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A tale of two revolutions
Imagine a country that took one look at the industrial revolution and threw up its hands in horror at the very prospect of change. Oh no, not for us these naughty steam engines, looms and ironclads! We'd rather stay tilling the land!
November 8, 2012 10:30 by Alex McNabb
They were the best of times; they were the worst of times.
The Industrial Revolution has changed the world and brought us to the world we have today. The compelling combination of innovation and communication has transformed society; initially in the United Kingdom, where it had its roots, but later spreading to America, Europe and the rest of the world.
The confluence of mechanisation, improvements in transport, communications and entrepreneurialism transformed agrarian societies and created industrial powerhouses that brought wealth and opportunity as well as created poverty and appalling illnesses. It tore society apart and remade it, constantly.
In the late 18th century and into the 19th, that revolution built cities as it emptied rural communities. The old ways had changed and people, from legislators down to the common man, had to find ways of adapting to the furious pace of change our world was suddenly pitched into. Life would never be the same again, from our views on community, family and morality through to the expectations we had of our rights and place in society.
Imagine, then, a country that took one look at the industrial revolution and threw up its hands in horror at the very prospect of change. Oh no, not for us these naughty steam engines, looms and ironclads! We’d rather stay tilling the land! These countries would arguably be the ones that would subsequently fall to the inevitable rush for empire – because an entrepreneurial revolution sustained by free market economics will inevitably cause expansion into new markets and the sheer force of the explosion will open those markets by hook or crook. Sure enough, it did in the 18th century, as Europe’s powers jostled to dominate smaller, less able countries who were still in ‘the dark ages’ compared to these new, brash economies.
An alternative model might be to try and cherry pick from the revolution. We want the steam engine and the mill, but we’d rather not have looms if that’s all the same to you. We’ll take the canals, but pass on the roads. The trouble with this is that innovation revolutions are integrated – any part of the set of available innovations that is not embraced and made competitive will create a market opportunity for the expanding revolutionaries.
And so it is with the Internet Protocol in the UAE. Although the Internet is the core technology of our new revolution, it is merely a road network. The producers of raw materials, the refiners and manufacturers need haulers to find their markets, but once the canals and roads are built, that’s about it. You can build roads and charge tolls, but you can’t own the traffic or the goods that pass over the roads.
Critically, you can’t dictate to road users what they must pay to use your road if you are competing with other transport networks – the market then defines price. So when you have a Microsoft retiring Messenger and replacing it with Skype, the global VoIP provider whose website is blocked in the UAE, you face a very clear choice – one you have failed to face, but known about, for years now. Do you reject the revolution (an attitude that has long been your inclination) or do you accept that you have no choice but to compete in the newly transformed environment or inevitably fail?
Both of the UAE’s telecoms now work on wholly IP based infrastructure and yet we pay Dhs1.50 for a text message. That’s the most expensive 160 bytes of data imaginable. Extrapolate that to a 1Gbyte month and you’d be shelling out about nine million Dirhams ($2.5 million) for a normal data package. You can see how What’sApp starts to look attractive, can’t you?
Telcos have no choice but to adapt to the IP (and by that I mean VoIP) era. Their revenue models will have to change, they’ll have to toughen up and cut staff. I watched thousands of jobs go in the years I spent with Jordan Telecom going through just such a transformation. It’s not pretty, but that’s revolution for you. They’ll have to find new ways of creating products and services relevant in an IP world. I’d say the solution lies in transactional commerce over IP networks, but hell I’m just a PR guy what would I know?
Right now, we’re busy sitting on a chair squawking ‘go back’ at the waves, but they’re waves of innovation and they’re inexorable.