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A Smarter Planet: The Next Leadership Agenda

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As the world wakes up to the danger and promise of global integration, Australia’s business and political leaders have a choice. Will we content ourselves with surviving the storm, or will we use this opportunity to change the game by infusing intelligence into the systems that support our economy and our society?

Right now, our nation’s employees, citizens and families are ready, eager and anxious for change. But this moment will not last long. The question is, will Australia’s leaders seize it?

Will we see the potential of the fact that we are all now connected – economically, technically and socially – and will we take it to its logical and powerful conclusion?

Thanks to the meltdown of the world’s financial markets, we are all too aware of the realities and dangers of highly complex global systems. In fact, this decade has seen a series of jarring realisations. In the last few years, our eyes were opened to climate change, and to the environmental and geopolitical issues surrounding energy. Contaminated milk in China made us aware of the global supply chain for food. And the world became a smaller and more dangerous place after the 9/11 attacks in the United States.

But these events are only the downside of global integration. On the upside is the potential for us to change the way the world works – literally.

Our planet is becoming not just smaller and “flatter”, but smarter.

This isn’t just a metaphor. We can now infuse intelligence into the systems and processes that enable physical goods to be developed, manufactured, bought and sold, services to be delivered, everything from people and money to oil, water and electrons to move, and billions of people to work, govern themselves and live.

Think about this: By 2010 there will be a billion transistors per human – and each one will cost about one ten-millionth of a cent. The technology is being embedded into hundreds of billions of objects: cars, appliances, cameras, roadways, buildings, pipelines. Very soon the internet will connect all of this, in addition to some two billion people. Behind the scenes, massively powerful computers and computing “clouds” can be affordably applied to processing, modelling, forecasting and analysing the mountains of data all this will generate, as well as just about any workload and task.

In other words, the physical and digital infrastructures of the planet are converging. Almost any thing or process can become digitally aware and interconnected. Any system – a water supply, a transport network, a company – can become smart.

Becoming smart isn’t just about technology – in fact, technology is the easy part. We must infuse not just our processes but our decision-making and management systems with intelligence.

With so much technology and networking abundantly available at such low cost, what wouldn’t you enhance? What service wouldn’t you provide to a customer, citizen, student or patient? What wouldn’t you connect? What information wouldn’t you mine for insight?

The answer is, you – or your competitor – will do all of that. You will do it because you can. Indeed, we will all do it because we must. We simply cannot move forward with systems as inefficient and unaware as those we have today. The current financial crisis – in which our institutions spread risk but weren’t able to track risk – is just the tip of the iceberg.

The national cost of road congestion – in terms of wasted time, fuel, air pollution and stress – is tipped to rise to $8.8 billion a year by 2015. Up to 70 percent of the energy input into a coal power station is lost before it even reaches your house. The average Australian basket of food travels over 70,000 kilometres from producer to consumer – two-and-a-half times around Australia! And our healthcare “system” can’t link from diagnosis to drug discovery, to healthcare deliverers, to insurers, to employers.

These and other systems may be interconnected, but that doesn’t make them smart. The good news is, now they can be.

Consider Stockholm’s smart traffic system, which has resulted in 22 percent less traffic, a 12 to 40 percent drop in emissions and a reported 40,000 additional daily users of the public transport system.

Many other cities, including Brisbane, are deploying such a system to address their traffic management and congestion challenges. Queensland Motorways has introduced a ‘smart tolling’ project, using the latest traffic management and business intelligence technologies to provide drivers with an automated free-flow tolling access across south-east Queensland’s toll roads.

There are many, many other examples, and not just from the world of business. Countries, regions and cities are increasingly competing on the basis of smarter physical and social infrastructure – efficient transportation, modern airports, intelligent and reliable energy grids, transparent and trusted markets, their quality of life.

But the task ahead is daunting. At current course and speed, modernising the world’s urban water, electricity and transportation systems alone would require $41 trillion over the next 25 years. Given the trajectories of development driving the planet today, we’re going to have to run a lot faster (and a lot smarter) just to keep up.

Leaders of businesses and institutions everywhere confront a unique opportunity to transform how the world works. We have this chance for reasons no one wished – but it’s an opportunity we must seize.

And, to do that, we will need new forms of leadership. Today, very few systems are the responsibility of a single entity or decision-maker. Our systems traverse the domains of government, business and community. Almost all of them require many different kinds of expertise.

The leaders of the coming era will be those who succeed in tackling our new challenges by collaborating in new ways. This will mean stepping outside traditional comfort zones. We will need leadership that pulls across systems. We will need to embrace goals that go beyond those of our individual organisations. And we will need to be truly visionary.

Glen Boreham is Managing Director, IBM Australia and New Zealand.

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