The global economy is somewhat of a hot button issue these days. It’s hard to talk about the economic issues of globalization without getting into the economics of things. And in an age where the face of international political economy seems to be changing suddenly and dramatically, all industries must re-assert its role as a global innovator for the greater good and not just disruption in and of itself. Companies like Aloha Technology are actively working toward this goal.
The industrial age laid the foundation for the digital age, which in turn gave us our burgeoning knowledge economy. In the old days, location was a key component to almost every kind of business. This had wide-ranging effects on critical variables such as labor, transportation and resources.
Cheap real estate was a strong incentive for development and investment, which gave certain locations an advantage over others. Location, therefore, was a very important part of the business strategy.
After industrialization but before the digital age, the service economy took over in more developed parts of the world. This resulted in a rise in labor costs and a gradual decline in the skilled workforce in these regions. By extension, the top tier of developing countries started to attract various industries due to their comparatively low cost to set up business.
Although all of these developments still have broad ramifications for these regions as well as the global business community, perhaps the most consequential of all of them is the IT sector. And here’s why...
Since the turn of the millennium, new business paradigms have proliferated throughout the developed world thanks to digital technology. The survivors of the initial Silicon Valley ‘tech bubble’ (including Amazon and Google) went on to become some of the world’s most influential companies, so much so that governments themselves are still trying to make sense of their influence.
Because of this profound disruption, the most promising companies are those who learn (as early as possible) to leverage its power rather than let it be leveraged against them. Perhaps one of the most important lessons to learn at this stage is that location is becoming less and less of a deciding factor in business success, largely thanks to the power of information technology.
The term “data is the new oil” has become increasingly popular over the past decade or so, which can be attributed to the exponential rise in data transfers across ever-widening information networks across the world. It refers to the commodification of data as a resource from which companies benefit greatly, and which could even displace (if not replace) fossil fuels as the determining factor of developing markets. But this comparison is just a little bit short-sighted.
Data, like oil, is a very valuable resource. Among other things, it helps businesses make informed decisions that give them a competitive advantage. However, unlike oil, data is not finite. As long as there are mechanisms to collect data, there is an infinite amount of data from which companies can benefit. Data isn’t just the fuel for growth, it’s an ecosystem unto itself.
The world is becoming increasingly interconnected each and every day. As companies like Google, Apple, Microsoft and Amazon become increasingly monolithic, one should not fear their power so much as to completely miss the example they are setting for businesses. Technology like the Cloud, IoT, Blockchain and Machine Learning are making it easier for businesses to automate, outsource, offshore and generally develop radically new paradigms for how businesses can transact on a global level.
“Location, location, location” is no longer the golden rule, as the world is now what you make of it.