Ciena CEO Gary Smith: Is the Digital Revolution truly driving growth?
For all the talk of a “digital revolution” we have yet to see anywhere near the same economic growth or impact as past inustrial revolutions. Why is that? In this post, Ciena CEO Gary Smith talks about just how far the digital revolution has come… and where it’s going.
Gary Smith is Ciena’s President & CEO, having served as Ciena’s chief executive for fourteen years. Gary is a member of President Obama's National Security Telecommunications Advisory Committee, and serves on the board of directors for Avaya and CommVault Systems. This piece was originally published on Gary’s LinkedIn blog.
As ICT professionals, we seem collectively convinced and are assumptive that the innovation of digital technology – of which we are all a part in helping to deliver – is not only enhancing and changing lives globally, but is also driving massive economic growth as part of what some have coined the ‘third industrial revolution.’ And why not? It would seem obvious for this to be the case particularly given so many of the services – Google, Amazon, Uber, etc. – that enable these innovations are pervasive, free and easily accessible with just an internet connection.
A sobering counterbalance to this belief, however, is that despite all of this promise of the golden digital age, we have yet to effect anywhere near the same economic growth or impact as that delivered by the Second Industrial Revolution that started in the early 20th century – known as the “Technological Revolution”– in which we began to see the advent of technologies like the combustion engine, computing, phones, jet air travel, etc. Obviously, it is still relatively early days in the Digital Revolution, but despite the arrival of the internet, Moore’s law for computing, smart phones, broadband access, e-commerce and more, total ICT spend amounted to only 7% of the U.S. economy in 2014. Whilst GDP is obviously not the only measure of impact nor is it an absolute proxy for the broader effect of ICT on global economic productivity, that level of growth is a sobering statistic nonetheless.
The context for this perspective is eloquently presented by Professor Robert J.Gordon in The Rise and Fall of American Growth, which provides many illuminating examples and economic quantifications as to why growth rates are slowing. These headwinds include poor education, increasing inequality, an aging population and rising debt levels … all despite seemingly massive “game changing” innovations in ICT. Whilst many of the headwinds he describes are specific to the U.S., as the largest and most prosperous nation in the world and with the highest innovation and adoption of ICT, it is a salutary global warning that the innovations of the digital age are potentially not enough to even sustain – much less advance – the unprecedented era of progress that stemmed from the fundamental inventions of the previous industrial revolution.
The offset to this perspective is that the confluence of big data analytics and artificial intelligence, coupled with mobile cloud connectivity on a global basis, truly has the potential to help address inequality and improve productivity by facilitating instant access to relevant knowledge. In industrialized nations, we are already seeing this enable disruptive and innovative business models in healthcare, education, transportation, agriculture and other critical industries. So, it’s clear that as the Digital Revolution continues to propagate and progress – specifically as network access improves across the developing world – it offers the promise of fundamentally improving the quality of life for billions of people and actually delivering real productivity and global economic growth.
Whilst a Digital Revolution cannot address all of the inhibitors of global prosperity and economic growth, we need to accept that we are still very early in understanding and truly harnessing the power of the Internet – especially when combined with the relatively recent virtualization of compute, storage and connectivity functions.
The pivotal issue now seems to be one of ensuring access and global connectivity … it’s now all about the network!