2018: digital natives grow up and rule the world€¦ · 2018: digital natives grow up and rule the...

ResearchPublication Date: 28 July 2008 ID Number: G00159053

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2018: Digital Natives Grow Up and Rule the World Monica Basso

Digital natives — today's students and younger generations that speak natively the language of computers, mobile phones, video games and the Internet — are protagonists for massive technology adoption and a consequent adaptation of human behaviors. New and future generations will drive change in workplaces and worker behavior, attitudes, skills and styles. Organizations will need to adapt HR programs and management styles accordingly.

Key Findings

• The physical and digital worlds are merging, setting up for a workplace populated by people and avatars, where reality and counterfeit are increasingly hard to distinguish. New management approaches will be required.

• The pace of change in the maturity of IT technologies and industries will accelerate during the next 10 years. By 2018, organizations will be more flat, delegated and horizontal, operating more-dynamic and agile processes. Today’s assumptions of ownership, operational responsibilities and acceptable risk will no longer be valid.

Recommendations

• Accept the wave of change that is coming, finding control structures that exploit digital natives.

• Surf and sign up to social networks, learn about their constructs and think about how they can be used.

• Plan to harness the capabilities of external resources, such as social networking and virtual worlds.

• Start understanding the implications of online persona behavior and its interaction with others, for your employees, your customer base and your market presence overall.

• Invest in mechanisms that will enable you to focus on all the influencers of your business direction and reputation, such as social networks and virtual worlds.

• Redesign business processes and organization structures to meet the changing expectations and capabilities of digital natives.

• Adapt your IT strategy to deal with growing diversity, through a managed diversity approach.

Publication Date: 28 July 2008/ID Number: G00159053 of 22

© 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

TABLE OF CONTENTS

Analysis ............................................................................................................................................. 3 1.0 Research Assumptions................................................................................................... 3 2.0 Recommendations.......................................................................................................... 4

2.1 Overall recommendations.................................................................................. 4 2.2 What to Do Today.............................................................................................. 4

3.0 Introduction..................................................................................................................... 5 3.1 Digital Natives.................................................................................................... 6 3.2 Generation V ..................................................................................................... 6 3.3 The Effects on Organizations ............................................................................ 7

4.0 Key Technology Trends Driving Innovation.................................................................... 8 4.1 Communications Everywhere: A World Without Boundaries ........................... 8 4.2 User Interfaces: A Brand New Experience....................................................... 9 4.3 Communities and Social Networks: Reaching Out to the Universe ................. 9 4.4 Virtual Worlds: One Life, Multiple Personas................................................... 10

5.0 Markets, Individuals and Society.................................................................................. 11 5.1 Digital Natives: Who Are They? Who Will They Become?............................. 11 5.2 Societal Groups: What Will Change?............................................................. 12 5.3 Human Needs Will Evolve Toward Self-Actualization.................................... 13 5.4 The Long-Tail Effect Will Shape Future Markets ........................................... 14

6.0 The Metamorphosis of IT Organizations and Users..................................................... 15 6.1 Digital Natives Join the Workforce ................................................................. 16 6.2 From a Linear and Process-Based Enterprise to a Flat and Interactive Enterprise .............................................................................................................. 16 6.3 Management and Business Leadership: A Moving Target ............................ 17 6.4 The Metamorphosis of IT ............................................................................... 18

7.0 Conclusions: A Journey Into 2018................................................................................ 19 Recommended Reading.................................................................................................................. 20

LIST OF TABLES

Table 1. Impact of Digital Natives on Large Organizations ............................................................... 7

LIST OF FIGURES

Figure 1. Maslow's Pyramid and Technology Adoption to Achieve Self-Actualization ................... 14 Figure 2. The Long-Tail Curve......................................................................................................... 15



ANALYSIS

Disclaimer Note: This research provides "maverick" analysis, depicting one possible scenario for the next decade — not necessarily the most likely scenario, but one that stimulates thinking about many different areas and calls for actions that will be beneficial if different scenarios materialize. Major unexpected events, such as economic downturns, terrorist attacks and technology-related accidents, could considerably slow, if not reverse, some of the trends. Therefore, other scenarios may be possible as well.

Irrespective of whether or not and when the scenario described comes about, we believe the recommendations in this research remain valid and will play a valuable role in helping organizations plan for the challenges ahead.

Consumer preferences are driving a technology evolution, leading to rapid innovation in products and services. Mobile technologies have enhanced personal communications and are empowering individuals. Virtual worlds and communities are set to merge with mobile technologies, connecting people in ways that transcend all considerations of location, time and culture.

Digital natives — today's students and younger generations — are protagonists for massive adoption of these technologies and a progressive adaptation of human behaviors. They natively speak the language of computers, mobile phones, video games and the Internet. The new and future generations will drive change in behavior, attitudes, skills and work styles.

By 2018, many individuals will have taken charge of their technology destiny, changing the way they shape their contributions to business results. Organizations must do more than just prepare for this transformation — they will need to embrace and influence the resulting cultural change.

1.0 Research Assumptions In developing this maverick research, we made a number of assumptions for the next decade:

1. Western countries: Relative stability in social, economic and political conditions — and continuous improvements in technology developments and adoption.

2. Emerging countries: Continuous economic growth and development in countries such as China, India and Latin America — despite the current economic downturn in the U.S. economy. Price increases for oil and grains (and the consequent food crisis) might change the economic conditions, put these countries and their governments under pressure, cause social and political tensions, and slow down the positive trend. For example, the oil crisis might affect a manufacturing-oriented country, such as China. Countries that control energy sources — for example, Saudi Arabia, Iran, Russia and Venezuela — instead might gain further power.

3. Middle East countries: We assume that no further major conflicts or wars will originate in this area.

4. Worldwide: Poverty, war (or post-war) conditions, political regimes and so on will continue to drive the migration of people from third-world countries (for example, Africa, Afghanistan and Iraq) to richer countries. Awareness and interest around themes such as pollution and global warming will continue to grow. Protests and social conflicts might develop, as well as isolated terrorist attacks (in the real or digital world), but we do not expect them to have an effect on this future outlook, except a possible slowdown.



