Interview Transcript

Topic: How Technology is Impacting Business

 

Rivlin:    I’m Alice Rivlin, and I’m a senior fellow at the Brooking’s Institution. 

 

Question: What innovations will define the next economy?Rivlin:    I think we’re on a positive innovation cycle which is definitely not over there are lots of things happening in new electronic application and new healthcare applications and that’s going to power our economy going forward.  It is not a moment in which I think anyone can say, we’ve run out of ideas.  At the moment we’ve run out of credit.  Now, we aren’t financing people’s new ideas but we need to turn that around. 

 

Question: Are there risks to avoiding technology investments?Rivlin:    There is certainly risk of not investing in technology.  There are bigger risks of investing in the wrong technology.  The landscape is littered with corporations and government agencies that revamp their computer systems quickly and it cause more chaos than the advantage of investing in new technology. So the bottom line is got to do it very carefully and have some very skilled people doing it. 

 

Question: What are the biggest challenges to technological change?Rivlin:    Computers and telecommunications have revolutionize our, the way we conduct business and the way we conduct our lives.  The problems are that we’re overwhelmed with too much information and too much noise going on.  I think the real problem of surviving these wonderful innovations is to keep a bit centered to this matters for business, it matters for ordinary people and not get overwhelmed and distracted by the rapidity and the volume of the information flow. 

 

Question: How has technology changed government?Rivlin:    Technology is helping the government a lot and could help more basically a lot of things go more smoothly.  The government is involved in huge information collection operations it essentially runs a huge insurance companies called the social security a lot of information needs to be collected in process to quickly, that’s certainly a change the way the government operate.  One of the agencies that has had most benefit but also most trouble in getting into the modern computer age is the internal revenue service.  Taxes are certainly processes more quickly and efficiently than they used to be but there is a long way to go in improving those computer systems.  Technology is also given average people more access to government information and help.  You can go on lots of websites and find out what’s available to help your particular business or help you as a tax payer on a particular problem.  There’s a long way to go but both the federal government and state and local governments are much more effective than they used to be because they have taken advantage of modern technology. 

 

Question: Should all corporations have a Chief Technology Officer?Rivlin:    Most major government agencies have achieved technology officer and ought to have most states and cities do as well.  They, they clearly technology is extremely important to the functioning of any large organization whether it’s a corporation or a government agency and somebody very highly qualified has to be in charge.

Discuss

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Toby Heath on May 5, 2009, 5:09 PM

Technology has always changed the way businesses operate. What distinguishes some companies from others, is how they make use of technology, and get a step ahead of thier competitors through it.  Often times, companies are late to the game picking up new technologies, and become entrenched in old ways of doing business. By the time they make the transition, the competition is already on to the next technology.

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Emma McNamara on May 7, 2009, 9:40 AM

Does anybody have examples of companies that are always ahead of the curve in terms of their technology adoption?  Or, examples of comapnies that have been left in the dust because they have failed to do so?

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Sean McManus on May 7, 2009, 6:39 PM

Rivlin makes an interesting point about the real trouble coming when companies invest in the “wrong technology.” In an era of massive technological change, when disruptive innovation is the rule not the exception, companies run the risk of charging quickly into unfamiliar territory. It would be wise to heed Rivlin’s advice—move quickly but not so quickly that you make wrong, and inevitably expensive, choices. In this economic environment, nobody can afford to do that.

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Marco Chiappetta on June 2, 2009, 12:44 PM

Many of Rivlin’s points have a very simple, underlying thread—common sense. Investing in the right technologies and implementing new technologies using skilled staff just makes sense.

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Staci Collier on June 3, 2009, 12:09 PM

Sean, I second your thoughts on the matter. There is so much technology springing up everyday that, at times, it’s hard to detect what is valuable and useful (or will become valuable and useful) and what is not.

It is very, very important that businesses embrace new technologies. However, it is also very important that they put them into practice prior to jumping in head first. They need to make their investments one step at a time and they need to learn to admit and accept when something isn’t working out as previously planned and then act accordingly.

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John Long on June 3, 2009, 6:05 PM

I think a concept of wait and see is applicable for any company wishing to remain ahead of the technological curve. They should really consider what their short and long-term needs are with a given technology. If the technology is forecasted to be obsolete in the next quarter, waiting for the next generation is probably the wiser investment.

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Eliot Spaulding on June 11, 2009, 8:04 PM

In response to Emma an example of a company – or really an entire industry – that is going to be left in the dust due to their lack of technology adoption is the book industry. I think that we’ll see in 10 years, 5 years, may be even less, that Amazon – with a dominant position in the e-reader market – is going to vastly change the dynamics of the publishing industry.

Publishers were very slow to react to the market power shift that occurred with Amazon’s business development into the e-reader market. By not adapting to this new technology, and adopting operational business processes, publishers have put themselves in a tough spot.

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Laura Gordon on June 12, 2009, 1:17 PM

John, this wait and see strategy, is really a kind of a free rider problem. An initial investment is very costly and ultimately it is more likely that the second generation entity will be better and more refined.There are plenty of examples: first generation iPod, friendster giving way to facebook, Sony Reader giving way to Amazon’s Kindle. TiVo to Comcast’s VOD. 

This is problematic from the point of view of the investor, however, becuase then any new tech investment in something truly new is likely not to be worth it. Why then to people innovate?

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