Every business needs to “go digital.” Data about customers, competitors, suppliers, and employees are exploding. Ninety percent of all data were created in the past two years. By 2016, there will be 3 billion Internet users globally, and the Internet economy will reach $4.2 trillion in the G-20 nations.1 Notes: 1 The Group of 20 major economies comprises Argentina, Australia, Brazil, Canada, China, the EU, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the U.K., and the U.S.
No company or country can afford to ignore this phenomenon. The fact is that we have entered the “second half of the chessboard,” where the scale and speed of change are indelibly altering industry structures and the way that companies do business.2 Notes: 2 The second half of the chessboard is a metaphor for the point at which exponential growth begins to have a fundamental economic impact on an organization’s overall business strategy. It refers to an ancient fable in which one grain of rice is placed on the first square of a chessboard, two grains on the second, and so on, doubling the grains of rice on each subsequent square. The sixty-fourth square would have 2 billion times more rice than the first half of the chessboard. The entire board would contain a mound of rice the size of Mount Everest. The recent book <em>Race Against the Machine</em>, by Erik Brynjolfsson and Andrew McAfee, has popularized the phrase. Farsighted companies, even ones in traditional industries, can separate the signals from the noise and create new sources of advantage by going digital.
The “new” Internet is different in many ways from the old Internet. (See the exhibit below.)
These developments have consequences for companies and policymakers alike.
More than 15 years after the rallying cry was first heard, the Internet really is “changing everything.” As Walter Wriston, the legendary leader of Citibank, said in the 1980s, “Information about money has become almost as important as money itself.” That is true for every business today.