IT’s Star Turn
To thrive in the 21st century service economy, startups and old-line companies alike must shift their IT geeks to the front lines of innovation
Our shift toward a service-based economy paralleled our increased investment in IT. According to the 2005 European Innovation Scoreboard, which looked at IT investment in developed countries as a percentage of gross domestic product, the U.S. led the world in 2004 with 9.25%. In aggregate terms this amounts to about $1.1 trillion dollars. In that same year, our investment in new factories fell to $16.2 billion as reported by The Wall Street Journal (“U.S. Birthrate for Factories Is Steadily Falling,” March 15, 2006), meaning that for every $1 dollar invested in factories we invested about $68 in computer systems.
Server farms, mainframes, and networked PCs have displaced factories as today’s primary industrial complex. And increasingly, and across sectors, those technologies are being deployed in the name of services.
Data are the “raw material” of today. “Any product that is not closely associated with a service today, will be in 10 years,” said Kevin Fong, managing director of Silicon Valley’s renowned Mayfield venture capital fund, at a recent Institute of Design strategy conference. “Today we only fund devices that are connected to services.”