paradigm shifts and impact on industry and technology

PARADIGM SHIFTS AND IMPACT ON INDUSTRY AND

TECHNOLOGY

Marcus O. DurhamMarcus O. Durham THEWAY Corp / U of Tulsa THEWAY Corp / U of TulsaRobert A. DurhamRobert A. Durham Central & Southwest Srvcs, WTU Central & Southwest Srvcs, WTU

PARADIGMSIntroduction

A set of rules that define boundaries of a system

Provide description of operation within boundaries

In 4 words or less A WAY OF THINKING

HISTORYAdvances in Technology - Tools

Nomad Independence Hunt-Herd-Gather, Basic Shelter

Agrarian Economy Farm, Store, Permanent Shelter

Industrial Revolution Systems, Controlled by Owner,Information, Desirable Shelter

Information Explosion Technology if willing to risk and learn, Choice of Shelter

HISTORYBusiness Life Cycle

Technology Birth and Growth

Management Stability and Expansion by Acquisition

Legal Risk Avoidance and Demise

TECHNOLOGY LIFE CYCLE

Dream or Concept Beginning Plan Focus Growth Critical Mass Maturity Bandwidth– Roll-off Stale– Satiation Stagnant– Demise Pull Plug

Last Century - Cycle > GenerationNext Century - Cycle < 5 years

CONCEPT

PLAN

GROWTH ROLL-OFF

SATIATION

DEMISEtime

$ MATURITY

Figure 1 - Technology Cycle

Effort to Recapture Dream New Organization to Salvage Management Reduce Costs of People Employ Technology to Some Extent Focus on Core Business

EXTENDING LIFE CYCLEResurrection - Entity

Concentrate on Investors Flat Organizations Support Services - Computer and Phone Outsource

EXTENDING LIFE CYCLEResurrection - People

EXTENDING LIFE CYCLENetwork

Managers of Outside Technology Coordinate Suppliers, Marketers, Transporters Independent Entities Costs concentrated at Source Technologists at Each Corner Best in Information Society

TECHNOLOGY MANAGER

MARKETER

SUPPLIER TRANSPORTER

PRODUCT - MARKETER - CLIENT

Figure 2 - Network for Technologists

EXTENDING LIFE CYCLEWealth - Last 2 Decades

Old Thinking No Opportunity90% Purchases Did Not ExistNew Ways Use Old ThingsNew Things Use UnvaluableMajor Wealth Technology to Distribution

Directing Information Moving Products

Supplying Transportation

THEORY OF TECHNOLOGYZero - Sum

Conservation of EnergyClosed System

Stable - No GrowthDesirable for ControlLimited Resources

Gain at Expense of Others

Continually Changing Source of EnergyOpen System

Building = GrowthUnregulated

New Resources / ApplicationsNew Wealth / Value

THEORY OF TECHNOLOGYFind More

THEORY OF TECHNOLOGYSociety

Physical Resources Basis of Closed SystemSociety Arch Type of Open SystemTechnology The Outside Influence

Value to Previous Worthless

NOT ZERO SUM

THEORY OF ECONOMICSContinuously Changing

Adam Smith 1776Wealth of NationsWhat’s Good for _____ is Good for Country

John Maynard Keynes 1930General Theory of Employment Interest & MoneySatisfied Customer Quits, so Progressively Tax

Paul Samuelson 1950 - 1990EconomicsUtilization of Scarce Resources

THEORY OF ECONOMICSMore Changes

John Kenneth Galbraith 1958Affluent SocietyNo Difference in Luxuries & Necessities

Paul Zane Pilzer 1990Unlimited WealthQuantity Becomes Quality

Consumer Quits Buying, So Tax - US Policyor

Consumer Never Satisfied

60 Years Shows Latter

US Tax Structure is Penalizing

THEORY OF ECONOMICSReality

Search for Gold

Laid Foundation for Investigative Sciences

Pharmacists, Chemists, Metallurgists, Engineers

Successful, but 500 Years Later

THEORY OF ECONOMICSAlchemists

1. Technology Defines Wealth and Determines Desirous Resources.

2. Advance of Technology Determined by Abilityto Process Information.

3. Technology Gap Is the Predictor of Growth.

THEORY OF ALCHEMYTechnology Determinant

THEORY OF ALCHEMYTechnology

W = P * T n

W = Wealth (dollars)P = Physical ResourcesT = Technologyn = Power of Growth

(Positive Feedback)

THEORY OF ALCHEMYEngineer

W = P * e +T t

W = Wealth (dollars)P = Physical ResourcesT = Technology

(Positive Feedback)t = Time

TECHNOLOGY GROWTHHistory

Traditional Slow Agrarian Physical Resource Control Industrial Technology Control Information Control Broken Paradigm Shift Information to Anyone

T = I

Transaction Cost = Inefficiency Transaction Cost Lower From Computers Major firms - Inefficient - Reorganize endlessly Small Business - Low Cost Minimal Size Entity Wins

