On Moore's Law, the next wave and accelerated change. An interview with Forbes publisher, Rich Karlgaard.
Shaku Selvakumar 060001XT47 firstname.lastname@example.org | | Tags:  bizagility rich_karlgaard leadership cloud_computing ibmimpact smartphones forbes change cloud mobile business 3d_printing_technology ibm robotics
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In its third year, the Forbes BusinessLeadership Forum is back at Impact 2012 and will offer over two days with multiple sessions for business leaders to help them discover a unique route to innovation and customer centric, cost effective solutions. Change, complexity and uncertainties can be managed by the agile business with a combination of breakthrough business strategy and revolutionary IT technology.
Rich Karlgaard is the publisher of Forbes, an avid biker and the author of the weekly column Innovation Rules. He writes about technology, entrepreneurship, regional and economical development, and the future of business and work. He frequently lectures on these subjects and is a regular guest on Fox News Channel’s “Forbes on Fox.” In 2005, he began writing a daily blog, which appears on the homepage of Forbes.com. Rich joined Forbes in 1992 to start Forbes ASAP, a technology magazine, along with Forbes CEO and Editor-in-Chief Steve Forbes, and the futurist and writer George Gilder. At Forbes ASAP, he commissioned original works by Tom Wolfe, John Updike and other notable American writers. He co-founded two companies ( Garage Technology Ventures in 1997 and Upside Magazine in 1988) and one civic organization (the 5,500-member Churchill Club in 1985).
Shaku: Rich, it is great to have the Forbes leaders back at Impact 2012 and thank you for taking time for our third annual interview!
Rich: Yes, the Forbes Business Leadership Forum is a great event for business leaders and glad to be back.
Continuing our conversation about change and economic uncertainty, what is the new normal and what are your 2012 predicts?
This trend of this uneven recovery has certainly become even more dramatic. Large publicly traded companies continue to do well. That’s been recognized by the stock market, yet stocks on a price earnings ratio are still cheap. They’re cheap by a historical standard. They’re cheap when you look at the unprecedented low interest rates out there as an alternative investment vehicle.
But the good thing is that the overall
economy, not just the large publicly traded companies but smaller companies are
beginning to perk up. Bank lending is
starting to occur again. There’s a general mood of optimism. The unemployment
rate is lower than when we spoke a year ago. And here where I live in
Since I talked to you a year ago residential real estate prices are up 15% to 20%.
Definitely a relief after a long time.
Yes, that’s largely because technology
companies are doing so well. But that
figure is manifestly not true throughout the state of
You have the pure startups that are exploiting the technologies, and then you have large companies that are transforming themselves very, very rapidly.
Though for all that’s happened, the changes that we’ve seen so far are about to be dwarfed by changes as the whole Silicon Valley model and the whole Moore’s Law pace of change escapes the traditional IT industries, and starts to transform in fundamental ways to older industries such as manufacturing, energy, transportation and so on.
It’s been predicted for a long time that things like robotics and more recently digital manufacturing are coming up. Sometimes you can make these predictions too far in advance, and by the time they actually begin gaining traction people are kind of bored and they’ve moved on.
That’s often when these technologies really pop up. So I am now fully convinced that over the next several years that 3D printing technologies and robotics are going to start gathering a lot of attention. They will be working from the power that’s available in the cloud.
You can anticipate that if computing power was free and unlimited and bandwidth was free and unlimited, how would you use them in a way that you don’t use them today?
We clearly see that with social networks, new modes of communication that are doing everything from creating companies like Facebook to reorienting the way more traditional businesses communicate with their employees and communicate with their vendors and their whole ecology.
You are beginning to see that the sheer
I think that when you look at a business process that’s going to be changed fundamentally, you know, people talk about the gamification of business.
So you’re saying that the generation is going to be more accustomed to visual learning?
Yes and when they’re integrated inside of a corporation suddenly, the kid who’s a computer game addict today is in charge of managing the company’s supply chain maybe 20 years from now. I don’t have any doubt in the world that enterprise software of the future is going to be a simulation because the sheer processing power and graphics power needed to do that will be there.
The bandwidth needed to transmit it will be
there, and it’s a more universally understood language than English for young people
That’s going to fundamentally change also education.
Absolutely. Let me give you two examples. Both are in Silicon Valley, so excuse my Silicon Valley bias. You have the Khan Academy which has opened up essentially free learning for almost anybody with the motivation to do so.
