo represents as sheer absurdity or rabid denial or plain simplemindedness or the lack of observation skills or at worst delusional attachments to ideologically based economic creeds.

And yet the stage of technology adaption determines the chances of winning or losing in terms of career or investments.

This also shows that an enabled technology based revolution translates to a new way of living.

It's not just in terms of business structures (operational platforms, distribution process, organizational capital, new markets etc.), but also in many other human aspects (values, attitudes, fashion etc.).

In terms of economics, we may call this the lengthening of the capital or production structure or the enhancement of capital tools or "inventing machines to make more- and-better machines" as Alvin and Heidi Toffler describes in Revolutionary Wealth. To quote Mr. & Mrs. Toffler anew, ``This same process on a vastly larger scale is now happening to what may be termed "K-tools- the instruments we use to generate knowledge, the most important form of capital in advanced economies."

How substantial is the information age to our global economy?


Some important notes from the International Telecommunications Union (bold highlights mine)

-Between 2008 and 2009, mobile cellular penetration in developing countries surpassed the 50% mark to reach an estimated 56% end 2009

-There are now more than twice as many mobile subscriptions in the developing world than in the developed world (3.2 billion vs. 1.4 billion)

-China 750 million, India 480 million

-26% of world population (1.7 billion people) are using the Internet (64% in developed, 17.5% in developing countries)

- 1 billion Internet users in developing countries, one third of which in China

-Almost 500 million fixed broadband subscribers globally, China overtook US in
2008 as largest market

-Half of the 200 million broadband subscribers in the developing countries are in China

-23.3% broadband penetration in developed countries; 3.5 % penetration in developing countries


Let's add that in the US, according to the Business Insider,

``More kids are getting mobile phones: Last year, more than 35% of U.S. children ages 10-11 had cellphones, almost double the amount in 2005, according to Mediamark data, via eMarketer. And even more than 5% of 6-7-year-olds had cellphones last year."

So the spread of the information technology is clearly diffusing across all the demographic categories.

Well, the above exhibited the infrastructure aspect of the information technology.

Here is the applications or how people have been using the infrastructure...


We'd like to focus on the web, where presently 26% of world population or 1.7 billion are participants or users.

From Marketingcharts.com ``Global consumers increased the amount of time they spent on social networking sites like Facebook and Twitter by 82% in December 2009 compared to December 2008, according to The Nielsen Company.

``In December 2008, global consumers spent an average of three hours, three minutes and 54 seconds on social networking sites. That amount of time increased to five hours, 35 minutes and five seconds one year later. In addition, unique audience increased 27%, from 242 million in December 2008 to 307.4 million in December 2009." (emphasis added)

The Economist has a national breakdown on time spent on these applications....


According to the Economist, ``SOCIAL networks are now a ubiquitous part of daily life in western countries. Facebook, for example, which was launched in 2004, now boasts over 350m users, more than two-thirds of them outside of America. The keenest social-network users, Australians, spent over seven hours a month on such sites, “poking” friends and “twittering” in late 2009, twice as much as users in Japan. Yet making big revenues and profits from such habits remain Facebook’s greatest challenges."

Think of it, for developed nations some 3-6 hours are spent on social networking sites or people are spending some 20-40% of their active time on the web via social networks (assuming 8 hours of sleep). That's how important the web has been transforming our lives.

Well this seems to be the core trend of technological advances....
It's practically Moore's Law at work

Steve Jurvetson neatly explains, ``Moore’s Law is commonly reported as a doubling of transistor density every 18 months. But this is not something the co-founder of Intel, Gordon Moore, has ever said. It is a nice blending of his two predictions; in 1965, he predicted an annual doubling of transistor counts in the most cost effective chip and revised it in 1975 to every 24 months. With a little hand waving, most reports attribute 18 months to Moore’s Law, but there is quite a bit of variability. The popular perception of Moore’s Law is that computer chips are compounding in their complexity at near constant per unit cost. This is one of the many abstractions of Moore’s Law, and it relates to the compounding of transistor density in two dimensions. Others relate to speed (the signals have less distance to travel) and computational power (speed x density).

``Unless you work for a chip company and focus on fab-yield optimization, you do not care about transistor counts. Integrated circuit customers do not buy transistors. Consumers of technology purchase computational speed and data storage density. When recast in these terms, Moore’s Law is no longer a transistor-centric metric, and this abstraction allows for longer-term analysis.

``What Moore observed in the belly of the early IC industry was a derivative metric, a refracted signal, from the bigger trend, the trend that begs various philosophical questions and predicts mind-bending futures"

``Moore’s Law is a primary driver of disruptive innovation, such as the iPod usurping the Sony Walkman franchise , and it drives not only IT and Communications and has become the primary driver in drug discovery and bioinformatics, medical imaging and diagnostics. As Moore’s Law crosses critical thresholds, a formerly lab science of trial and error experimentation becomes a simulation science and the pace of progress accelerates dramatically, creating opportunities for new entrants in new industries."

So yes, free market based technology innovations has indeed been meaningfully transforming our lives.

Ignore this at your own peril.

No comments: