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comparable in scope to the greatindustrial revolutions of thepast.The specific effects ofdigitization on the world ofbusiness will be many andfar-reaching, but every industrywill be dramatically affected(see Exhibit 4).Business andCustomer InsightsEvery industrywill be the beneficiary of realtime,high-resolution businessinsights combined with theability to reach out to customersmore effectively. Informationon shopping habits, location,finances, social activities, searchhistory, securities trading,travel, medical history, voting,and advocacy, among others,is already routinely captured,processed, and stored at oneor more of the 7.5 milliondata centers now in operationworldwide. As consumersdigitize their lifestyles and aresurrounded by more sensorsand other devices for gatheringinformation, companies will gainunprecedented new insight—butonly if they have built thecapabilities to do so. Retailers,for example, will be able toadjust their in-store SKUs toaccommodate ultra-local tastesand preferences virtually inreal time.Another result willbe the growing use of criticalbusiness techniques such associal marketing, crowd sensing,and crowdsourcing. Researchersfrom the MassachusettsInstitute of Technology havepored over 16 million telecomcall records, analyzing call date,time, and position, and cannow forecast someone’s futurewhereabouts with 93.6 percentaccuracy. Johan Bollen ofIndiana University has analyzedmillions of Twitter messages todetect national mood swingsthat presage changes in theDow Jones Industrial Averageup to six days in advance.ProductivityThe impact onproductivity will be profound.Labor productivity will riseas a result of more targetedmanagement of workforcesand even more extensiveautomation of businessprocesses. Manufacturing hasalready been transformedin several industries, testingnow takes place using virtualprototypes rather than realones, and teams from variousfirms collaborate in the cloudon complex virtual designsof large-scale developments,seamlessly tapping into globaltalent pools. The productivityof physical assets will bedrastically improved through theuse of smart infrastructure, theintegration of physical goodsinto the digital world throughembedded wireless devices, andbetter investment decisionsthrough deeper analysis ofincreasing amounts of data.New Value Pools and ValueShiftsAs a result of gains inboth productivity and businessinsight, new value pools willemerge in most industries,together with opportunitiesfor major shifts in value as thecompetitive dynamics within andamong industries are altered.Three primary types of valueshifts will occur: Most of theshifts will take • place withinindustries, thanks to changesin market share or industrystructure, clearly separatingthe digital winners from thelosers. Laggards will be acquiredor merged. Consumers willgain substantially, • not justthrough reduced prices andmore attractive offerings butalso because of greater choiceand convenience, and evenlonger life expectancy, driven bydevelopments in e-health andother technologies. Digitizationwill also create the • next waveof growth in capital investment,which will flow to all kinds ofcompanies, includingsuppliers, whether hightechhardware and softwarecompanies, lower-techconstruction companies,professional services companies,or disruptive new players. It isquite likely that a great many“old” businesses will see theirrevenues come under pressureas they are forced to pass onto consumers much of theefficiency gains attributableto digitization. Publishers and“old media” companies, whoserevenues have been increasinglycannibalized by the rise of new,virtual services and businessmodels, serve as a case inpoint. Still, despite widespreadconcerns that new technologieswould destroy the overalleconomic value of the sector,that value has actually risen (seeExhibit 5). But the challengesfaced by the publishing industryremain a cautionary note toother industries that have so farbeen affected only moderatelyby digitization and the valueshifts that can occur as aresult. Altogether, we expectthat the ongoing digitizationof every industry will impactglobal economic value by $12trillion to $15 trillion in 2020,including market share shifts,cost improvements, pricedecreases, and new valuepools; this figure needs to becompared to a global purchasingpower parity–adjusted GDPof roughly $100 trillion and a50 www.teletimesinternational.comDecember 2011