The Hindu Business Line : Fractal evolution and the digital age

THE Digital Age is upon us. Witness the explosion of technologies and devices, from the more common-place such as intranets and the Internet, ATMs, and real-time navigation systems that provide traffic information and alternative routes to travel by, to the increasingly exotic, summarised by the plethora of hand-held devices, the beginnings of voice-recognition devices, technologies for scanning parts of the eye, even experimentation with devices to measure pulse rate and `read' thought to quickly translate into circumstance-specific action steps.

To the casual observer this rapid change in the digital landscape can appear overwhelming, and even to the seasoned company the notion of what to do next can be challenging, to say the least.

Yet, this does not necessarily have to be the case. Fractal dynamics can be used to increase sensibilities with respect to the developments. Let us turn to the notion of fractal-evolution to understand the developments — past, present, and future, of the digital industry. "The imperative fractal journey" (Business Line, October 27, 2003) had indicated that all successful organisations, including systems or markets, companies or individuals, tend to display the characteristic of fractal-completion over time. That is, they tend to move from the physical to the vital to the mental.

Here, we enhance the notion of fractal-completion, by stating that once the initial fractal journey is complete, the end-state or arrived at mental-level becomes the starting point in a new fractal journey. Hence, for continued success, an organisation will need to continually spiral through the physical, vital, and mental states in such a manner that the mental-level of any single fractal journey becomes the starting-point or physical-level in a new fractal journey, that now has all the gains of the previous journey embedded into it. Hence, the organisation will need to display the trait of fractal-evolution.

The notion of fractal-evolution offers insights into the development of the digital industry. The initial fractal with which the industry started out was one marked by the mainframe as its physical-level starting point. The mainframe, as produced by IBM and others, defined the notion of computing and the possibilities in the nascent computer industry.

Hence, basic circuitry, computer platforms, operating systems software, application software, and product distribution were provided by each player. Computers were by far the most complicated devices created to date and customers were reluctant to buy them from anyone but established suppliers. Further, customers cared little about the various layers in the technological hierarchy since they were all packaged together in a single product from one supplier.

It is only as the initial-fractal began to move into the vital-level, resulting in a relative proliferation of the mainframe, that computing and computers began to be seen as necessary to competitive advantage, and a related technological hierarchy-wise industry came into being. That is, independent suppliers, providing parts of the puzzle from manufacture of basic circuitry to application software development to services of various kinds became more and more prevalent.

This relative prevalence of computers and a fledgling industry to support it functioned to change the notion of computing, so that the original trappings and raison d'etre was overpassed by a few, the pioneers of the hour, to promote the possibility of smaller computers to do smaller, more-commonplace tasks. It was these players who had thus forced the digital industry's fractal journey into the mental-level. Mini-computers were the result of this.

It is to be noted that the success of the mainframe caused complacency in the original makers, who were satiated by their success. They could not conceive that customers would go for anything less powerful than mainframes.

Thus, while the first iteration in the digital industry's fractal journey began to race ahead with entry into the mental-level, these players remained rooted at previous levels. Hence, those, such as Digital Equipment Corporation (DEC), who embraced the development of minicomputers, came into the limelight.

A similar, yet altered fractal journey — iteration two in the digital industry's fractal-evolution — ensued, with the mini-computer at the base physical-level. Use of computers proliferated, perhaps exponentially, resulting in an even more diversified industry and even more diversified use of computing power, characteristic of the vital-level.

As a result of the economies that followed, chip-makers were progressively able to compress the computing circuits onto just a few powerful yet inexpensive chips. Smaller, relatively cheap machines could now be built around microprocessors from readily available parts supplied by the consumer electronics industry.

The notion of computing thus went through further redefinition. The micro- or desk-top computer was the result of this, and indicated that this iteration of the digital industry's fractal evolution had entered the mental-level. Players such as IBM, Microsoft, and Intel saw the exceptional opportunities of providing computing power to every home. IBM effectively did an about turn, and learned from its past complacency, to become a pioneer in the development of the micro-computer. Bill Gates, perhaps sensing the tremendous opportunity available through coming in on the ground-floor, or physical-level of this next iteration in the digital industry's fractal-evolution, dropped out of college to create the foundations for Microsoft.

Iteration three in the digital industry's fractal-evolution, which commenced with the microcomputer at the physical-level, has ended with the creation of the Internet and World Wide Web, at the mental-level.

The constant presence of readily available computing power and the proliferation of micro-computers and network devices, characteristic of the vital-level, altered the possibilities and expectations of suppliers and consumers to give birth to the notion of ubiquitous, network-supported computing.