Our analysis depicts one possible future scenario for the next decade — not necessarily the most likely scenario, but one that stimulates thinking about many different areas and calls for actions that will be beneficial if different scenarios materialize.

Major unexpected events (the so called "black swan" — as described by Nassim Nicholas Taleb in the homonymous book; see http://en.wikipedia.org/wiki/Black_swan_theory ) might happen (such as economic downturns, recessions, terrorist attacks, massive diseases, environmental disasters and technology-related accidents that could considerably slow, if not reverse, some of the trends). These rare events are hard (if not impossible) to predict, but might happen.

In addition to the outlook we present in this research, other outlooks are possible as well.

2.0 Recommendations These recommendations are valid for any roles in organizations that are (or will shortly be) affected by the evolutionary trends going on in technology, social behaviors or business environment conditions. CIOs should consider the impact of technology evolution and change in the IT user population; business leaders should consider the potential opportunities of ongoing changes in the customer base; marketing leaders should evaluate opportunities of ongoing technology and social changes to build successful strategies; and HR should consider the social evolution driven by technology, and its impact on organizations with opportunities and threats. Innovation leaders should create the vision and inspire IT and business leaders to take advantage of technology trends and drive the organization and business transformation.

2.1 Overall recommendations • Accept the wave of change that is coming, finding control structures that exploit digital

natives. You are not fully in control now, and your span of control will gradually lessen as more digital natives enter your workplace.

• Surf and sign up to social networks, learn about their constructs and think about how they can be used. The PLANT SEED framework provides a useful approach to selecting social networks with which to experiment.

• Plan to harness the capabilities of external resources, such as social networking and virtual worlds.

• Start understanding the implications of online persona behavior and its interaction with others, for your employees, your customer base and your market presence overall.

• Invest in mechanisms that will enable you to focus on all the influencers of your business direction and reputation, such as social networks and virtual worlds.

• Redesign business processes and organization structures — as much as possible, according to the specific characteristics and constraints of your industry and profile — to meet the changing expectations and capabilities of digital natives.

• Adapt your IT strategy to deal with growing diversity, through a managed diversity approach.

2.2 What to Do Today These actions are to be taken today and continued throughout the next decade:

• Think beyond technology and focus on its use. During 2008, technology will be pervasive and transparent. Who will be your company's workforce in 2018?

http://en.wikipedia.org/wiki/Black_swan_theory



• Plan to adopt enhanced communication paradigms and technology (for example, unified communications, social networking and virtual worlds) to reinvent your business processes, models and organizations. Consider, in particular, processes that require real-time responses and efficiency, and involve people with mobile and interactive behaviors — for example, sales or workforce management — or varied preferences and profiles, such as maintenance, assistance and client care.

• Focus on user needs and preferences, wherever your processes involve people and human resources (as opposite to machines); adopt new products with enhanced usability and accessibility.

• Think about the opportunities and risks of social networks in your organization. How can they improve your workplace? How can you take advantage of this trend?

• Consider social networks, communities and virtual environments as possible ways to orchestrate customer exploration around your business goals toward a purchase. There will be a much broader set of technologically mediated ways to communicate with customers, and a much broader set of demographic behaviors.

• Understand potential expectations and threats with digital natives and, more broadly, Generation V in your employee base and client base. Re-evaluate policies for recruitment. As the nature of new workers changes, you will need to evolve these policies to ensure that you hire the best candidates.

• Continue and expand diversity policies. Plan now for the changing demographics of your workforce. Consider the likely effects on employment conditions, corporate responsibility (and accountability) and office facilities.

• Recognize that the quality of your internal IT capabilities will play a growing role in determining the level of your workplace satisfaction. Retaining the best staff will require ongoing improvements in IT provisions.

• Ensure that IT modernization programs support growing levels of personalization of content, structures and forms. Plan to manage greater levels of diversity in hardware devices and software components by introducing hardware choices for users and different levels of support (down to no support) at different prices. Adopt architectures that are device-neutral.

• Take into consideration, in any strategic planning activity, how your workforce will evolve, and how that will impact your IT organization.

• Pursue the vision of and take the lead in creating a flatter, more-interactive enterprise through cross-unit and cross-function initiatives that involve at least the CIO, chief technology officer (CTO), business leaders and — where in place — the chief innovation officer.

• Pursue next-generation leadership models by focusing on motivation, change, internal and external communication, and negotiation with all relevant stakeholders.

• Consider the technology trends affecting the IT organization and users, particularly cloud computing and consumerization.

3.0 Introduction A technological transformation, driven by consumers, is forcing rapid innovation in products and services. Mobile platforms and networks have already enhanced personal communication and will



progressively empower individuals to do more — what, when and from wherever they want. Virtual worlds and communities are set to merge with this wave of mobile technology, joining people into global collectives that go beyond the limits of spatial, temporal and cultural diversity.

These and more changes are having a massive influence on today's digital natives and will affect future generations — permeating their behaviors, social skills and roles in societal structures.

This wave of pervasive technology is developing in 2008: Four-year-olds are learning to read from electronic toys and video games; eight-year-olds are developing social relations and knowledge through online communities; and digital natives are entering the workforce. New generations are growing up online and, unlike the digital immigrants who preceded them, they take the enabling capabilities for granted.

By 2018, digital natives will have transformed the workplace, taken responsibility roles and will be leading organizations and businesses. Meanwhile, second-generation digital natives will move into the workplace and will begin working for digital natives who have been working already for a decade and have achieved growing levels of responsibility. The digital natives will begin to change organizations, sweeping away many previous expectations in the process.

3.1 Digital Natives "Digital native" is a concept introduced by author Marc Prensky in 2001. It refers to today's students who are "native speakers" of the digital language of computers, mobile phones, video gaming and the Internet. Their parents and grandparents are "digital immigrants." Although digital natives are framed as a generation "born digital," not all youth are digital natives.

