Wednesday, November 9, 2011

For this week, I wanted to further examine a portion of the McKinsey article "Going from Global Trends to Corporate Strategy". Taking from an example that is often talked about in our class, trends in technology are very evident around the globe in all working sectors. It is clear that this specific trend is probably the most visible today. Technology is changing the way the global community does business on a day-to-day basis and in ways we never dreamed of mere years ago.

Another article (more of a transcript from a conversation) sheds light on the subject and gives a more concrete version of what is really going on in the world and how this specific trend is likely to continue to impact human society from now on. Ray Kurzweil is a well-known author, businessman, and inventor who has a thesis that predicts unprecedented (and frankly, unimaginable) technological innovations that will change the world in the future. He sat down with McKinsey Quarterly for a conversation and the transcript gives some enlightening ideas on how the technology trend might further alter business.

His first, and probably most important part, of his thesis is that technological innovation is growing exponentially and not in a linear fashion as most would think. Mere decades ago, students at world renowned universities were sharing computers that took up entire buildings. Nowadays, a cell phone has a thousand times more power and is far-and-away cheaper. Kurzweil predicts that the same level of innovation spread out over the same amount of time in the next 25 years will revolutionize business and society. Non-biological intelligence, genome projects, and energy revolutions only scratch the surface of what life will be like in just a short time.

What does this all mean for industry? Kurzweil first states that intellectual property will be a huge issue down the road. Ensuring that the technologies that certain companies create stay protected for the future is certainly important. Also, diversifying investments has to be a strategy that many companies with stakes in energy or technology have to be thinking about. For instance, many oil companies have taken the lead in attempting to develop renewable energy. This is because the progress being made, according to Kurzweil, is impossible to ignore from a financial standpoint.

Kurzweil's main gripe with industry is their inability to see just how important innovation can be for the growth (or downfall) of a company. For example, just five years ago, many people were not using social networks or blogs even though the basic framework was there. However, as these social facets began to grow, those who did not jump on the bandwagon were left in the dust. It is a lesson for those who want to stay on top or ahead of the curve. Executives and leaders need to learn how to recognize trends that can represent coming change. Both McKinsey articles clearly demonstrate this need and articulate it brillantly.

Sources:

"IT growth and global change: A conversation with Ray Kurzweil", McKinsey Quarterly, (January, 2011), https://www.mckinseyquarterly.com/PDFDownload.aspx?ar=2728

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