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An environmental perspective of communications.

An Environmental Perspective of Communications

Introduction

The Information Age is upon us. But the understanding and the implications of what that means is somewhat allusive. What has been predicted or forecasted as a "future" is often a little hard to believe; what is upon us in the present is often hard to recognize. So before we acquire the clarity of hindsight, an environmental perspective of communications may enable us to capitalize on what is available to us now to move and manage information, as well as to enhance our planning capabilities for the next few years.

There are four categories to consider that will give us a fairly complete perspective for this purpose: demographics, competition, information and technology. Demographics, by themselves can seem little more than boring statistics, so I will attempt to present them as change indicators, selecting a few of those statistics that reveal significant patterns or directions. Competition in the last two decades of this century can only be considered as a global concept, and will be developed in that perspective here. Information will be defined in its various forms and for its implications. Lastly, the technology which affects all the above will bring us to an appreciation of communications -- which in its broadest sense will be defined here as the movement and manipulation of information.

Demographics

Where people live seems sometimes to be a matter of choice or heritage, but in this country, it is an indication to major corporations and to all of the mid-sized and growing businesses that surround corporate America where the labor pool is. And it is specific to the particular labor pool that will provide the technical abilities, knowledge, skills or lack of them that make one location better suited than another for prosperity. The move to the sunbelts of this country, noted by John Naisbitt in Megatrends, makes sense for those who have spent miserable winters in the northeast or midwest. With the growth of the proportion of senior citizens, where they are -- in Florida and Arizona -- is a market potential for many consumer products concerns. Where there is a lack of skills but an enthusiastic attitude from people who want and need work, there is an attraction of Toyota to Tennessee rather than Detroit. Where the cost per square foot of floor space becomes prohibitively expensive and transportation for employees a hassle, massive portions or entire corporate headquarters begin to relocate from New York City to New Jersey or Connecticut, or large back office operations are moved to Delaware, Nebraska, South Dakota, or the Caribbean. But even in this country, our demographics are affected by individuals from other countries who migrate towards the education and opportunities of capitalist countries. Large companies or market opportunities used to attract people to areas. With the capacity to communicate more effectively, companies are moving to where the conditions and labor pools are favorable. This has implications for planning and opening new plants or departments. They do not have to be co-located with the home office. Distance is no longer the issue it once was.

The location of people is only one aspect; the composition of that labor pool is another consideration. The proportion of professional jobs has risen and will continue to rise slowly through the year 2000. It is estimated by the Bureau of Labor Statistics that there will be 21 million new jobs created from 1986 to 2000. Yet, the Fortune 500 companies shed 2.8 million jobs, one million of which were white collar, from 1980 to 1987. The difference is the rise in small and growth businesses, which is more than making up for that reduction.

The service sector now employs 75 percent of the work force compared to five percent in the early 1900s. Of the 21 million jobs estimated to be created, 17 percent will be professional. Yet, over the next 20 years, the pool of 18 and 19 year olds will drop 25 percent. Creative companies like McDonalds and Kentucky Fried Chicken are finding that the mentally handicapped are reliable, productive workers in jobs that were once reserved for the young and inexperienced. They show up on time and don't get as bored as teenagers doing the same tasks. The present turnover rate among the mentally handicapped who were hired by McDonalds and Kentucky Fried was ten percent compared to the 200 percent experienced normally. The same is true of the senior citizens looking for something interesting to do after retirement. Here are two reliable, productive sources of labor to fill the void of the Baby Bust. Shifts will begin to take place in the traditional notion of the types of people who will fill certain categories of jobs, as well as the categories themselves changing.

Productivity as an issue has loomed over manufacturers as they suddenly found themselves competing against foreign labor pools. U.S. productivity has only been increasing at less than one percent since 1973, where it used to increase over two percent annually in the 1960s. The average over the period from 1950 to 1985 was 2.5 percent. By comparison Japan's productivity was 8.4 percent, Italy and Germany were at 5.5 percent, France at 5.3 percent and Canada and Britain at 3.5 and 3.1 percent respectively. However, with the rise in professional and service sector jobs, productivity is harder to measure. One reason is that the tangibles either do not exist or must be creatively defined. Also the nature of white collar jobs change rapidly in content and process, with no easily translatable formula to measure a constant over time. The productivity of American workers, with the influx of foreign labor and the pressure of foreign competition, becomes a complex issue to digest.

Magnify that and the previous issues with the trends in education. The percentage of foreign students achieving their Ph.D. in the U.S. in 1960 was 12 percent, compared with 20 percent of Ph.D.s awarded in 1987. Our National Institute of Health sponsored 15 U.S. scientists in 1987; however, they also sponsored 40 foreign scientists. And of the 47,000 patents granted in 1960, one sixth were to foreign people--compare that to 45 percent of the 77,000 patents granted in 1986 to foreign patent applicants.