Digital natives share a common global culture that is defined not strictly by age, but by certain attributes and experiences related to how they interact with IT, information, one another, and other people and institutions. Those who were not born digital can be just as connected, if not more so, than their younger counterparts; not everyone born since 1982 is a digital native.

The children of digital natives will be even more "digital" than their parents. Technology will permeate their homes and lives, determining attitudes and social capabilities, experiences, and growth paths — not necessarily in positive ways. Technology might set families apart, with parents and children living in different physical locations and rarely interacting in real life, but speaking through avatars in virtual homes.

Digital natives often don't think about computers, media players, the Internet or communication devices as technology; they are like appliances that are available to them, such as a toaster. They are comfortable with technology use, but do not necessarily understand how it works, although they can solve issues when they occur. They do not use manuals, so when roadblocks occur, they contact friends via instant messaging (IM) or the Internet.

This represents a major shift in the attitude to adopt and use technology. Without necessarily growing their technological knowledge, these new generations will take full advantage of technology, overcoming today's limitations in social, business and political organizations.

What to do today: Think beyond technology and focus on its use. During 2008, technology will be pervasive and transparent. Who will be your company's workforce in 2018?

3.2 Generation V Another term used in this research, in addition to "digital natives," is "Generation V" — meaning the virtual generation. Although the digital natives area is well explored and externally defined, Generation V is a broader term defined by Gartner (see "Defining Generation V: The Virtual Generation").



As opposed to previous generations (for example, Generation X or Generation Y), this generation is not defined by age (or gender, social demographics or geography), but instead is based on demonstrated achievement, accomplishments (merit) and by increasing preference toward the use of digital media channels to discover information, building knowledge and sharing their insight. Generation V may create multiple, sometimes anonymous, personas to control information flow into the community.

The significant difference between digital natives and Generation V is that the latter is not age-defined. Generation V can be older. Organizations are already facing some of the problems we described around digital natives with older Generation V staff already on the payroll (albeit on a more isolated basis). Digital natives are or will be using the virtual world as well, so they belong to Generation V.

3.3 The Effects on Organizations Digital natives will have different effects on organizations depending on their nature, culture and sector. Most effects will be visible in organizations with:

• Business activities in consumer markets, with significant client-facing activities

• Presence in highly competitive markets, where innovation in product and service offerings and client service quality are key differentiators to success

• Specific competencies and high turnover in the employee base

• Intensive use of technology (IT and operations technology [OT]) to maintain competitive advantage

• Aggressive attitudes toward technology innovation (Type A [leading] organizations)

Less impact from the arrival of digital natives will be visible in organizations with:

• Lack of profitability targets (for example, government organizations) and a focus on cost budgets

• No market pressures (for example, incumbents)

• Slow internal dynamics (for example, slow turnover), conservative attitudes and lack of innovation

In terms of size, small and midsize businesses might be affected because of less legacy structures and culture to change (also from an IT perspective). For large organizations, Table 1 provides a high-level view of the level of impact per sectors and processes or departments from digital natives.

Table 1. Impact of Digital Natives on Large Organizations

Type of Organization Part of Organization

High Impact

• Banks, finance institutions • Education • Media

• HR • IT • Marketing • Sales • CRM • Logistics



Type of Organization Part of Organization

Limited Impact

• Government • Network operators • Healthcare • Utilities • Transportation

• Finance • Administrative • Production

Source: Gartner (July 2008)

We expect to see a higher degree of effect in emerging countries with positive growth trends (assuming that no major changes in the economic and political conditions take place). These are also the areas where digital natives' behavior offers the best opportunities or pose the highest risks.

4.0 Key Technology Trends Driving Innovation Technology innovation and evolution is driving the radical transformation set to happen in our societies and in people's behaviors and capabilities during the next decade. But what are the key technology trends that will drive innovation in products and services? There are at least four technology trends to consider: communications, interfaces, social networks and virtual worlds. For each of these, we examine the current state (2008) and project the effects of the trend in 2018.

4.1 Communications Everywhere: A World Without Boundaries 2008: A number of communication trends have completely changed how individuals interact daily with family, friends, communities and organizations. Broadband, fixed and wireless networks are spreading in many regions. Applications such as e-mail, IM and unified communications are critical to the success of businesses. A process of democratization and commoditization in communication products and services has empowered individuals to reach a universe of information, opportunities and people, despite the geographical distance, time zone differences and cultural diversity.

2018: Geographical distance, time zones and cultural diversity are no longer barriers to global business expansion as they were in the previous decade. Cultural global homogenization has not happened, and technology adoption has created new subcultures and intensified diversity. However, communications, communities, information access and sharing have changed the average perception of "diversity," which is seen more as a value rather than a threat (as it was in the past).

The magnitude at which high-speed communication networks have reshaped the global economy, lowered and eliminated business barriers, and capitalized on new forms of knowledge have rocked the foundation of enterprises worldwide. For enterprises, it is external forces — customers, suppliers, competitors and governments — not internal drivers that set their business objectives, often from tens of thousands of miles away. Almost any citizen of a developed nation will have access to the Internet, which will progressively democratize emerging countries. Mesh networks will enable people to stay connected all the time, and will provide peer-to-peer access and individual content sharing. Thousands of people and parties will have the power to influence their direction, the services/products they offer and their reputation almost randomly — across global markets, outside official channels and through a potentially infinite Web, at a head-spinning pace. However, not all society will respond to technology in the same way. Despite the expansion in communications capabilities at a global level, cultural diversity will still determine local diversity in communications styles and patterns.



What to do today: Adopt enhanced communication paradigms and technology (for example, unified communications, social networking and virtual worlds) to reinvent your business processes, models and organizations. Consider, in particular, processes that require real-time responses and efficiency, and that involve people with mobile and interactive behaviors — for example, sales or workforce management — or varied preferences and profiles, such as maintenance, assistance and client care.

