Economist and author Umair Haque says future economic prosperity depends on using IT for more than improving efficiency. CIOs need to focus on making consumers’ lives better.
How does IT play a role in the continuing economic trouble?
One driver of this great crisis is the paucity of information. We didn't have good enough information coming out of Wall Street. The credit ratings industry was putting out poor information. Our economic institutions [continue to] use incomplete, old, irrelevant information.
For example, corporate reports come out four times per year. And we take the Gross Domestic Product (GDP) as preordained. The GDP leaves out costs, such as social costs. One example is that the costs of cleaning up the BP oil spill were added into the GDP but the harm from it was not subtracted out. People lost livelihoods. The environment was damaged with lasting effects that we don't measure financially in any real way.
The GDP is a flawed number.
So GDP makes the economy look better than it is. Is any economic indicator being revamped?
We're beginning to use IT to track real-time data for inflation. We can use it to gain a much more dynamic picture of what's going on. I would love to see a company give a weekly or daily financial report. Companies can say, "We think the GDP is a relic. We're going to try to pioneer a data set that can help us reinvent it."
Why should they change how they report business data?
Because these changes are beginning to happen globally. Which are the first two countries to announce plans to update their GDP to include social costs, such as pollution? India and China. American companies that do business in these countries are going to have to factor in those costs as well.
We've been successful as practitioners of IT at furthering the paradigm of more, bigger, faster, cheaper. We are less so in applying technology in the most economically sustainable ways. Being experts at using IT to deliver stuff to consumers only goes so far.
Meanwhile, America is facing a human development crisis. For the first time, the next generation is less educated than the one that came before. We have obesity. An overarching pessimism.
You've talked about a Greek concept, eudaemonia, a meaningfully well-lived life. And you see a role for enterprise IT. What is it?
Over the last 20 or 30 years, economic gains have come from strategic use of technology to make the supply chain more efficient. But it's not enough to underpin a lasting prosperity. It's not enough now for companies to pursue a transactional paradigm.
You must build lasting relationships by delivering not just products but outcomes that matter to consumers. The competitive game becomes who can figure out what they can do to improve lives.
Too many CIOs are still steeped in using IT to drive efficiencies. If you want to take your job to the next level, you have to see that the future of IT is in reimagining how consumers and companies connect.
You've written that some "plodding giants" are getting enlightened. What's an example?
Through bits of code and relationships, Nike wants to try to construct an ecosystem whereby people are tangibly improved. In the Nike+ program, you insert a sensor into your running sneakers, synchronized to your iPod. The system monitors your distance and form and progress over time to help you use your sneakers in a much more worthwhile way.
Nike is saying, "We're going help you set goals and reach them." And that's IT. The idea isn't that we should have less stuff, although many would argue that, but to get more out of the stuff we have.
Why can't we do that with everything? Pharmaceutical companies could use IT to help people get the most out of their drugs. Help people achieve goals and reach their potential--that's what we're not doing with IT now.
Umair Haque is director of the Havas Media Lab and author of The New Capitalist Manifesto: Building a Disruptively Better Business. Follow Senior Editor Kim S. Nash on Twitter: @knash99.
This story, "Your Next Competitive Advantage" was originally published by CIO.