Cisco outlines next Web revolution

Internet, growing urban populations and low hardware costs will fuel another major wave of innovation, company executive says.
Written by Liam Tung, Contributing Writer
A Cisco Systems senior executive this week said he believes that a major wave of innovation is due, thanks to the Web, growing urban populations and low hardware costs.

"No army can withstand the strength of an idea whose time has come," Senior Vice President Howard Charney said, borrowing from Victor Hugo to summarize the power of the Internet.

Speaking in Brisbane, Australia, this week, Charney said the world--now split into "information-rich" developed countries and "information-poor" developing countries--is on the precipice of a major wave of innovation.

If the so-called $100 laptop developed by Nicholas Negroponte's One Laptop per Child nonprofit becomes available, as planned, to 2 billion people in China and India, and with more than half the world's population living in cities by 2008, the effect on information-rich and information-poor worlds will be profound, Charney said.

Greater access to information will improve living standards by removing isolation, which will, in turn, stem the growing disparity between productivity growth rates of information-poor and -rich nations--a gap that, according to an Organisation for Economic Cooperation and Development report, has doubled in the last decade, Charney noted.

However, he said his vision is not entirely philanthropic. For developing nations to improve life, they will need networks--Cisco's networks, he hopes--regardless of whether the networks are based on fiber-optic lines or wireless technology.

"You know, we're very big," Charney said. "When you're big, you have societal obligations...But are we going to be making profits off (building networks in developing countries)? Yes, there is a business proposition."

Intelligent Business Research Services analyst Kevin McIsaac agreed that "enabling technology" like a laptop will help, but he posed the question, "What else will they need?"

In Bangladesh, microfinance specialist Grameen Bank lent as little as $5 to women to buy a mobile phone, McIsaac noted. "This was incredibly important to enable the technology for these women to get started. They would rent out the time on the phone, which was enough to live, pay the mortgage and was a vital piece of technology in the village."

Instead of walking two days into the village to sell their produce, the women were able to call local buyers and negotiate better prices, which offered a better outcome than would have been possible under stressed conditions, McIsaac added.

Across the information-rich divide
However, innovation won't simply happen for information-rich countries, Cisco's Charney said.

"Our challenge today is in recognizing the potential of new technology and putting it to use faster than before," he said.

"To sustain innovation, we need investment, and sometimes that seems like crazed speculation," he said. "This does not mean people should take greater risks. Investment occurs in different ways, and sometimes, people get caught up in making money, and (they) build out business models that don't turn out to work."

Charney cited as an example past investments in dark fiber, or fiber-optic cable that had been laid but was not put to use, that eventually was used to help launch a viable business model: the Indian outsourcing industry, which now is worth hundreds of billions of dollars, he said.

However McIsaac warned not to interpret retrospectively good investments for efficient outcomes. "Value has come out of the (dot-com boom), but there was an enormous waste of investment," he said.

"Business needs to take a portfolio view of investments in technology. Five percent should go into blue-sky investments, like wikis and Web 2.0 for knowledge management projects, but 30 percent should go into keeping IT running and improvements on existing technology."

Liam Tung of ZDNet Australia reported from Sydney.

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