4.2 User Interfaces: A Brand New Experience 2008: The way people interface with technology is changing. Consumer products (such as smartphones, music players, video games, video cameras, TV and home entertainment, and 3-D virtual world environment equipment) show continuous innovation, with more-intuitive and user-friendly interfaces. Accelerometers, touch-sensitive fabrics and location-sensing provide control mechanisms, especially on smaller personal devices. Composite, multimodal and sociable interfaces combine several techniques to improve interaction with devices and make them socially appropriate. For example:

• Smartphones — Apple's iPhone and iPod touch introduced innovative interface capabilities such as multitouch display, finger-based windows resize, motion detection to swap window orientation, graphical browsers and iconic menus.

• Game consoles — Nintendo's Wii introduced innovation with its "Wiimote" controller mechanism, which takes user's input, such as touch, motion, strength and weight.

• Digital video cameras — NEC's and Sony's new products use facial recognition, eye tracking and movement recognition.

2018: The mouse has been superseded by gestural computing capabilities in computers and other devices (see "Gestural Computing: The End of the Mouse"). Old-generation user interfaces have been augmented or completely superseded by new waves of interface technologies and paradigms. For example, environmental interfaces will introduce innovation because, in this case, the interface is decoupled from devices: Everything in the user's vicinity collaborates in an interaction. Incoming messages go to the stereo system, and a user's "show me" voice command causes the message to be displayed on the nearest large screen. Integrative communication capabilities will be a given. People will wave to the lights to turn them on, and call home to begin cooking dinner.

Market: Future general-purpose computers will use adaptable input models — touch and other haptics, voice, traditional keyboards and so on — depending on the current need, with use distributed more evenly, rather than via a single dominant method, such as a keyboard.

What to do today: Focus on user needs and preferences wherever your processes involve people and human resources (as opposed to machines); adopt new products with enhanced usability and accessibility.

4.3 Communities and Social Networks: Reaching Out to the Universe 2008: Social-networking capabilities are adolescent — not so much in capabilities, but in terms of our understanding of how to approach them. Many organizations are uncertain about whether they are good or bad for workers, and many ban their use in the workplace. During the coming years, such approaches will become unsustainable. Although people aged 30 or older might need to think twice about how to use these capabilities, younger generations do not. Facebook, Bebo, MySpace and the sites that follow them quickly are becoming the new playground — the mall, the place where you meet new and old friends, where you share experiences and views, and where you record your life. But they are also becoming the places where you look for a job, since many



organizations and professionals look for and offer open positions in professional-related social networks, such as LinkedIn, Plaxo and Viadeo. New graduates and students already tend to create video curriculum vitae (as opposed to traditional text-based ones) and post them on YouTube or similar sites. Existence in these networks becomes a reflection of existence in the real world — for individuals and organizations. a person's online reputation needs to be protected in the same way, or even more so than, as in the real world.

2018: The reputation challenges experienced a decade ago by individuals on social networks and virtual worlds will have largely shifted to organizations. Organizations' reputations are built on information that stakeholders (employees, clients and partners) decide to share in their communities and social networks. The virtual identities make it easier for individuals to share confidential information and to change organizations' reputations. If your organization is an uncomfortable place to work, then everybody can find out and you will struggle to hire staff. Your customers will be able to check the business's reputation online for service levels and ethical corporate policies. There will be no place to hide, or else everyone will have aliases and will be hiding.

By 2018, being part of multiple social networks and communities will be common among Internet users. Digital natives will have a huge digital footprint and will be able to influence your public image or personnel in many places at once. Their ability to communicate across borders will be viral.

But this cuts both ways — it will also allow organizations to join these communities, explore people's behaviors and check on employees (despite the virtual nature of presences in such communities and worlds, which does not easily allow identification of the underlying real person).

There will be some situations where frictionless communication and the free access to reputation will affect employment and buying decisions. Your HR department will have a permanent presence in many of these digital communities (see "The Hyperconnected Enterprise: Anticipating the Next Wave of Business"). Organizations need to understand and isolate where these issues about digital reputation matter (and where they don't) to act on them.

What to do today: Think about the opportunities and risks of social networks in your organization. How can they improve your workplace? How can you take advantage of this trend?

4.4 Virtual Worlds: One Life, Multiple Personas 2008: Uptake among teen and preteen users is driving the market for virtual worlds, and their enthusiasm is spreading as they mature, bringing in more users. The exponential growth is accelerating as use scenarios become more varied and access gets easier. Third-generation game consoles provide important new access vehicles and establish new online communities linked to their games. The fourth- and fifth-generation consoles will be built on this platform.

2018: Virtual worlds have also come a long way in the past 10 years and have merged with the real world. The eight-year-olds who were using Disney's Club Penguin in 2008 will be young adults and will have gravitated to more-serious matters. Approximately 30% of higher education courses will include some virtual-world teaching, and a growing number of companies will perform job interviews first in their virtual office locations. Economic activity will continue to grow, accompanied by the appearance of more law enforcement agencies, (unfortunately) more organized crime and more taxation: The company bots we will first see in 2010 will be joined by legal bots in 2011, and tax bots in 2012. Improvements in graphics-handling capabilities and bandwidth will bring more realism to visual representations and will drive the tourism and real estate industries to a new level of advertising. The past 10 years might have brought progress, but this is one area where the impact of the digital natives is only beginning to be felt.



What to do today: Consider social networks, communities and virtual environments as possible ways to orchestrate customer exploration around your business goals toward a purchase. There will be a much broader set of technologically mediated ways to communicate with customers, and a much broader set of demographic behaviors.

5.0 Markets, Individuals and Society The technology transformation described in Section 3 will have an impact on people, societies and markets. As it permeates people lives, technology will become less visible and, in a decade, will become completely invisible. This is proved already by today's digital natives, who are technology-savvy, but do not care about technology; they just use it. In 10 years, who will they become? What will their needs be? What society and markets will they live in? We discuss these issues in Section 4.1.

