Using Internet to drive SL economy
The Internet is accepted today as the key driving
force for large, small, integrated and isolated nations, industrial sectors
or any economic segment. The proliferation of labels such as e-commerce,
e-business and e-services, attests to the increasing importance of the
Internet as it offers a wealth of opportunities, yet more exciting developments
on the way. Often it is the thinking in leadership or policy makers that
holds back, as they may not be open to conceptualise the real power that
can be realised via the Internet.
As an example, the Automobile Association in the US is enthusiastically
considering using the Internet to provide a more proactive service to its
members. Engine management information could be relayed across the net
from a moving vehicle to a control centre where it is analysed. Diagnostic
software could identify any fault and an engineer could be dispatched to
meet the driver, before any breakdown has occurred. Already, telemedicine
makes use of network technology to provide access to consultant skills
at remote locations. Even some surgical operations can be carried out in
this way. Home shopping, home banking, even e-commerce appears tame alongside
such innovation. Many organisations have already embraced the Internet
and used it to derive competitive advantages.
For Amazon Books (www.amazon.co.uk)
and Dell Computers (www.dell.com) the
Internet is not hype or science fiction. It is an everyday tool essential
to the way they conduct business.
They and their customers take its functionality for granted. However,
its reach is bigger than that. The Internet is having a fundamental effect
on the macro-economic environment in the global economy.
Repercussions
These achievements are well and good, but this renaissance has powerful
repercussions for the economy. The e-economy never sleeps. The metaphorical
store is open 24-hours-a-day and opened not only for the locals. National
economic boundaries have been eroded for employment as well as trade. The
global collaboration facilitated by the Internet means that companies could
choose to locate cost and production centres where it is most beneficial
and yet managed centrally.
Low-skill jobs will migrate to cheaper labour pools. Communication networks
will form the glue to hold these dispersed organisations together.
For the first time, democracy will no longer be an idealistic word,
it will function lively at every level of application of the Internet,
raising challenges to those who find it difficult to adopt.
Choices
Innovative and imaginative forward thinkers are deploying the Internet
and associated technologies to out-manoeuvre some of the most successful
corporations of the 21st century. Those closest to the Internet are predicting
hockey stick growths in recovering investments in a matter of 2-3 years,
encouraging the introduction of Internet-based telecommunication infrastructure
to the most remote but emerging economies. The agility of the Internet
helps to reach new targets of individual and company-wide productivity,
redefine industry benchmarks for efficiency, forge better relationships
with their suppliers and attain greater levels of customer services. Hence,
the e-economy is a growing force in the world, the impact of which will
affect us all. The Internet is more than just a way of doing business,
it has become the way ahead even for the critics. If the surveys, market
statistics doesn't convince businesses, hopefully the above evidence of
applications will. As a nation faced with selecting a strategy to cope
with this impending tidal wave of change, there are really only three choices:
1. Do nothing and hope it will go away.
2. Wait and see what happens and respond to external pressures at a
bygone era.
3. Plan to benefit from the change within and benefit from the economic
transformation embracing the e-economy immediately.
For those seeking rapid growth in quantum leaps in this severely competitive
global marketplace, the third would be the only viable choice. More and
more transactions are taking place on-line. Respected analysts are already
forecasting that the value of the e-economy early in the next century will
rival the gross domestic product of western countries let alone those of
the Third World. As for the slow growth or no growth nations, getting out
of the spiral is to grow out of it through new wealth creating strategies.
A powerful force
One should rephrase John F. Kennedy's famous quote on these lines - 'ask
not what the Internet can do for you but ask what you need the Internet
to do for you'. The question is do we have plans for e-learning, e-business,
e-governance, e-health, e-electioneering, e-sports, EDI for regulatory
authorisations and coordination, e-lancing (freelancing), e-entertainment
or for e-anything or are we waiting till the tide pressurises us to take
the first steps as we traditionally have done? The Internet can do anything
better, faster and extremely cost effectively, if only the concept could
be conceived and then demand for such a 'power'. Those paralysed to imagine
and conceive will obviously find it extremely difficult to see the light
that shines through the Internet. E-learning has the godly power to change
poverty and poor health conditions of many in underdeveloped countries
situated at gruelling locations, difficult to access by roads or other
traditional means. E-commerce could assist the poor farmer to sell forward
his yield to a global market without having to rely on government subsidies.
