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The Second Industrial Revolution

Now that we have a good idea of what the era of personalization will look like for individuals, what about for businesses and organizations?

Throughout the second half of the 20th century, the automobile accounted for 10–11% of the GDP, counting original sales, servicing, maintenance, repair, and collateral industries; information technology now accounts for 40% of the GDP. [Source: 2025: Scenarios of US and Global Society Reshaped by Science and Technology, Joseph F. Coates, John B. Mahaffie, and Andy Hines (Oakhill Press, 1996).]

Here, too, the grounds for economic advancement and growth are determined by the drive to meet the demands of individuals. A furniture manufacturer will still be able to manufacture a thousand cabinets and then inventory, distribute, and sell them. But the sales process will likely change to focus on an online catalog with global distribution. Consumers will browse the catalog at home or at work, select the items they like and, more importantly, the customized features that particularly interest them. An order will be received at the "just-in-time" manufacturing facility, built to order, and shipped to the customer in a few days. The impetus for this point of view is the simple fact that as the Internet is global, so will be the marketplace of the future. This means that almost all economic competition will be global, eroding the advantage that regionally based companies enjoyed in terms of where and how they market. Ten years ago, if the Acme Furniture Company resided in North Carolina, its major competition was typically from other furniture companies in the North Carolina area. Today, market differentiation is much harder to create and maintain because every furniture manufacturer is showing at the same bazaar. The only way to create any market segmentation is to sell very specific products to a very select market.

For example, our furniture company must learn to specialize not only in cabinets, but also in contemporary, rustic, and Art Deco cabinets. It must offer a variety within each group—narrow drawer, wide drawer, wood or lacquer finishes. It must offer a variety of color and styles to capture the attention of a specific user looking for a particular color and style. This also means that the manufacturer must now maintain the capacity not only to collect all this information from the prospective buyer, but also to produce a wide variety of products and ship them in a short turnaround time.

Automation is seen as the key to keeping manufacturing output high while decreasing the actual number of workers involved. Coates, Mahaffie, and Hines estimate that by the year 2010, manufacturing will account for 18% of the GDP and employ only 4.1% of the workforce. (Source: But manufacturing extends well beyond just making products. It also includes the vast value chains involved in acquiring and preparing the resources and materials used to create these products and then, once made, storing and distributing products. Even traditional manufacturing requires a good deal of logistics to produce standard assembly line goods. What will be the implications of producing just as many goods, in different varieties, shapes, and forms, on demand? And this question is not confined only to the realm of manufacturing; we must include all other services and products that must be customized "on the fly."

For this to occur, the creation of almost every product must be a very specialized affair. If a single factory can make 10 variations of a particular cabinet, does that factory keep all the resources required to produce those variations on site, or does it maintain an ongoing link with 10 suppliers that can provide the necessary resources with minimum turnaround time? Obviously, the answer depends on which method is most cost effective. If the networks available to order and receive goods in a matter of days or even hours are less expensive than purchasing a direct inventory 10 times the size, then go with networks. This is an even greater advantage to manufacturers and suppliers when that same inexpensive network is available to everyone anywhere in the world!

With the addition of "soft intelligence" (SI) to specific business-to-business (B2B) networks, a single supplier can make a variety of parts always accessible to a variety of clients. As we move up the value chain, these parts, in turn, are included in a variety of parts that may exist in an entirely different value chain. In short, distribution value-chains will no longer follow the linear link-by-link pattern but will begin to resemble a living, organic web of continuous supply and demand, first between businesses (B2B) and then between businesses and consumers (B2C).

The same effect occurring daily in B2B affairs will occur for the personnel producer-consumer relationship. SI will begin to not only comprise external and internal value chains, but to actually define them! Businesses will compete within the value chain as ardently as they compete in the open market.

This will be one of the driving forces behind the blurring of the line between the producer and the consumer. This is similar to the famous IBM e-commerce commercial where the Japanese conglomerate turns to Al's Parts Shop in Texas for vital parts when its local supplier becomes too expensive. Worldwide distribution will rapidly become commonplace.

If enterprises can no longer rely on location to define and exploit their markets, those that can understand and exploit the network that accesses these markets will be the ones most likely to survive. The technologist of the future, regardless of his or her area of specialization, will be the most valuable asset in any organization, if only to keep track of the value chain of information flowing freely across the universal network.

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