5.1 Digital Natives: Who Are They? Who Will They Become? 2008: Digital natives have grown up with intense exposure to technology. They show peculiar characteristics, such as the attitude to work in teams, a strong sense of autonomy and independence, and exposure to a breadth of places, ideas and cultures. However, they tend not to see beyond their local sphere of interest and activities, and they reject authority (but accept leadership). Their main capabilities include:

• Exposure to places, cultures and ideas

• Independence and autonomy

• Teamwork attitude

• Authority-adverse

• Technology fluency

• Information retrieval and manipulation

• Social behaviors

Digital natives differ from digital immigrants in many areas:

• Leveraging natural cognitive abilities, digital natives have developed new capabilities to deal with more-interactive, interconnected, visual and nonlinear information — for example, building a multimedia report with graphics, movement, sound and narratives, gathered in minutes on the Web or via electronic interactions. The natural attitude in human species is adapted to dealing with recognizing patterns and reacting: This is nonlinear thinking. Too many of the things imposed in the work environment 100, 75, 50 and 25 years ago tried to stomp out creativity, insight, pattern recognition and nonlinear thinking. Digital natives are leveraging these natural abilities, something humans were always good at. These capabilities were suppressed in most working environments for digital immigrants, but will become essential.

• They cease reading after a couple of sentences; their learning style is by experimentation and information bricolage. Instead, immigrants have a single-medium experience, usually long-winded, text-based information, and they write at length.

• Personal communications are largely mediated by technology; they use new social norms and protocols (for example, they expect to understand a message almost immediately).



• They become more fluent in the use of technology as IT becomes pervasive. In social networks, they have multiple digital identities, offering different degrees of transparency of the physical owner, which are federated across multiple systems.

Today's students are the future workers of 2018, and their ability to digest information and to multitask grows. They will increasingly acquire nonlinear cognitive capabilities and multitasking work styles. New capabilities among digital natives will imply different styles of writing, learning, collaborating and communicating. Digital natives may force tighter and better communication among digital immigrants, akin to newspaper leads: who, what, when, where and why…tell me now. Virtual social reputation will increasingly become a must.

2018: Future workers will be more independent and will take control of defining and creating their workplace and work models. They will likely operate globally, create and program their own media, and drive and create change. Whether they work in commercial or public-sector enterprises, or in businesses with regional or global reach, future workers' personalization of work and the work environment will alter their relationships with potential employers and peers.

What to do today: Understand potential expectations and threats with digital natives and, more broadly, Generation V in your employee base and client base. Re-evaluate policies for recruitment. As the nature of new workers changes, you will need to evolve these policies to ensure that you hire the best candidates.

5.2 Societal Groups: What Will Change? 2008: Signs of transformation in different societal groups are already visible. Women, young generations and senior people will face significant changes in their lives and behaviors — in particular, with regards to technology use:

• Senior people will gain increasing influence during the next years as our societies keep aging. Through 2018, retirement will be pushed back. Baby boomers will remain in their jobs, pursuing diversified career plans. Enterprises will develop talent programs for people at different career stages, ages and professional crossroads.

• Women are meeting increasing opportunities and challenges. A century of progress has pulled them out of domesticity and into business, social and political roles — particularly in Western countries. Their buying power is growing with their personal income. Their adoption of technology is growing rapidly, particularly in younger generations.

• Cultural and ethnic diversity is growing in societies and organizations, thanks to workforce migration, the globalization of businesses and more activities in emerging countries. The increasing female workforce contributes to diversity as well.

• Youth is massively exposed to technology use and adoption. Technology pervades children's lives since their first years. They will influence their reciprocal evolution. They are the digital natives and tend to teach their parents and grandparents about new technologies and their use. They represent an element of the so-called Generation V. Dark sides of technology adoption exist as well — such as cyber bulling, reduced social capabilities in the real world, addiction and so on.

2018: In the online, collaborative working world of 2018, most traditional demographic boundaries will be irrelevant. Gender, age, race and culture will have no meaning when dealing with avatars. The result will be accelerated democratization of the working population in a manner that represents changes in the underlying constituencies:

• Women will continue as the engine of employment growth, but will continue to face the perennial challenge of reconciling their professional and private lives.



• Seniors will be more active than ever before, no longer "retiring" in the traditional sense of leaving the workplace, but withdrawing more steadily. The baby boomer generation will continue to drive a level of entrepreneurial activity not seen among previous retirees. Workforces will shift dynamically across borders, bringing in higher levels of cultural diversity than ever before. Due to the increased pace of life, there will no longer be the time or inclination to consider this.

Individuals will feel empowered and will see the growing impact of their voices in the workplace — on their work teams, on the projects they contribute to and in the aggregate reputation of their employers. The growing presence of digital natives will reinforce this as they see their desire to be heard reflected in growing acceptance of their "right" to speak up. The workplace will no longer be able to pretend to deal with automations that do what they are told, when and how they are told. Workers will contribute ideas with fewer inhibitions than ever before.

For employers, the challenge will be to orchestrate this. There may be some opposite forces that slow down these trends. The tearing down of inappropriate ways of thinking (such as racism and sexism) may happen far more slowly than expected. People will tend to bond in social networks that are geographically proximal to themselves, despite the global nature of the Internet.

What to do today: Continue and expand diversity policies. Plan for the changing demographics of your workforce, and consider the likely impact on employment conditions, corporate responsibility (and accountability) and office facilities.

5.3 Human Needs Will Evolve Toward Self-Actualization Maslow's Hierarchy of Needs is a theory proposed by Abraham Maslow in a 1943 paper, "A Theory of Human Motivation," in which he talks about instinctive needs arranged in a hierarchy of potency. The lower the need in the pyramid, the more powerful; the higher, the more distinctively human. At the bottom are physiological needs, such as the need to sustain oneself (food, clothing and shelter). Once those needs are met, individuals can concentrate on safety needs, such as personal security. Next are social needs, such as love and belonging, followed by the need for esteem. Last is self-actualization — the instinctual need for personal growth and fulfillment.

2008: IT is embedded in the lower two levels through its critical role in the distribution of food, maintenance of order and support in the workplace. For digital natives, it is taking a key role in the third level as well, becoming the backbone for community and social interaction. Increasingly, IT will be critical to reputation and esteem through 2012, not only on the plus side (fun and fashion) but also on the potentially negative side.

