We in the West may kid ourselves that we’re nowhere near recession in its official sense, but it’s impossible to completely ignore the siren calls of those who argue that we are standing on the brink of economic meltdown.
Should this threat act as a spur or reversal for the digital revolution?
Technology – and the Web in particular – is driving change in all quarters. The value of online brands is already being recognised and lauded, even if the real-world value is less tangible at present – as evidenced by Geocities’ IPO (stock market flotation) valuation at a staggering $1.5bn (930m).
But beyond the delivery of information, the Web is likely to alter the way business is done locally, nationally, and throughout the world. This so called e-business revolution, while in its infancy now, will flourish and alter forever how corporations work, interact and relate to one another. Those which will weather the coming storm, and potentially emerge stronger, have already begun to develop e-business strategies.
Not convinced? Well, if we apply a Darwinian model to global economics, then we will see that recession, while destructive, ultimately forces a change. Granted, it’s painful and the casualties are great, but change must occur, forcing a reassessment of markets and business practice and the inevitable emergence of visionary methods of operation.
Some may scoff at the decision this month of media and publishing giant Bertelsmann to pump $200m (125m) into the loss-making online subsidiary of leading US book retailer Barnes & Noble amid such financial uncertainty. But who is really being short-sighted here? Sure, the investment is high, and the returns certainly won’t roll in overnight but, be assured, eventually they will – and in spades. Think about it – through the immediacy of e-business and the shortened distribution chain it brings, there’s significant margin advantage to suppliers and an equally high cost advantage to customers.
Electronic commerce is not just about making money, but saving it. I guarantee we won’t be doing business in three or four years’ time the way we’re doing it today.
So who is really mad and misguided? Not, I would argue, the likes of Bertelsmann buying into the e-business revolution now, but those who have the usual knee-jerk reaction to the hard times ahead by buttoning down the investment hatches.