Fifth In A Series
     Here we continue our exclusive wider view of the world we operate in and what that means to air cargo.
    In case you missed the first installment of the series—just click here. For the second installment, just click here. For the third installment just click here. For the fourth installment click here.
    Gordon Feller, who’s been watching and worrying about Asian cargo in particular and industry developments in general for more than 25 years, has created this MegaTrends series exclusively for Air Cargo News FlyingTypers.
    Gordon did his formal academic training at Columbia University in New York City, where he was a Wallach Fellow and a Lehman Fellow, and completed graduate work in international affairs.
    But as he likes to say—his real-world training has come from the "school of hard knocks. "
    Gordon Feller has written analysis and commentary for the FT of London, Reuters, Thomson, Informa, Journal of Commerce, McGraw Hill—and many others.
    We welcome your comments and suggestions.
Geoffrey

IT Tech Innovates Future

     Technology developments in the past few decades have significantly transformed the way people live and communicate, and the way businesses operate across the globe.
     Of the 6.5 billion people in the world, about one half have mobile phones and almost a quarter have internet access. Arguably, the pace of change continues to accelerate.
     The ubiquity of the internet and mobile communications, the massive available processing power, and the almost unlimited bandwidth and data storage are creating applications and opportunities that were unthinkable 5 or 10 years ago. The cost of devices has tumbled with advances in silicon technology, and their usability has risen significantly with advances in miniaturization.
     Portable communication and information devices have become a convenient and affordable day-to-day reality for millions. Information is now available to almost anyone, anywhere at anytime — and, as Web 2.0 becomes ever more common, almost everybody can contribute.
     Digitalization and technology go far beyond the consumer.
     Businesses have adopted digital technologies to improve their productivity, to develop new products and services and, in some cases, to create new business models that have transformed major industries (e.g., Google’s search technology revolutionized online advertising and had a huge knock-on effect on old media). Technology also drives convergence across industries: the computing, entertainment and telecommunications industries have converged with the launch of the Apple iPhone, and healthcare and energy (among others) find common ground in nanotechnology.
     Business knows that technology will drive profitability (in fact, 68% of global executives in a McKinsey study believed a faster pace of technological innovation would have a positive or very positive impact on profitability) — their question is how best to realize this gain. Realizing cost efficiencies — through a reduction in labor and effort, an increase in automation, and computerized inventory control, for example — is one of the early-adopted and obvious gains, but there are far more sophisticated trends playing out.
     One of these is analytics – a new wave of sophisticated computing and mathematical techniques and tools being embraced by mainstream business.
     Seen by some as the new frontier in decision science, it is attracting large business and intellectual investments (including software vendors, university research and business books). Analytics has proven a powerful tool for many companies: Capital One, the U.S. credit card company, pioneered its use, running hundreds of experiments every day to understand the effects on their customers of, for instance, changes to interest rates or minimum balances; using this data the company claims to have ultimately driven down the cost of acquiring new customers for their savings business by 83% and increased customer retention by 87%.
     Many industry sectors (e.g., financial services, health care and airlines) and fields (e.g., risk management, price optimization and financial analysis) have widely adopted the use of analytics. Despite considerable progress in the past few years, analytics is still a nascent category with a promising future.
     The trend is fuelled by the increasing digitalization of information, ever faster and cheaper computing, the explosion of online networks and data collection, the use of new tools for analyzing unstructured data (e.g., text, audio, video), and new approaches (e.g., neural networks, artificial intelligence).
A global platform
     New technologies have also created a global collaboration platform that eliminates barriers of geography, distance and time. Companies are embracing new organizational models and are becoming globally distributed by selectively choosing the location of their corporate functions (e.g., headquarters, R&D, production, call centers) based on almost any criteria but proximate physical locality.
     Technology has been a formidable driver of growth for preferred offshoring locations such as India and Eastern European countries.
     Emerging countries have also played a more prominent role in the development and diffusion of new technologies as their businesses and consumers pass by older technology: there are more mobile phones in India than landlines and moves to bring cheap computers to Africa have focused primarily on wireless and laptop technology, bypassing PCs entirely.
     Most experts believe we are only at the early stage of the digital technology revolution.
     As technology gets more open-sourced, and emerging countries contribute to innovation to a greater extent, the scale of innovation will increase.
     The impacts and uses of software as a service are only just beginning to be understood.
     Cloud computing and virtualization — broadly, technologies enabling users to obtain their computer resources (processing, storage, software) virtually, and pay only for what they use — are likely to transform the IT industry.
     They will allow organizations to substantially reduce the amount of physical devices that are needed for computing functions.
     In turn, this will advance the green IT agenda, reduce the need for packaged software and allow start-ups (and others) to right-size their server capacity almost instantly without great infrastructure investment, facilitating the success of many innovative new ideas and businesses.
     In response to this new computing model, risk management and data security are also likely to evolve as organizations try to limit their data vulnerability.
     The astonishing pace and increasingly global nature of change creates opportunities, but also risks for technology players.
     The route to market may be easier for new entrants in an era of impressive and often cheap technology, but with so many players, it takes something truly innovative and sustainable to win.
Gordon Feller