2018: Digital natives will achieve many aspects of self-actualization through their multiple digital personas: their achievement, character and growth in virtual worlds will play a critical role in their self-image and, therefore, personal happiness. Increasingly, they will look to work out their issues, formulate their ideas and define their personal goals through their online presence.

It is interesting to explore the link between demographics, economics and Maslow's pyramid. By 2018, there will be more young people (by age range) in Africa, but will they be as affluent as in other more-mature countries? We believe that technology will be pervasive in emerging countries as well, reshaping communications, lifestyles and work styles. Broadband is already being deployed, and handset manufacturers are targeting emerging countries as top priorities.

Digital natives will increasingly look to technology to satisfy all five levels of Maslow's Hierarchy of Needs. Meanwhile, being digitally connected will become mandatory for individuals in most advanced societies, to satisfy the lower levels of the pyramid — for example, to access public and health services, increase decisional and purchase power, and so on (see Figure 1).



Figure 1. Maslow's Pyramid and Technology Adoption to Achieve Self-Actualization

Progressive fulfillment of Progressive fulfillment of the innate hierarchy of needs the innate hierarchy of needs

Virtual

Communications,Internet,

Mobile

Morality,creativity,

spontaneity,problem solving,lack of prejudice,

acceptance of factsSelf-actualization

Esteem

Love/Belonging

Safety

Physiological

Self-esteem,confidence, achievement,

respect of others,respect by others

Friendship, family, sexual intimacy

Security of body, of employment, of resources,of morality, of the family, of health, of property

Breathing, food, water, sex, sleep,homeostasis, excretion

Lifestyle, Fashion, Fun

Community, Connected

Digital Identities, Multiple Personas

2018

Progressive fulfillment of Progressive fulfillment of the innate hierarchy of needs the innate hierarchy of needs

Virtual

Communications,Internet,

Mobile

Morality,creativity,

spontaneity,problem solving,lack of prejudice,

acceptance of factsSelf-actualization

Esteem

Love/Belonging

Safety

Physiological

Self-esteem,confidence, achievement,

respect of others,respect by others

Friendship, family, sexual intimacy

Security of body, of employment, of resources,of morality, of the family, of health, of property

Breathing, food, water, sex, sleep,homeostasis, excretion



Digital Identities, Multiple Personas

2018







Digital Identities, Multiple PersonasDigital Identities, Multiple Personas

2018


What to do today: Recognize that the quality of your internal IT capabilities will play a growing role in determining the level of workplace satisfaction. Retaining the best staff will require ongoing improvements in IT provisions.

5.4 The Long-Tail Effect Will Shape Future Markets During the next decade, we expect to see extreme personalization in many of the technology products and services described in the technology trends section (3.0). Content, convenience, roles and access for end users will have growing business importance, and will propel development and profits.

2008: Mobile and computing device vendors tend to design for the largest-possible target market or the lowest common denominator to get maximum return. To identify new target markets, they must divide the target audience, which means more designs, stock-keeping units (SKUs) and so on. Some of these target markets could be very small. Vendors fear loss of focus and economies of scale with this fragmentation. The dilemma is whether to meet the demand of these new market segments or become profitable.

In some cases, there are ways to address the markets without losing economies of scale — for example, women are often attracted to smaller, thinner notebooks; so putting extra care into the ultraportable end of the notebook product line can address the female market without adding more SKUs.

Personalization is key to meeting different target market expectations and can be pursued in mobile software, services, accessories and devices. Personalization is economically sustainable, because most markets follow the Long-Tail economy model. This theory — by Chris Anderson



(see http://www.thelongtail.com/ ) — states that in businesses where inventory and distribution costs are low, companies can realize significantly higher profits in selling small volumes of many "niche" products or services to few customers, instead of selling large volumes of a reduced number of popular items ("hits") to a large number of customers (see Figure 2).

Figure 2. The Long-Tail Curve

Tomorrow's Long-Tail Niches

From products to services

From mass to niche

From standard to customized

Services, Content• Books, music, videos, games …Products• LEGO factory-like model• 3D printing• User-driven innovation

$ sa

les/

prod

uct

Number of Products

Hits ("Standard" products)

NichesPersonalized products

Tail

Head

Tomorrow's Long-Tail Niches

From products to services

From mass to niche

From standard to customized

Services, Content• Books, music, videos, games …Products• LEGO factory-like model• 3D printing• User-driven innovation

$ sa

les/

prod

uct

Number of Products

Hits ("Standard" products)

NichesPersonalized products

Tail

Head


Our culture and economy are increasingly shifting away from a focus on a relatively small number of hits at the head of the demand curve and moving toward a huge number of niches in the tail.

On the supply side, e-tailors' expanded, centralized warehousing allows for more offerings, making it possible for them to cater to more-varied tastes. On the demand side, tools such as search engines, recommended software and sampling tools enable customers to find products outside their geographic area.

2018: Markets will be very different than a decade before. Instead of an old focus on few "hits" (that is, products, services or content targeted to wide audiences, which sell in big volumes), they will focus on many niches.

What to do today: Ensure that IT modernization programs support growing levels of personalization — of content, structure and form. Plan to manage ever-greater levels of diversity in hardware devices and software components by introducing hardware choices for users and different levels of support (down to no support) at different prices. Adopt architectures that are device-neutral.

6.0 The Metamorphosis of IT Organizations and Users With all the technology and social transformations previously described, by 2018, IT will have gone through a radical metamorphosis.

http://www.thelongtail.com/



6.1 Digital Natives Join the Workforce Digital natives will bring new skills, cultures, preferences and expectations to the workforce, forcing enterprises to pursue discontinuous talent and work practices. Their power in organizations will increase because of:

• More skills and competencies related to IT and technology

• Knowledge and use of social networks and mobile technology

• Familiarity with innovative consumer products and business models

• An increased ability to retrieve information

• A natural attitude to work on projects together, which will be far more prevalent than in prior generations as a result of the pro-social behaviors they are learning in school

Digital natives will expect fewer hierarchical structures, and more globalization of team collaboration and project workgroups (regardless of the individual's location, sex or culture). They will also open up new challenges because of their natural group-oriented attitude, whereas digital immigrants think first of solving things individually (clashes may come in work and performance practices). They will bring a fundamentally new work style into the workplace; clients that can exploit this style will move ahead of those that do not.

