Copyright Ian Pearson, BT Futurologist

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Future business

March 2003

The dotcom bust caused many people to believe, wrongly, that the Internet has failed. In fact, it has become integrated into just about every business process. And as companies build Intranet tools to automate or streamline their administrative procedures, we’re seeing a rapid convergence of business thinking. Already, large companies are beginning to look very similar and, even with small and medium sized businesses (SMEs), use of common ‘off the shelf’ business support systems is increasing homogeneity.

While it may sound like businesses are rapidly becoming clones of one another, there’s a big upside when it comes to their ability to respond quickly to market and technology change. The uniformity of administrative processes will make it easier for mergers and acquisitions to succeed, accelerating consolidation or sector transformation. And because the tools are easily scaleable, it makes it easier for companies to form and grow quickly – for example, as new technologies open new opportunities and change expectations.

That’s great because, as we start pulling out of recession in the next couple of years, money will become available to back all those new business ideas that have been in hibernation during the recession. The consequent technology explosion, which I expect around 2006, will flood the market with new technologies and new business models, creating high evolutionary pressure in every market sector.

The resulting rate of change will be such that even companies that are only a few years old may find themselves obsolete. Many old and formerly successful companies will vanish. Company lifetimes will shrink, with an increasing tendency towards use of virtual companies that only exist for the lifetime of a particular project. And of course, investors will need to recover a profit early before a new technology changes the market again.

We will still need goods and services, so the market will remain healthy, but it will soon take a lot more skill and imagination to survive in it as a supplier.