Thursday, June 25, 2009

"It's like Europe in 1944"

I used this quote last night in a discussion about the redrawing of boundaries in the 21st century global village - like Europe in the post-war period, the new information infrastructure will emerge staggering from the rubble of a recession ravaged global economy.

The information distribution supply chain is being destroyed, and will be reconstructed in a new form. This will happen in all digital media - broadcasting, music, books, newspapers.

There will be new boundaries where value is created and transferred, similar to the national boundaries that were created at the Potsdam conference in 1945.

In the period after the end of World War II, the Bretton Woods agreement also created a new financial order that has provided the foundation for international trade for the last sixty years. The main architects of these post-war arrangements were USA, Great Britain and USSR.

In the new information economy, the architects are not so easily identified, and their sources of authority are not clear. The new trans-national ecosystem will be founded on high speed fibre and wireless networks connecting houses and people around the world. Each person will have instant access to all the world's information, and the ability to create and update information directly.

Countries and government are exploring different routes to get there (for example Digital Britain, published last week), but there appears to be almost universal agreement on the end state of ubiquitous connectivity. The points for discussion are - how long until we get there, and who will pay for the infrastructure investment.

The business case for an infrastructure investments is often challenging, and the case for fibre to the home (FTTH) is no exception. As Dr Arthur Grimes comments "The potential uses for some infrastructure may not be dreamed of when the initial investment occurs". With FTTH, innovations in education, health, aged care, and environmental management will deliver huge benefits, but these will not always reflect in the bottom line for the investor.

However, communities and countries that arrive at the end state earlier will be in a powerful position to secure decision rights when the new boundaries and financial arrangements are being determined. A strategic challenge to be sure.

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