Tuesday, August 15, 2000

The New Economy: The Big Picture

The article below first appeared online at Gorilla Asia in August 2000. Since then Gorilla Asia went under, as did many tech initiatives during the Dot Com Bomb. Gorilla Asia hung in there until the end, the very end, and I still receive requests to read my articles from that era. I list them here on my blog to satisfy those requests.


Charles Caldwell goes public with his bi-weekly thoughts on management and leadership in the New Economy. If you are an entrepreneur launching an Internet or technology company in Asia, or even if you just desire to learn more about leadership and management in the New Economy, then stay tuned for critical skills and concepts you need to understand.

If you want to make it as an entrepreneur in Asia you better understand exactly what The New Economy is. Let’s pull back several thousands miles so that the entire planet, not just Asia, sits inside the Big Picture. All around the world Internet and leading edge technology companies are pioneering a revolution akin to the invention of electricity and unprecedented since the days of the Industrial Revolution. Everyone calls this phenomenon “The New Economy” and everyone could not be more wrong. The Internet is not The New Economy. Anyone who wants to make it in The New Economic World Order better understand this notion or risk being left behind in the wake of the New Economy pioneers.

To illustrate this divide between the Internet Age and The New Economy, in March 2000 I wrote an article on Gorilla Asia entitled “Can Hong Kong Duplicate Silicon Valley?” In that article one of the ideas I argue is that Silicon Valley is not about the Internet – it is about a way of doing business. For example, in Silicon Valley people understand that to promote a new company or an emerging technology, competitors may need to join forces and create an alliance. This is called “co-opetition.” This is not necessarily a new concept in the business world, but Silicon Valleyites are much more prone to strike these competitive alliances because that’s one of their ways of doing business. Right now Internet and technology companies happen to be the dominant content currently fueling Silicon Valley’s way of doing business. So, too, works The New Economy, which even goes beyond being a way of doing business – The New Economy is a philosophy.

To deepen this distinction we need to look at some of the major themes driving The New Economy. First, The New Economy is oriented around “Customer Paradigm-ed Companies.” In other words, outwardly looking companies that live in their customer’s paradigm, determining exactly what customer’s want and need. Also no new concept to the business world but The New Economy escalates this paradigm to new levels. Take for example Cisco. Cisco systematically surveys customers through out each fiscal year. Customers’ responses are directly and heavily linked into annual bonuses. Therefore, power is returning to the customer and New Economy companies are redefining just exactly what it means to be customer driven.

Second, in addition to being oriented around customers, The New Economy is oriented around individuals. Just as power is returning to customers, it is essentially returning to individuals, who are in many cases customers. Examples of this abound. New Economy employees are much more individualistic and career focused than their Old Economy counterparts. The former realizes they have many alternatives. As Steve McKay of Web Connections says, “You need to understand that your employees are volunteers.” In other words, treat your employees as volunteers because they have choices in this tight labor market. Employees can leave on a moment’s notice knowing they can quickly find employment elsewhere. The social contract is breaking all over the world with more and more people realizing that lifetime employment is no sure thing. The New Global Work Force is no longer loyal to the corporation – it is loyal to itself.

Looking at the various dimensions of The New Economy, one will see that The New Economy has been around for quite some time. Take, for example, the concept of “value added.” This term has been beaten into buzzword submission. Unfortunate because so many New Economy companies provide unique value for customers and individuals. Consider a leading Silicon Valley tech firm for a moment to consider how much value their Customer Trouble Shooting Engine Provides for customers encountering technical problems. The online system is so advanced it can handle 98% of the company’s customer inquiries 24 hours a day: that’s value! The remaining 2% call a toll free line to speak with a highly training Commando Customer Service rep typically holding a Masters in their field and trained inside out with New Economy customer service skills. Reportedly, the encounter is like dining at a fine restaurant – and we’re talking routers folks! That equals more value for the customer!

The bottomline: The New Economy represents a philosophical change – it is a new way of life. Now enter the Internet and an entire line of technology companies. Internet technologies perfectly match New Economy philosophies. The Internet revolutionizes business in many ways and it also gives back power to the individual. How easy is it to blow off a web site if the surfer dislikes the site or finds the connection too slow? The power sits in the individual’s hand with a simple click of the mouse. The New Economy is fueled by the Internet, but it’s not about the Internet. The technology is merely a facilitator for a bigger paradigm shift. Similarly, the Internet is not about making money or rocket ship IPOs and stock options – it’s about fueling The New Economy. The whole thing is a philosophy and that’s the Big Picture.

In this series I will examine three main areas: First, what are the various philosophies that comprise The New Economy. Second, what parts of the Old and New Economies blend together? And finally, what is required to be a potent leader and powerful manager in the Asian Internet scene. Everyday we read a dozen different magazines from the United States with quotes from truly visionary New Economy leaders. How often do you hear the same from Asia leaders? Hardly ever, but that’s going to change. I promise you my thoughts will add value… it’s a Bold New World – learn about it here.

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