It is only a question of whether we can conceive such an enormous power
to make an economic transformation beyond traditional paradigms and applications.
Hence, there is no other substitute other than to think, imagine and conceive
new development models, a new world order and a new economy so that the
Internet could deliver the unimaginable.
Computers, Internet and biotechnology are the driving forces behind
the New Economy: they are fuelled only by knowledge to realise wisdom.
Inexpensiveness and global availability of the communications technology
has made it possible to exchange and trade in information and ideas on
a larger scale. The New Economy is for those who need speed to pick up
and grow rapidly to catch up or gain a lead with the rest of the world.
It is most realistic for those who lack legacy economies or are riding
at the bottom of economic scales with basic economic wheels, as the transformation
could be rapid and require only a few steps forward. Accessing the Internet
entails insignificant investment on the infrastructure compared to brick
and mortar to build concrete bridges, ports or roads and yet not be able
to reach the masses the Internet could reach. Furthermore, unlike the economic/social
division most brick and mortar infrastructures create, the Internet infrastructure
invites all scales of entrepreneurs to participate for economic development
employing every drop of resource in the nation, grasped through its connectivity
to the entire globe to rapidly realise true wealth. More and more people
today are turning their backs on well-trodden paths through this transformation
from the industrial to the knowledge society. Sociologists claim that the
Internet has made it possible to de-territorialise people, work, regions
and even countries. As far as our immediate society is concerned, the effect
can go as far as cast, creed, religion, race, and even deeper. Hence, this
transformation is much more needed to us in social terms than in economic
terms to become truly independent by overcoming many an obstacle, confidently
building on the true capital of the 21st century: creativity and people.
The e-economy spawned by the Internet is clearly a force to be imagined
and realised very strategically before we 'miss the economic bus' once
again, as compared to many emerging new economies across the globe.
Progress
Networks, specifically the Internet, are becoming the basis of economic
activity and progress. This is not like how railroads, roads, the power
grid and the telephone supported the vertically integrated corporation.
The Internet is transforming businesses in how they procure, how they sell,
how they get paid, what they sell and even transforming the supportive
services.
Business models
Instead of thinking of New Economy companies as Internet companies or dot
coms, think about them as companies that use the Internet infrastructure
to create effective business-web-based business models. In this sense,
the New Economy can include steel companies, garment manufacturers, freight
forwarders, banks and insurance companies, tea, rubber and commodity exporters,
gas distribution companies, and cement manufacturers just as the old economy
can include high-technology firms. But they will differ in how they deliver
and service clientele through the Internet. The most powerful impact can
be observed from entrepreneurs with a worthy product or service that can
be offered to the global market at large.
Sources of value
In today's economy value is created by brain, not brawn, and most labour
is knowledge work. Knowledge infuses itself throughout products and services.
Measuring knowledge-based assets suggest wealth contained in such assets
can outstrip wealth contained in physical assets and even bank accounts
which local accounting bodies will need to take serious consideration as
a true reflection of the new economy.
Ownership of wealth
Business tycoons owned the most wealth in industrial economies and the
balance trickled down to layers of their loyalists leaving a large poverty
base across the entire globe. Today, 60% of Americans own stock and the
biggest shareholders are labour pension funds. Most economic growth comes
from small companies, entrepreneurial everywhere. The ones who delayed
or failed to participate in the global wealth transfer were due to physical
constraints in entering those markets. Today, the Internet has brought
the globe closer to each and everyone who seeks to participate in the New
Economy.
Educational models and institutions
As lifelong learning becomes the norm, services of private companies, not
public institutions are proliferating to meet the growing demands. The
model of pedagogy is also changing with the growth of interactive, self-paced,
student-focused learning. Colleges are becoming nodes on communication
networks, not just places where people go to study. The possibility for
a medical student to learn of the arts and to explore the space simultaneously
is all a click away through the concept of e-learning, an unimaginable
task a few years ago. Moreover, possibilities to offer instant education
to prevent life threatening diseases to people living in remote corners
of the world instantly, at a fraction of a cost against doing them physically
is possible due to the Internet.
