The Death of Distance Frances Cairncross Exeter College, Oxford Tel Aviv, August 31 st 2005
This presentation looks at... The changing world environment The impact of a new technology
Prediction can be difficult... Television will never be a serious competitor for radio because people must sit and keep their eyes glued on a screen; the average American family hasnt time for it. The New York Times, reporting the 1939 Worlds Fair
…but not impossible Asked in 1898 what he thought would be the decisive factor in modern history, Otto von Bismarck replied: The fact that North Americans speak English.
The changing world - A new balance of power
The changing world - A new balance of power A new balance of demography
Four views of the future: World population projections Source: UN
Globally, more old, fewer young
Israel 2000 – and 2050 A tale of two pyramids Source: US Census Bureau
The changing world - A new balance of power A new balance of demography More competition for natural resources
Oil pressure
By 2030… -Developing countries will account for almost 2/3rds of the increase in global oil consumption -China, which became a net oil importer in 1993, will import 74% of its oil -OECDs share of global oil demand will decline from 59% in 2002 to 47%
The coming scramble for oil: Global oil-import dependency Source: OECD
Water pressure
The changing world - A new balance of power A new balance of demography More competition for natural resources New technologies
Death of distance
Three great transport revolutions: Goods in the 19 th century People in the 20 th century Ideas in the 21 st century
Communications technology: –Increases access to information –Forces global thinking –Makes networks matter –Creates new products –Makes markets work better
- bringing changes in…. -our working lives -our social lives -our economic lives -our political lives
New working patterns: –The office as factory
New working patterns: –The office as factory –The office as club –The home as production unit
…and also –New kinds of job (did your university train web designers?) –More part-time, more all-the-time –Top talent – or no talent
The mini-multinational
New social lives: –The power of Googling (internet dating the biggest subscription sites online) –The constant conversation –Ratings, advice, gossip: a global garden fence
New social lives: –The power of Googling (internet dating the biggest subscription sites online) –The constant conversation –Ratings, advice, gossip: a global garden fence –Bye-bye privacy
New economy, new world for companies An end to inflation A new deal for consumers A new managerial revolution
The consumers invention
The Company of the Future: Technology shapes companies: -Most people expected too much too soon -The big changes are within companies - -and between companies
The second managerial revolution
The changing world for business: New ways to reach consumers – especially corporate consumers New ways to purchase New business opportunities New competitors
The worlds factory
The worlds office IT and BPO employment in India *ForecastSource: NASSCOM
A new political order The power of the diaspora The competition for citizens A new role for government
Is Distance really Dead? -Inexpensive communications bring enormous changes and opportunities. But…
Location still matters - -when goods/ inventory are needed quickly -when high-quality human capital is essential -when uncodifiable knowledge requires people to meet -when deals are done
What implications for Israel? -superb at reducing the drawbacks of distance -high-quality human capital -relatively young population -widespread use of English -clever use of diaspora