Digital natives may represent a threat for organizations too, not only because of their technology skills, which can be used for destructive means, but also because they have a different mind-set and do not share most of the principles and values that represent today's enterprises' DNA (for example, the culture of power, command, competition, hierarchies, performance measurement and benchmarking, continuous improvement and so on). A growing pressure from inside will slowly but surely change organizations to reflect the new values of these generations.

Culture, demographics and gender diversity are valuable assets that enterprises must embrace to extend their reach and raise the service levels of their IT organizations. As younger users replace the less-varied profiles of those retiring, organizations will best understand the diversity of requirements and expectations that achieve the greatest levels of user productivity and satisfaction. Those that drive the change will reap innovations first. Embracing diversity internally will provide the best platform for servicing diversity in your customer base — for example, to externally facing IT organizations.

What to do today: Take into consideration, in any strategic planning activity, how your workforce will evolve, and how that will impact your IT organization.

6.2 From a Linear and Process-Based Enterprise to a Flat and Interactive Enterprise A major transformation is taking place and will continue through 2018, changing business organizations. They are moving away from traditional hierarchical, linear, process-based structures, where IT systems, processes and staff sit inside (while customers are on the outside). Organizations will become flat and interactive, with:

• Partners, regulatory bodies and customer councils (externally) being part of the business decisions on a regular basis

• More-fluid workgroups and task assignments, changing management responsibility. Management will be based on the ability to motivate people, build relationships and



share ownership/responsibility (see "A Flat World Demands New Management Approach").

What is the role of digital natives? They will be one of the engines behind this transformation. They will accelerate change because they bring in the culture of independence, autonomy, authority-adverse (focus on leadership) technology fluency, positive attitude to change and nonlinear thinking (creativity, insight, pattern recognition). They will take control and define their own workplace and operate globally. They will choose/create their own media, personalize their work environment and drive change.

2008: Digital natives will help to accelerate the enterprise evolution. They will not just go with the flow of evolution in culture, but they will push back and challenge. From 2008 on, traditional enterprise managers will be unable to answer questions starting with "why?" The enterprise no longer will be heavily centralized, hierarchical and based on linear processes as it was between the 1920s and the 1960s. In 2008, the transformational process is ongoing, with approximately half of all enterprises having undertaken evolutionary processes toward being horizontal, delegated and flat.

2018: The enterprise will be changed from the outside and from within. Links with the outside world will be multifaceted, dynamic and pervasive. Customers will indicate changes in demand in real time, through multiple channels. External influencers, such as regulatory bodies, will provide input to business directions on an ongoing basis. Partners will help redefine end-to-end capabilities and business processes according to changing operational conditions.

Internally, there will be changes too. Management boundaries will be fuzzy, and most organizations will consist of fluid workgroups and work assignments, where managers oversee the work of people who do not report to them (see "Managers, You'll Need Transforming, Too: A New 'Manager's Platform' Takes Shape"). They will have responsibility without authority, a situation considered untenable just a generation ago. Success will depend on their ability to motivate the people around them, build relationships, and share ownership and responsibility for work processes. The command and control culture familiar to the digital immigrant will be gone (see "Adopt Participative Management to Navigate in a Flat World").

• By 2018, organizations will be more flat, delegated and horizontal, operating more-dynamic and agile processes. Interactive enterprises will be the pacesetters in global business, driving beneficial market disruptions and generating new business value.

What to do today: Pursue the vision of, and take the lead in creating, a flatter, more-interactive enterprise through cross-unit and cross-function initiatives involving at least the CIO, CTO, business leaders and — where in place — the chief innovation officer.

6.3 Management and Business Leadership: A Moving Target The technological transformation and consequent social evolution will challenge traditional assumptions around leadership. Long-distance work, complex programs crossing boundaries, and wide webs of sources, buyers, suppliers and consumers will create a hyperconnected enterprise. By 2018, people will spend more than 80% of their time working collaboratively — and not necessarily face-to-face. New assumptions will supersede old assumptions and will require immediate attention:

• "Managers are the leaders" vs. "Leaders emerge from anywhere, and they influence and enroll people in change in a positive way."

• "Culture is clear and well-defined" vs. "Culture is as fragmented as the people, parties and locations that shape the business. Culture must reunify people."



• "Top-down communication works" vs. "Top-down communication is woefully slow. Powerful communication will flow through peers, domains of expertise and social networks."

• "Competence is tangible and visible" vs. "Competence is demonstrated largely through behaviors, with trusted peers vouching for people's competence."

• "All training and development programs must be designed for employees and then pushed toward them" vs. "People will pull the type of learning they need. Push and pull options are required."

What to do today: Pursue next-generation leadership models by focusing on motivation, change, internal and external communication, and negotiation with all relevant stakeholders.

6.4 The Metamorphosis of IT Not only are digital natives going to transform companies and technology adoption, but IT will go through a radical change and will demand new approaches and strategies from organizations overall.

The hierarchy of human assets (people) in organizations will flatten, but the hierarchies of IT assets are becoming more layered through tiered technology approaches. In the early stages of technology markets, organizations tend to deploy customized solutions; with market progression, IT deployments tend to be a combination or integration of standard products, with fewer customization efforts.

Eventually, with mature markets comes commoditization (see "The Spectrum From Customized to Commoditized IT"), and organizations tend to deploy standard solutions. This makes for more-tiered technology approaches in the future.

2008: A number of IT trends that are visible today will continue and will accelerate in the next decade:

• Consumerization, which introduces more personalization and choice for employees, but also exposes IT organizations to lack of predictability and control, and requires a different management approach (see "New IT Mandate: Embrace Managed Diversity").

• Cloud computing, which changes the relationship between business and IT assets (see "Cloud Computing: Defining and Describing an Emerging Phenomenon" and "IT Industrialization: Redefine Your IT Portfolio in Service Components").

