The MT Essays 40th Anniversary: The Digital Economy - Ever closer encounters

Companies will need much greater precision in the way they interact with customers over the internet. Fast and enticing means of delivery win you competitive advantage.

by Mike Altendorf, Conchango
Last Updated: 31 Aug 2010

Ten years ago, if you'd asked me what would drive the future of the digital economy, I would have said the internet. And, despite the painful boom and bust that was to follow, it would have been the right answer. The internet has delivered immediate access to companies and their products, streamlined time to market and generated the 'now' culture we all live in.

As we look to the next 40 years of the digital economy, it is clear that the internet will continue to play the leading role, particularly as low-cost broadband is becoming ubiquitous. But our concept of what the internet is, how we interact with it and what it looks like will shift radically. It is because of this that organisations need to review their assumptions about how success is achieved on the web.

There is fresh impetus to start innovating with the internet again. Choosing to bide your time and watch the competition while others pioneer - as many did to great effect during the days of boom and bust - will no longer be a safe option. Customer expectations have been raised, the web marketing techniques in general use at present are becoming ineffective, and those leading the way have a very good understanding of what will be successful.

We are fast entering an era dubbed 'Web 2.0'. Behind the jargon, technology and marketing associated with this new phase is a simple explanation: Web 2.0 is about tailoring the internet to the needs of the individual. Instead of the traditional web pages that we're used to seeing through a standard browser, Web 2.0 will increasingly deliver tailored interaction more akin to the purpose-built applications we already have on our desktops.

There are examples of this happening already. We now have applications that automatically download topical media for us in the form of 'podcasts' - without our ever needing to launch a web browser. We have software telephones that use our internet connection to enable us to talk to family and friends for free. And, increasingly, we have web-based applications that grant us access to key company systems so that we can be just as effective out of the office as we are in it. The question, though, is what all this will mean for businesses in the future.

Clearly, for companies using the web as a channel to market, being first with a proposition will no longer be good enough. Companies that have something new and powerful to offer customers need also to think about how they deliver it. In practice, this means going beyond conventional browser-based interfaces to offer experiences that are immediate and streamlined.

The same goes for companies seeking to implement new business applications: they should empower users to get what they want through richer content and more productive technologies.

Moreover, as the internet becomes tailored to the specific needs of consumers and employees, greater integration and sharing between organisations will become fundamental to success. Indeed, for companies in some industries, fully collaborative business models will emerge - as we are already seeing in retail with the emergence of a so-called 'eBay ecosystem'.

The internet is now a dynamic and rapidly maturing channel to market.

But it is also an evolving medium that offers untapped opportunities for achieving competitive advantage through better communications and slicker operations across a business.

The organisations that thrive in the next 40 years of the digital economy will be those that learn quickly how best to exploit the latest developments.

At the same time, it still holds true that those who rush ahead without understanding the ramifications of internet evolution will fail.

More haste, less speed.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today