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Business 2001.

Wondering how your job may change in the next decade, compliments of information technology? Here's a glimpse into your future.

Technology is a very abstract word. I define it as science put to work. The Nobel Prize-winning economist Robert Solow credits technology advances with creating more than half of the productivity advances in the U.S. in the last half century.

But where is technology heading? What kind of world are we creating?

Many people wonder if the information technology industry is mature. Growth has slowed in recent years. We've become such a large portion of capital spending--38 percent of producers' durable equipment in the U.S.--and our growth rates are much more closely tied to capital spending, give or take a percentage point or two.

Despite that, I believe technology will see more change in the decade ahead than in the previous 30 years. People have talked about the Information Age for a long time. In the 1990s, it will arrive.

LIKE LAMPS INTO AN OUTLET

At Hewlett-Packard, we see three important technological trends, all occurring simultaneously, which makes the effect that much more powerful:

* Technology performance is accelerating. The best example is compute power. Reduced instruction set computing, or RISC, combined with improved device technology, allows us to provide 50 to 75 percent more performance for a dollar's worth of computer every year. Other improvements are in the capacity of fiber optic fibers and the density of storage technology.

So far, the information industry hasn't done a great job of producing the software applications for people to take advantage of the better hardware technology, but that problem should be solved by the end of the decade with computer-aided software engineering tools, reusable software objects, new user interfaces and expert systems.

* An "information utility" will be developed. This is being driven by the movement of telecommunications to digital technology and the convergence of data communications, telecommunications and broadcasting.

The information utility will be a public infrastructure as widespread as electricity, an intelligent network of networks stacked with services, such as intelligent directories, the Library of Congress online, the expertise of the world's best doctors. You name it.

Of course, we'll need standards for interfacing with and operating this information utility, and those standards must be worldwide.

Advances in wireless technology will extend this utility to the mobile professional, giving him or her information anytime, anywhere. That's why the allocation of transmission frequencies is such a hot issue these days.

* People will use an information appliance, which will plug into the information utility as easily as a lamp into an outlet. Information appliances will come in a variety of forms, so many in fact that we're not trying to predict their shape. But they'll all share these characteristics: First, instead of being general-purpose devices, they'll be geared to a specific task. One of our handheld computers is a good example. It doesn't do everything, but for financial analysts who want to use Lotus 1-2-3 on the run, for instance, it's perfect. Second, the appliance will adapt to the user, be easily programmed by him or her to interact in whatever style, language and discipline the user chooses. Finally, it'll be intuitive; users can plug into the information utility and get to work without ever reading a manual. The appliance will quickly become indispensable.

ONLY THE LIMITS OF YOUR IMAGINATION

How will these technology changes change our lives?

For the individual, technology will remove the tedious aspects of work. For example, an engineer won't spend time taking measurements. The measurement process will be automated, and engineers will focus on the results of those measurements. Knowledge workers won't spend their time looking for information. They'll have their software agents search the world's data bases at night to gather information. When they arrive in the office the next morning, they'll be able to act on that information immediately.

Of course, to take advantage of the new technology, employees will have to acquire--and constantly refresh--the skills required for such creative, high value-added jobs.

For companies, this same new technology lets them easily span the boundaries of time, distance and organizational structure for "virtual proximity." The Internet that now links the world's technical community is an early example of this.

So you can have geographically distributed teams, with hardware engineering done in one location, software in another, and production, procurement and marketing in still others. People in remote nations will be able to participate in worldwide projects to add value locally without uprooting themselves and their families.

Information technology also can make the organization chart irrelevant. Peer-to-peer networking means you don't have to go up one chain of command and down through another to communicate with someone. At Hewlett-Packard, our electronic mail makes it easy to bypass all kinds of organizational barriers. It's the electronic equivalent to the open-door policy and it's central to Hewlett-Packard's culture.

But the real goal of information technology for businesses is faster response times. To bring new products to market quickly and to satisfy changing customer needs, you have to work on many pieces of a complex project in parallel. Information technology makes that possible. It creates competitive advantage in a dynamic global marketplace.

Indeed, information technology is integrating the world economy in ways few would have imagined not so long ago. Walter Wriston described it best years ago as "a thousand terminals around the world operating 24 hours a day ... leaving us nowhere to hide." Even then, he correctly described the impact of information technology on financial traders' ability to move capital around the world--and their willingness to do so the minute a nation makes any fiscal or monetary decision that affects returns on capital.

Capital flows now dwarf merchandise flows, perhaps by as much as 50 times greater. This aspect of the Information Age has turned classic trade theory upside down. A nation's merchandise trade balance no longer reflects the attractiveness of its goods and services. Instead, it reflects the effect of exchange rates on the cost and demand for those products. For example, in the 1980s, the U.S. raised interest rates to finance its budget deficit, and the resulting strong dollar made U.S. products uncompetitive in terms of price. And American imports soared to all-time highs. Meanwhile, other national governments pursued the opposite strategy: They kept their currencies too low by any measure, and they enjoyed a healthy trade surplus with just about everyone.

The Information Age has so integrated us that there is, indeed, nowhere to hide. Each nation's fiscal and monetary decisions affect capital costs and exchange rates. Those changes reverberate throughout the system, affecting the flow of goods and services and the lives of the people around the world who provide them.

There's no Adam Smith invisible hand out there that will make all these flows balance out. If merchandise trade were only bilateral, imbalances could correct themselves rather quickly: You stopped buying my wool, so I can no longer buy your wine. But in today's very complex, multinational trading environment, such correction happens very slowly. The effects of imbalances often last longer than a firm can withstand.

And the human costs can be tremendous. As one senior economist put it: "Unfortunately, the economists' time lag can turn into a politician's nightmare." But when the pain is real, people get vocal and governments must respond. We must balance competition with cooperation. The world has become irrevocably linked, and there's no going back.

In October, Mr. Young retired as president and CEO of Hewlett-Packard.
COPYRIGHT 1992 Financial Executives International
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Information Management; information technology's impact on the business world
Author:Young, John A.
Publication:Financial Executive
Date:Nov 1, 1992
Words:1252
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