I was just at this program in
On robotics, we saw a video of double
amputees from the
And take IBM’s Watson . We saw a clip of Watson understanding the nuance of the language and it was beating the two best players that ever played the game.
I really think we’re on the cusp of some very, very interesting things and here’s a prediction that as soon as people get tired funding social networks and they will…all of a sudden this venture capital juggernaut is going to be on to something else, and some of them already are.
Kleiner Perkins has funded a very interesting company that makes a smart thermostat called NEST and it learns about your habits and patterns and puts it on autopilot for you. NEST is only the beginning of a whole bunch of household devices that will include smart refrigerators that will notice that you’re low on something that you frequently have.
I would love to have advance warning when milk runs low in my family! So you’re saying that we’re on the cusp of another revolution like the industrial?
Yes that’s exactly what I’m saying.
What happens to the large enterprise and how will they thrive in a time when being agile is critical for success?
They will be successful if they don’t get wedded to the past and they don’t get wedded to what’s made them successful in the past. If you do that you will suffer the Kodak problem or, you know, or the near death experience that IBM had in the early 1990s.
I think large companies are still going to do well as they still have the brand clout. They still have the ability to integrate very complex problems. If you think about the world is going to go from 7 billion to 9 billion people by 2050 within the larger population there’s also this trend of urbanization. Companies like IBM and others recognize the opportunity in Smarter Cities. When you start talking about Smarter Cities, the scope of those projects cannot be fulfilled by a little company.
What about talent and new ways of working?
The challenge for large companies will be integrating that talent outside of its doors. The founder of Sun Microsystems, Bill Joy, came up with this observation 20 years ago that some people called Joy’s Law, that when everybody’s connected on the Internet at high bandwidth and instant communications etc, no company no matter how big is going to have even a double digit share of the talent within its industry. Any company is going to have to find a mechanism of being able to integrate talented people with great ideas into the organization.
But then the second thing you’re going to need is the entrepreneur matched with the company of scale and together they can change the world and do some good.
These are the new business models that we are seeing with unlikely partnerships across the world. How do you see them adapting to what is necessary for the next wave?
I think IBM, not to flatter the host excessively, has done a very good job because it’s really in many respects only a 20-year-old company, because it had to really face some huge problems that could’ve spelled the end of it. That was only two decades ago and that experience is forever imprinted on the brains of the people who are in leadership now. IBM understands the networked, distributed and cloud world. It gets that. So when you go to the IBM Impact conference you see a lot of space for companies outside of IBM.
The old “not invented here” was thrown
overboard when it was seen that it didn’t do any good.
In the networked, distributed world, it’s not outsourcing talent anymore.
Yes, I think this stuff arbitrages out over
time because of the speed with which talent can move across networks. Nobody
talks about outsourcing anymore. They talk about building and manufacturing and
designing where it’s most appropriate. That’s
not outsourcing. That’s different. That’s following the talent rather than
following the lowest cost, following the talent and the customers as opposed
to, you know, a pure arithmetic of low cost.
Plus the low cost equation is changing rather rapidly as rising nations
are seeing their wage base go up. So whereas
So you’re seeing some manufacturing
actually moving back to the
It is a great time to be in enterprise software. You are going to see the whole supply chain concept being rethought once again to be more flexible to accommodate fluctuating fuel costs, movements in talent and something I mentioned earlier that it’s going to become more visually depicted.
Let’s talk mobile. There’ll be ten billion mobile devices in use by 2020. How do you see this changing business models? It has already. What is your prediction around mobile?
Two things. I think 4G bandwidth will
become ubiquitous and very rapidly. And, I mean, the newest iPad accommodates
4G. Of course, in the developing world
just the sheer low cost of the devices is a game changer that you’ll see.
Thank you, Rich! I look forward to these annual interviews because the scope of the discussion always leaves me with more questions.
Change, complexity and the agile business are on the menu for the two day, Forbes Business Leadership Program and I am looking forward to meeting you at Impact next month.
Rich Karlgaard will be joined by Forbes CEO, Mike Perlis and Managing Editor, Bruce Upbin at the Forbes Business Leadership Forum at Impact 2012. Read his IBM centennial interview with IBM's Sam Palmisano. Follow @richkarlgaard and subscribe to his blog: http://blogs.forbes.com/richkarlgaard/
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