Remaining competitive in the global marketplace requires that Europe lead the second phase of the internet, which will be driven by collaboration and Web 2.0 technologies, says John Chambers.
When the internet emerged as a business differentiator more than a decade ago, it took some time before enterprises grasped how it could be used as a powerful channel to reach new and existing customers.
Today, nearly half of the top 25 countries that have the highest internet penetration rate are European. Europe also leads on the list of the most e-ready countries in the world.
The internet was initially positioned as a platform to enable transactions and this first phase has driven productivity for more than a decade. Today, we are entering what could be the second major phase of the internet, driven by collaboration and Web 2.0 technologies, which will in turn drive the next significant wave of innovation and productivity gains. Europe has the opportunity to not only benefit, but lead.
Future productivity will be driven by technologies such as TelePresence and unified communications as well as social networking capabilities, including wikis and blogs. Although these tools and applications are not new to the user, they are new to businesses.
Over time, more and more of these applications will move into enterprises and fundamentally change the nature of work. This rise of personalisation and consumerisation – where individuals are adopting new technologies more quickly than organisations can deploy them – is both an immense challenge and a huge opportunity.
In the end, what will define successis the ability to adapt to the customised needs of the customer – a point made in a recent Economist Intelligence Unit study which found that 73% of corporations expect customers will place a higher premium on personalisation than price by 2020.
Every region wants the opportunity to capitalise on the benefits of educational opportunities, job creation, productivity improvements and the creation of a middle class that strengthens economies and raises living standards. So what does this mean for Europe?
Catching the wave
Europe in particular can look forward to tremendous opportunities and productivity gains to improve the future of its economy and the lives of its citizens. Europe must focus on attracting and retaining businesses and their talent in order to compete in today’s global marketplace. It requires Europe catch this next market transition, driven by collaboration and Web 2.0 technologies.
Europe’s evolution from a manufacturing to a services-led economy is a key part of this transition, but its success will be also be determined by its ability to leverage this second phase of the internet and the next wave of productivity it will bring. Given Europe’s focus on education, broadband, innovation and its supportive governments, it is well positioned to lead. Consumerisation is already happening fast in western Europe and the penetration of mobile phones, a critical element of consumerisation, ranks ahead of other regions such as the Americas.
This next era will be that of the empowered consumer, who expects businesses to tailor products and services to individual needs. Entire business models will be transformed and firms will have to find new ways to communicate and collaborate with consumers. The future will no longer be about one-to-one interactions, but one-to-many with speeds and efficiencies that we are only just beginning to understand.
Collaboration, Web 2.0 and social networking-inspired technologies, particularly video, will reshape customer, employee and partner interactions and truly remove distance and location as roadblocks to enabling business relationships. Take, for example, the Icelandic art student who recently posted her photographs on photo sharing website Flickr. Her work was so well received that she was offered a contract from Toyota to take photos for an advertising campaign. That is the true power of the human network.
People who entered the workforce before these new technologies were available are only just beginning to understand their potential impact. For today’s generations, this is simply a way of life. Businesses, governments and countries have the opportunity to embrace this next major market transition and leverage themselves to lead in this new era of productivity and innovation. I hope Europe takes advantage of this tremendous opportunity.
John Chambers is chairman and CEO of Cisco.
