6th Excellence-in-communications Lecture: «Changing the rules of the game: the convergence of media in the global information economy»

Date and time: June 10, 2008, 18:30 hrs
Location: Ringier, Zurich

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The convergence of media in developed countries is driving a revolution that will globalize information and service chains, impact jobs and employment and industrialize services, according to Dr. Uday Karmarkar, featured lecturer at the most recent MScom Excellence-in-Communications lecture. More than 140 communications specialists from throughout Switzerland gathered June 10, 2008 at Ringier AG in Zurich to hear Karmarkar's fully-booked lecture, "Changing the rules of the game: the convergence of media in the global information economy."

Karmarkar, the L.A. Times Chair in Technology and STrategy, UCLA Anderson School of Management, Los Angeles, USA, and Research Director of UCLA Anderson's Business and Technologies Project (BIT) which studies the impacts of new online information and communication technologies on business practices worldwide.

"The US economy is now over 80 percent in services, both in GNP and employment; manufacturing constitutes less than 15 percent and agriculture is less than 3 percent. This presents us with a new dichotomy: information vs. material, or bits vs. atoms," he said, adding that the new information economy encompasses all industry sectors that address the eventual production of goods and services. That's pure information goods like databases and book, information services like news broadcasts, transaction services including financial services, experiential information goods such as music, knowledge based professional services, information transportation or telecommunications, and information processing tools like computers.

Challenges of the global information economy include increased global competition, outsourcing and offshoring of services, globalization of simple commodity activities like data entry, with transaction- and logistics-related activities up next on the globalization horizon.

Four-screens model
Along with that revolution will come changes in human behavior, he said.

"Look at the four-screens model. We as human beings are analog; input is digital. So, how many screens do you have? Most people have at least four screens: a laptop, a personal digital assistance, a cell phone and a home theatre. All of these have different form factors," Karmarkar explained, adding that those form factors are shrinking as devices become smaller. For example, he said, there was a time when entertainment took place live and the "screen" was a stage; today, podcasts are an increasingly popular entertainment venue.

Karmarkar said implications of the information revolution include changes in information value and veracity and threats to existing industries and firms, as consumers gain even greater control of how they receive information and who delivers the information. Using retail banking as an example, Karmarkar illustrated how technology has transformed a user experience that once was controlled by bank branches and tellers. Access, processes and sales related to retail banking now are far more consumer-controlled, and in the future will become even more flexible as consumers take advantage of technologies like the internet, telephones, PDAs to control their banking experience.

Now is the time for business leaders to rethink their strategies and look for new models if they are to survive the information revolution, according to Karmarkar.

"The old paradigm was the medium, economically, and not the message; I'm afraid today that the paradigm might be the message. It might be the package, rather than how you deliver the message. Other than the package, it might be the interface," he said. "It's media to appliance. It's not the book or the TV; it's not that you aggregate and process and intellectually add; at the end of the day, it's connectivity and communications."

Surviving the revolution
The industries and firms still standing at the end of the information revolution over the next 30 to 40 years will be those that adapt their models and practices.

"People are going to have to ask themselves some unpleasant questions. So, to use Google as an example, If I'm in financial services, I have to ask myself, 'Could Google tomorrow decide to run a bank?' Today, a bank is a computer system. So what is it that Google is or is not? A newspaper? An education system? A medical/health care service?" Karmarkar said. "In this world, it's search vs. customization. In the future, who is going to provide the service that you thought you had a lock on? It's a winner-take-all mentality. It's not pleasant. But it's reality."

In addition to teaching courses on technology management and management issues in the new economy at UCLA Anderson, Karmarkar organizes the high-tech "area of study" in the MBA curriculum and is also the faculty director for several executive education programs focusing on management in the information economy. Karmarkar has been a consultant and researcher on a wide range of projects, including e-business strategy, manufacturing strategy, business process redesign, supply chain management, industrial marketing and technology management for companies in the United States, Europe and Asia. His clients have included Becton Dickinson, Aditya Birla Group, American Cimflex, Deere and Company, Eastman Kodak, Ford, GM, WW Grainger, Hindustan Lever, IBM, Thomson Publishing and Xerox.

Save-the-date
The 7th MScom Excellence-in-Communications Lecture will take place on October 21, 2008 at Google (Zurich) with Wally Olins, World Authority on Brand Development and Identity