Cisco, which played a key role in bringing about the enablement and proliferation of networks, received rapid boosts from its efforts to become one of the highest valued companies ever.

The notion that computing power has to exist at a stationary place began to wither away. Computing power and ability got pushed back into the network, so that Internet front-ends could provide access to many of the applications typically accessed on micro-computers prior to this era.

This new notion of computing signalled that this iteration in the digital industry's fractal-evolution had entered the mental-level. A host of Internet-based companies, such as eBay, eTrade, and Amazon, consequently came into being.

This now stands as the physical-level or the starting point in the continuing digital industry's fractal journey — iteration four in its fractal-evolution.

Rapidly increasing use of the Internet to leverage on its realities, such as 24x7, digitisation and virtualisation, global reach, real-time response, and specialised networking, is the norm today.

Vital-level proliferation evident in the increasing number of stable dotcoms and in the embracing of the Internet by even the most embedded industrial-age companies, has resulted in the new concept that even end-user devices not only have intelligence built into them, by way of specialised computer chips and programming, but can access or be accessed by the ubiquitous Internet.

At the mental-level, hence, the notion of smart interconnected devices has come into being. This is best illustrated by the rise of today's mobile phone, by which a user can access e-mails, take video shots and send them over a wireless network, for instance, browse the internet, and therefore check a vast amount of information, all while on the move.

Here we see relative newcomers, such as Nokia, at one time a forest industry enterprise, ousting powerful incumbents such as Motorola.

Such a play could only possibly happen by tapping into the starting-point of this next leg, iteration five, in the digital industry's fractal-evolution. This is precisely what Nokia has done through providing a smart mobile that effectively operates as a light, portable terminal to the Internet.

At the vital-level of iteration five smart devices will proliferate, hence requiring more sophisticated monitoring, control, and coordination between them. This will likely usher in a need to be able to control the various devices through more sophisticated human-device interaction.

Hence, at the mental-level of iteration five, voice recognition as input and voice as output, sophisticated touch control where certain finger or touching patterns signal what devices should do, and even thought and emotion-based control used as input to controlling devices will likely come into being. Already, we see the beginnings of research in such areas as brain-computer interfacing where simple computer operations are being directed by thought.

One can easily foresee a light, portable eye-glass type computer, run by voice-recognition as being a certain best-seller. Perhaps such a device would be the outcome of iteration five, and the starting point for iteration six. Further iterations can also be foreseen, and will likely involve the use of micron and nanotechnologies.

Now, the question is so what? What do all these iterations of fractal journeys tell us from a practical point of view? A few very important things.

First, in a rapidly altering industry the notion of which developments to pursue, or where to come in at, becomes exceedingly important. Remember IBM, then DEC, then Microsoft, Intel, and IBM again, then eBay, eTrade, and Amazon, and then Nokia.

By coming in at the ground level of the various iterations in the digital industry's fractal-evolution most were able to reap sizeable rewards. Some, in fact, have become extraordinarily wealthy. Even entry into the intermediate stages in any iteration, such as Cisco's entry at the vital-level of iteration three, has offered it sizeable rewards.

The case could also be made that Reliance too, sensing the tremendous opportunity from future iterations in the digital-industry's evolution has come in, Nokia-like, at the start of the smart device iteration. If it plays its cards well, the sky is the limit.

Second, when to exit or morph out of one iteration into the next, also becomes increasingly important. Remember IBM and DEC. Both got fixated on the levels within the iterations they had embarked on. DEC was destroyed by it. IBM survived and continued its growth only because it was clever enough to embark, at the ground-level, on the very next iteration in the continuing fractal-evolution.

Remember Microsoft again. As iteration four in the digital industry's fractal-evolution started, with its drive to push back computing power into the ubiquitous network, Microsoft was still playing the desktop-oriented Microsoft Office game to perhaps maximise its revenues through providing software for this mode of computing.

This was not the requirement of iteration four, however, and hence from nowhere, Linux with its emphasis on open-source arose, almost overnight, to become a force in the digital industry.

Adroitly surfing iterations in industry fractal-evolution so that companies enter and exit the right levels at the right times will become the name of the game. The digital industry is a great example of the need to surf iterations in industry fractal-evolution because of the rapidity and complexity with which the industry is progressing.

With time, though, and as more industry structures become increasingly complex, perhaps egged on by adopting more digital age dynamics, the future could well belong to those companies who master the art of surfing fractal-evolution iterations.

(The author is founder of Aurosoorya, a firm specialising in creativity and innovation, and has consulted with several organisations worldwide. He can be reached at: thefuture@aurosoorya.com)

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