Mobile payments technology is likely to be a key economic engine around the world
Digital technology and the internet have given rise to five disruptive technologies that are likely to have a significant impact upon global growth.
First, cloud computing is now the fastest growing part of the communication technology sector. Although most of this growth will take place in mature western economies, there are signs of positive trends unfolding in the developing world, where cloud computing has made it possible for organisations to access software at a lower cost. In countries that do not have internet access, projects such as O3B (“The Other 3bn”) aim to provide internet connectivity across the world using satellites.
Not only does cloud computing lead to huge productivity gains for western firms, it also enables governments of developing countries to deliver core services such as banking, health and education more efficiently. In addition, it reduces infrastructure costs for small and medium-sized enterprises, the backbone of all economies.
Second, following on from the “consumer internet,” the next generation of the internet has become known as the “industrial internet,” “machine-to-machine” (M2M) or “the internet of things.” Due to the falling cost of computing power, it is predicted that by 2020, 50bn devices will be connected to the internet in the developed world, and within five years many US homes could have 200 devices linked up, ranging from thermostats and freezers to TVs and cars.
Third, top multinationals such as General Electric are developing M2M platforms. Information from machine-to-machine sources can improve efficiency and costs on a large scale. This information is known as “big data” and involves the analysis of historical data and live information as well as performing predictive analysis. General Electric believes it can identify billions of dollars of possible savings using this approach. Big data can also substantially increase profits in retail. Although there are significant benefits to be drawn from the industrial internet, many organisations (particularly in the emerging economies) do not have the resources and capabilities to manage big data, such as powerful data-mining software and data analytics know-how.
Fourth, the growth of mobile devices and the roll out of 4G in the USA, Europe and China has created a robust platform for the development of a mobile payments system, akin to the one already in place in parts of Africa (see below). A number of digital payment business models are currently evolving, providing access to a rich source of customer data for western companies.
Mobile phone payment systems also provide advantages for the developing world. It has been estimated that India could save $22bn annually by making welfare and other government payments electronic, thereby eliminating corrupt middlemen and “money leakage.” Roughly a quarter of the world’s population does not have a bank account but does have a mobile phone. By harnessing virtual currencies, which involve direct transactions that bypass poor infrastructure, additional savings will be possible. As virtual currencies evolve and become more secure and regulated, this will increase financial inclusion and enhance global growth.
Fifth, the creation of objects using 3D printing is about to have a substantial impact on the manufacturing sector as mass production gives way to mass customisation. 3D printing now makes it economical to produce single items or small batches of products cheaply. Originally, it was used for prototyping, but now finished products are being manufactured to very high standards and at increasingly low costs.
Cloud computing, the internet of things, big data, mobile payments systems and 3D printing—these are just five of the current technologies that will help to drive growth in developed and developing economies. They are all here, now.
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