Competition

The issue of global competition has been touched upon in the discussion of demographics. But it has become clear that international business is no longer an issue of import and export or what goes on beyond our shores. True globalization is a merging of countries' economies and peoples in every country (accept for those totalitarian states that have built impermeable walls around themselves). Economies have become globally interdependent. Any individual manufacturing effort of a complex end product probably has foreign influence in its somewhere--in parts or subassemblies, design, labor, raw materials or market destination.

Companies used to be able to call themselves international if they dealt in markets abroad, or had representatives in other countries. The multinationals of today have massive physical locations, many that have now combined the local talent and not just the market, combined with the product and direction of the home office. But a true global company will have to be fluent in organizational design, flexible in product design and delivery to suit many markets, and adaptable to changing economic influences and world conditions.

The world is coalescing into four geographic and cultural areas of interest. The European Community will no longer be 12 (or more) individual countries, with their separate tariffs and regulations. The Far East is slowly merging their interests as China moves toward less socialist and more capitalist enterprises. China is an incredible new market and at the same time a new source of global competitive goods. Joining Japan are Singapore, South Korea, Taiwan, Thailand, Malaysia, the Philippines, Indonesia, Australia, New Zealand and others as players in manufacturing goods, technologies, centers of finance and tourism. With North and South America as the third and the Middle East, India and Africa the fourth areas, what was once over 200 countries will become four major areas and eventually a single world economy -- if the political differences give strength rather than barriers to economic realities, then we can even add in the Communist Block.

Global competition even today is manifesting itself in partnerships--the trend of mergers and acquisitions on a global scale. Some examples are Toyota with GM, Nissan with Ford, AT&T with Telefonica of Spain in the AT&T Microelectronica de Espania joint venture to manufacture advanced semiconductors and custom chips, and Goldstar of South Korea, whose objective is to create alliances with American companies to access U.S. technologies--to name just a few. Even the Olympics show how more and more countries are joining every year to gain exposure and take their place on the world stage. Competition will no longer be a matter of figuring out how to sell the most of your own product to gain market share as it will be: Where is there a need (market) and how can my company fulfill it? What can we make, who will help make it and distribute it, and who will sell it?

Information and Technology

With this view of the world, let's consider what information has become. From the basics of speech and visual reference, information has expanded by the variation in the media that represents it. Sound--whether it is speech, music or other things such as radio frequencies from outer space captured for scientific research, animals or undersea phenomena -- is recorded and preserved on was, plastic, magnetic tape, compact disc, or digitally in a computer. Visually, we capture images on film, preserved on photographic paper, slide for projection, or again, magnetic tape or digitally in a computer. Those sounds and images can then be moved or transmitted over distances by copper wire, radio, microwave, fiber optic strands, or satellite. This collection of technologies has enabled information to take on new meaning. It has prompted John Reed, as Chairman of Citibank, to say that information about money is as important--if not more important--than money itself. The information managed in American Airlines SABRE reservation system is more profitable than selling airline tickets.

The manner in which the computer industry and the telecommunications industry together influence the way all businesses are conducted gives magnitude to the attention-given information and information technologies by every profit or non-profit concern. It touches our personal lives every day. Either one in isolation would not have the power of the two in combination.

How do we meet the challenges of the Information Age? By the recognition that whatever can be imagined can indeed be achieved, and that whatever it is that you are doing today will probably not stay that way long. Change is the watchword of the Information Age. Prepare for it.

References

[1.] Anderson, Martin. Revolution. Harcourt Brace Jovanovich, 1988.

[2.] Birch, David. Job Creation In America: How Our Smallest Companies Put the Most People to Work. The Free Press, 1987.

[3.] Business Week, April 20, 1987 and March 28, 1988.

[4.] Buzzell, Robert D., ed. Marketing in an Electronic Age. Harvard Business School Press, 1985.

[5.] Fortune, March 28, 1988 and may 23, 1988.

[6.] Gilbreath, Robert D. Forward Thinking: The Pragmatist's Guide to Today's Business Trends. McGraw Hill, 1987.

[7.] Naisbitt, John. Megatrends: Ten New Directions Transforming Our Lives. Warner Books, 1982.

[8.] New York Times, December 5, 1987.

[9.] Ohmae, Kenichi. The Mind of the Strategist: The Art of Japanese Business. McGraw Hill, 1982.

[10.] Peters, Tom. Thriving On Chaos: A Handbook for a Management Revolution. Alfred A. Knopf, 1987.

[11.] Porter, Michael. Competitive Advantage. Harvard Business School Press, 1984.

[12.] Toffler, Alvin. Previews and Premises. William Morrow & Company, 1986.

[13.] Toffler, Alvin. The Third Wave. William Morrow & Company, 1980.

[14.] Waterman, Jr., Robert H. The Renewal Factor: How the Best Get and Keep the Competitive Edge. Bantam Books, 1987.

Sharon Werner is Staff Supervisor, Sales Strategy and Development at AT&T.
COPYRIGHT 1989 St. John's University, College of Business Administration
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Author:Werner, Sharon
Publication:Review of Business
Date:Sep 22, 1989
Words:1997
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