The New Machine Age

I recently participated in a panel discussion at an MIT CIO Symposium and had the pleasure of hearing Andrew McAfee talk about the book he co-authored with Erik Brynjolfsson titled Race against the Machine. Mr. McAfee has talked at length about the digital revolution and its impact on the workforce. He talked about the dawn of a new machine age, where the focus is on idea production versus physical production, and knowledge work versus manual labor. He focused on the most impactful period in human history – the advent of the steam engine that ushered in the first industrial revolution. A lengthy period that followed the first machine age was transformative and disruptive. We are on the verge of something that history may someday view as more transformative and disruptive. A quote from Mr. McAfee summed up his thoughts:

Digital will make a mockery of everything that came before it”.

Andrew McAfee isn’t the only one talking about a transformative future. Prior to that MIT session, Geoffrey Moore published a Report on middle class job creation in the digital era, which takes a look at several of the transformative issues of our day. To keep the drum beat going, Mckinsey looked into the future to quantify the potential economic impact of disruptive technology by the year 2025. This fascinating report on Disruptive Technologies was just released. They followed that with an update of a 2010 Report focused on the top ten IT-enabled business trends. Thinking about the rapid pace of change envisioned in all of this content, and allowing ourselves to see the world of 2025 can be overwhelming – and maybe that’s why so many leaders choose to ignore it. But isn’t vision part of the leaders job? Are the quarterly numbers as far out as most executives dare to look? Vision has never been more important – and it is vision that will define success or failure for companies between now and 2025.

If leaders take the time to understand the confluence of forces that are attacking everything we’ve known about business and society, it’s not hard to conclude that massive change is coming. Yet, people still think I’m nuts. Are good leaders so caught up in the day to day grind to look up and see what’s coming? Are people so attached to the status quo that they chose to ignore what they intellectually see coming? Are top executives passing this off as just another cycle? Are current leaders ill equipped to lead their companies through this likely unprecedented transformative period? I think it’s a combination of all of these things.

Take a look at the Mckinsey report and marvel at the possibilities. They selected 12 technologies from a list of 100 based on the broadness of its application; the speed at which it advances, and its potential to create massive economic impact that disrupts or dramatically changes the status quo. At the top of their list is the mobile internet, with an economic impact that could range between $4 and $11 trillion a year and bring an estimated 3 billion more people into to the digital economy. Other top technology areas are: The Automation of knowledge work, the Internet of Things, Cloud technologies and Advanced Robotics.

The report estimates that the cumulative economic impact of its 12 disruptive technologies has a potential range between $14 and $33 trillion per year. Here is a summary of the technology areas and their potential economic impact:

Potential Economic Impact

A very interesting point to note is that the report does not distinguish Big Data as a distinct technologies category, believing instead that it is ubiquitous across most, if not all of the leading digital disruptors. To my earlier concerns about vision, the report serves as a warning: “If business and government leaders wait until these technologies are exerting their full influence on the economy, it will be too late to capture the benefits or react to the consequences”.

The two charts that follow (click on the images to enlarge them) summarize the application areas of each technology identified in the Mckinsey reports. In the next several weeks, I will take a closer look at each of these thought leadership pieces (Job Creation – Geoffrey Moore, Disruptive Technologies – Mckinsey, New Machine Age – Andrew McAfee) and map their impact on the emerging Digital Enterprise. In the meantime, I highly recommend each of these pieces as a way to gain clearer vision.

Here is a summary of the application areas driven by the top 12 Disruptive Technologies identified by Mckinsey.

Disruptive Technologies

Here is a summary of the application areas driven by the Top ten IT Enabled Business Trends identified by Mckinsey.

IT Enabled Trends

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