“NATURE OF FIRMS”Ron Coase

Figure 4 - Control System Model

Garbage Data Info Knowledge Application Tech

History

Desire

Budget

+

Limiters

Proportional To Sum:Acceleration of InformationSpeed of ApplicationChanges from History

THEORY OF INFORMATIONTechnology

T = d2 /d t2 (Info) + d /d t (Application) + d (history)

THEORY OF INFORMATIONFeedback

Negative - Control & Stability Positive - Growth & Expansion Filters Affect Outcome

–Width - Chops Noise, Time Response–Height - Attenuation, Gain–Rate of Change - Velocity or summation

FILTER

Mag

time

TECHNOLOGY GROWTHLimiters

Application Not Implemented Incorrect History InterpretationRegulate To Protect

LIMITS ON TECHNOLOGYCost = Perceived Value

PV = FV - d(MC + BC + DC) * N

PV Perceived ValueFV Functional ValueMC Manufacturing CostBC Business CostDC Distribution CostNNumber of Units

TECHNOLOGY GAPFeedback Loop

TC = PV + TG

If FV > then PV > then TG <

TC Technology CostFV Quality, education, reliabilityPV Perceived ValueTG Technology Gap

SHIFT OF COSTSWhere?

Manufacturing Insignificant Today Distribution is the Major Cost Technology for Distribution

–Retailer - Minimize Handlers, Computer Links, Control–Package Express - New Airline, Central Sorting, Send Back–Direct Market - Computer / Satellite, Express, JIT Customer

Major Wealth in Last 20 Years ?

Technological Distribution

PEOPLE PLACEMENT Cope Vs Options

Unskilled Labor Growing GapMotivation & Moral Responsible

Skilled “Blue Collar” New JobNew Enterprise

Manager No Need ConventionalTransition to Technology Mgr

Technologists OutsourceOpportunity Vs Stable

PEOPLE PLACEMENTCyberspace

Not About Computers Release of Information to More People Technology not Domain of Managers

Apr'94

Nov'94

Apr'95

Oct'95

0

20000

40000

60000

80000

100000

120000

Apr'94

Nov'94

Apr'95

Oct'95

Internet Connections

PEOPLE PLACEMENTSociety Good

Technology Replace Person More Money to Owner More to Spend on Non-Necessities New Enterprises from New Lifestyle

FUTURE FOR EDUCATIONAnalysis of Technology

Reams of Data Little Knowledge Can’t Review & Validate Can’t Ascertain Problems

Technical Expert vs. Artificial Expert Need Basic Principles Emphasis

2 * 2 = ?

FUTURE FOR EDUCATIONRefocus

Old New Technical Theory Skills Change Fast Deal With Things Deal With People Info Age - ‘Vacuum’ Haven Need People Skills

Continuing EducationSeminar

Short Courses Professional Society

FUTURE OF ORGANIZATIONSIndependent Interdependence

Technology Change & CreativityManufacturing Efficient Joint VenturesMarketing Entrepreneurs, Niche ClienteleDistribution Technology Manager Products /

InfoSupport Network Education and EncouragementMajor Companies ?

FUTURE FOR TECHNOLOGISTSWay to Go

20 Years Ago Concept to market, 5 years Today Life Cycle of Technology < 5 Years

Need Less Advanced Skills, More Application Multiple Separate Businesses One Flourishes, Others Incubate Develop Where You Want

With Information System

FUTURE FOR TECHNOLOGISTSNew Criteria

Network Others Must Know Exchange Skills Niche Marketer Unconventional People Skills Mandatory Change Uncomfortable, but Future is Bright

FUTURE OF TECHNOLOGISTSInformation Revolution

Major Corporation Deterioration of Empire Life Time Employment w/ Co. HA Life Time Doing Same Thing HA HA THAT’S GOOD NEWS Opportunitie$

“Business Reality: We are not a family - this is business.

The Company and the Employees have formed a partnershipwhich should be mutually beneficial.

Either party can terminate this partnership at any timeif it ceases to be beneficial - no hard feelings.

This is a job - it should be challenging and rewarding -but it is still just a job.

Loyalty and high morale may no longer be part of therelationship.

Long term security is no longer a reality.”

SUMMARYParadigm Shift

Tech Growth = Info Acceleration + Application Speed

Tech Limit = Perceived Costs

Tech Gap = Advances - Application

Opportunity = Tech Gap + Spin-Offs

SUMMARYOrganization Inertia Makes Unresponsive Traditional Pare to Flat Independent Manufacturers, Marketing, Transporters

Marketer

TechnologyManager

Supplier Transporter

SUMMARYTechnologists

Success = Change

Communications & People Skills

Basic Education on Fundamentals

Continuing Education

SUMMARYMatter of Control

Stability of Negative Feedback

OR

Explosive Growth of Positive Feedback

$

CONCEPT

PLAN

GROWTH

time

MATURITY OPPORTUNITY

RECOGNITION

Questions?