Governance
Industrial-age bureaucracies rose simultaneously with vertically integrated
corporations and mimicked its structure. Today, it is very difficult to
distinguish whether a private company is private as they often operate
like public corporations. Moreover, they confuse the clientele when they
preach customer focus and deliver totally opposite services as a result
of internally focused processes designed to cater within the vertical silos.
New Net-driven governance structures, such as the Knowledge Network of
Los Angeles, enable Internet-based cooperation between public and private
organisations to deliver services for citizens. Many countries are expecting
to see similar changes at the core of the democratic process in voting
and thereafter to build relationships between citizens and the state. These
countries and organisations that chose to embrace the Net to offer better
products and services to the customer/public, firstly made a pledge to
consciously improve its services to serve the customers/public before the
Internet gave them a simple, effective medium to develop on their commitment.
First steps
If it seems daunting, it is worth remembering that the extraordinary and
completely unplanned transformative process underway today began with the
simplest of acts: connecting just two networks. In the absence of an abundance
of highly valuable natural resources such as petroleum and precious metals
to naturally attract wealth from other wealthy nations, the only alternative
we have today is to activate clusters of economic modules spread across
the nation by linking them to the rest of the world. Let new economies
be borne either for a farmer to purchase forward, a producer to reach a
wider market or service niche markets from one extreme corner to the other
across the globe. This process will most likely eliminate middlemen in
the traditional economies who monopolies the traditional market routes
and generate a whole new economic cycle where producers could reach out
directly to the consumers or the value adders wherever they may be in the
globe. The first step to take advantage from this rewarding and challenging
economic model is to link each economic cluster to the Internet and echo
commitment in principle to the nation at large. Secondly, it is for the
government not to interfere in the economic boom and allow wealth to be
harvested without obstructing the process with shortsighted tax structures.
If necessary, a process could be maintained to record the products and
services generated through the Internet so that the economic boom could
be monitored. Let there be wealth that flows to our land produced from
our indigenous resources with absolutely no obstacle. This will also entice
the government too to embrace e-governance as a step to wed with the new
economy and participate in its creation. It is not policies that need to
be drafted but persuasion of entrepreneurs to develop new strategies over
the Internet. Impact of this initiative will naturally promote production
of quality products and services even for the local market diminishing
demand for cheap substitutes entering the local market.
Downward spiral
Today the local broom made out of high quality coconut bi-products is already
losing its presence even in the local market against imported designer
brooms made out of synthetic materials destroying local industries as well
as our environment and health. This situation can be turned upside down
purely by offering a quality indigenous broom to a wider global market
and the impact to the economy would be threefold: increased dollar earnings,
prevention of rupee transfers and priceless saving of damage to the environment.
In spite of the real wealth this economic model brings to the country,
this model will be a possible threat to those who are accustomed to capitalising
on cheap labour by exploiting them in menial work or exporting them to
the Middle East. The existence of such institutionalised sustenance of
poverty would be threatened in the presence of the proposed economic model.
The coconut grower no longer will have to sell his property for new factories
or housing projects or send his children to the local garment factory for
menial labour rates scattering their self respect but increase productivity
of his plantation to meet the increased global demands. Professional services
at large will be compelled to offer quality services in return for increased
revenue as there would be new wealth earned through a decent product or
service as against the Mahaweli economic boom in Sri Lanka that was limited
to a few. This is the only way to turn the downward spiral upside down
in the shortest possible time period. The new challenge would not be whether
we could compete on cheap labour internationally but whether we could produce
the demand that the world market needs.
A nation committed to develop is one willing to embrace the bridge (Internet)
that links us to the entire globe from within itself. Therefore, the key
question is not whether to deploy Internet technology – nations have no
choice if they want to stay competitive – but that leadership deploys it.
The writer Anura K.T. de Silva is an IT specialist with over 15 years
of extensive expertise in Information Technology and Communication. He
is a former executive director, IT, BOI and currently the CEO of iOnosphere
Lanka (Pvt) Ltd.
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