• Massive data availability on the Internet, due to online interactions and behaviors, communities, social networks, mesh and other Web 2.0 concepts. All the information that we have access to is mind blowing in its ability to change the shape of the playing field; it is driving new analytical tools and new styles of operation — for example, search vs. database or cloud-based storage.

• Commoditization and focused customization, which enable flat organizations through tiered technology (see "Toolkit Decision Framework: Understanding When More-Customized IT Makes Sense" and "Toolkit: When to Prefer Commoditization in the IT You Buy").

• IT vs. OT vs. personal technology, which change operational responsibilities (see "IT and OT Interaction Gives Rise to New Governance").

• Fast business intelligence and analytics, which enable real-time reporting and control.



2018: IT is no longer a separate, distinct business activity. Its emphasis is shifting from "T" to "I." In some ways, technology doesn't matter anymore.

Communities, politicians, peer groups and children determine which technologies succeed and fail. The networked society generates new behaviors, opportunities and demographics: businesses have become anywhere, anytime, any partner and borderless.

Virtual worlds and the consumerization of IT generate new possibilities and new demands. Employees have multiple, matrixed personas, and IT has to deal with virtual users.

Leading organizations use enterprise architecture for their entire businesses. Technology developments in business intelligence and information management enable the exploitation of structured and unstructured information to gain insights, improve decisions, flag exceptions and enhance processes.

IT operation performance is increasing with tools such as Information Technology Infrastructure Library, process maturity, and reinforced customer- and business-centric approaches. Accelerating changes in technology foundations are bringing greater flexibility and new value from new, more-dynamic and virtual platforms and architectures.

Alternative delivery and sourcing models, such as software as a service, are changing the pattern and economics of technology provisions. Technology developments and emerging business process disciplines can generate agility, flexibility and adaptability to improve business performance (see "Alternative Delivery Models: A Sea of New Opportunities and Threats").

Conventional IT concentrates on information storage, retrieval and organization. There's a separate world of operational engineering technology whose budget, in some industries, exceeds traditional IT. Combining IT-enabled assets and event-driven architectures is starting to yield industry-changing results. All these factors build the theme of technology drivers in the changing shape of IT.

What to do today: Consider today's technology trends that are affecting the IT organization and users, particularly cloud computing and consumerization.

7.0 Conclusions: A Journey Into 2018 This is our journey into 2018. It's only 10 years away, but it will be quite different:

• In 2008, the iPhone has led the charge of consumer products, flooding the enterprise as growing numbers of users campaigned and then won enterprise approval for its use. Many organizations are actively embracing a range of consumer technologies — from employee-owned notebooks to social-networking software. Some security vulnerabilities are moving from a "no" status to being viewed as manageable risks. A growing number of enterprises look to the "cloud" to support a range of consumer-grade software and services they now sanction.

• By 2010, the delineation between consumer- and enterprise-class IT products will be history — they were only products and services. The use of component "Web services" (delivered from Web platforms) will increase as growing numbers of users create customized "mashups" to support personal and professional use.

• By 2014, the ability to build almost any type of customized application from commoditized Web service building blocks will create a Long-Tail effect — "modding" of applications and business processes will cause the market for software to break into millions of niches.



• By 2015, technology (particularly communications, enhanced interfaces, and virtual and social capabilities) will be everywhere and will become transparent to users. Almost every asset of any value will contain an Internet-connected microcomputer and sensor, so that users can find it and interface with it. The refrigerator really will be connected to the Internet. Perhaps we will no longer talk of IT.

The main consequences for business organizations and IT will include:

• The externalization of business processes is set to accelerate.

• Control of an organization's "persona" and reputation is ebbing away into the hands of multiple stakeholders — employees, customers and partners. By 2018, it will be almost entirely in their hands.

• Organizational structures are flattening, and responsibility without authority is becoming the norm.

• IT organizations will no longer define the endpoints for business functions and capability; they are becoming just a baseline or starting point.

• The gaps between user expectations of the IT tools and the capabilities of those tools will continue to grow. Users will seize more responsibility for bridging these gaps.

RECOMMENDED READING

"Future Worker 2015: Extreme Individualization"

"Gestural Computing: The End of the Mouse"

"Predicts 2008: Emerging Trends Expand Collaboration and Human Performance"

"The Hyperconnected Enterprise: Anticipating the Next Wave of Business"

"Defining Generation V: The Virtual Generation"

"A Flat World Demands New Management Approach"

"Managers, You'll Need Transforming, Too: A New 'Manager's Platform' Takes Shape"

"Adopt Participative Management to Navigate in a Flat World"

"The Spectrum From Customized to Commoditized IT"

"Cloud Computing: Defining and Describing an Emerging Phenomenon"

"IT Industrialization: Redefine Your IT Portfolio in Service Components"

"Toolkit Decision Framework: Understanding When More-Customized IT Makes Sense"

"Toolkit: When to Prefer Commoditization in the IT You Buy"

"IT and OT Interaction Gives Rise to New Governance"

"Alternative Delivery Models: A Sea of New Opportunities and Threats"

"The Changing Shape of IT: What We've Uncovered, Where You Can Find It"

"Understanding Regional Usage Patterns to Build a Global Unified Communications Plan"



"New IT Mandate: Embrace Managed Diversity"

"How to Apply the PLANT SEEDS Framework for Enhanced Enterprise Web 2.0 Adoption"

Acronym Key and Glossary Terms

Digital natives

This is author Marc Prensky's term for people under age 28 or who have grown up surrounded by digital technology.

Generation V It stands for "generation virtual" and describes the behavior of a growing cadre of users who prefer digital media channels and, through controlled personas, are actively involved in online meritocratic global communities, engaging in conversations with peers.

Haptics Haptic communication is the means by which people and other animals communicate via touching. Touch is a component of nonverbal communication in interpersonal relationships and is vital in conveying physical intimacy.

Haptic technology

Haptic technology refers to technology that interfaces the user via the sense of touch by applying forces, vibrations and/or motions to the user.



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