Business Leadership Forum 2007 – Part 1

ConferenceThe 2007 Business Leadership Forum, the five such event hosted by IBM, took place in St. Petersburg, Russia and included two days of discussion about innovation and the challenges facing businesses and government in the 21st century. IBM Chairman, President and CEO Sam Palmisano welcomed the 450 invited guests representing more than 75 countries to the forum at The Royal Philharmonic Hall. Simultaneous translation of the speakers was provided in ten different languages.
Sam opened the meeting with the theme of "Innovation That Matters". He described a view of a new computing model based on a global infrastructure which is open, flexible, integrated, collaborative, and autonomic. He did not make any product or services pitch but it is clear that the new infrastructure described happens to directly map to SOA (software group), Blades and Virtualization (systems group), and Business Transformation Services (services group) — the three major parts of IBM’s business. Sam also described the trend toward convergence of software and services — this plays directly to two great strengths of IBM. The not too subtle point was also made that the infrastructure of the future is much more like Google than Microsoft.
One of the basic premises of the forum — nicely set up by Sam — was that very large numbers of people are entering the "middle class" around the world and this is going to drive large demand for consumer products and services and upstream demand for suppliers of all kinds. For example, Russia expects to have 70% of the population using the Internet by 2010, right around the corner. Most everyone is aware of what is similarly happening in China, India, and Eastern Europe. These huge new opportunities demand a premium on innovation. Sam continuously drove the point that globalization is driving an expanding horizon for innovation and it seems to me that IBM’s strategy is to collaborate with the customers, academia, and governments around the world. to will result in breakthroughs in the company’s products, services, and management culture. For IBM customers it should mean a big boost in assistance for their business models and business processes.
Sam described how globalization has evolved — international companies, to multinational companies to globally integrated companies. IBM is practicing what it preaches and is shaping its strategy, management and operations in a truly global way. Becoming a globally integrated enterprise means that it is locating operations and functions anywhere in the world based on the right cost, the right skills, and the right business environment. The company now has more than 10,000 employees in China and more than 50,000 in India.
An interesting perspective was then offered by a global leader — Fujio Cho, Chairman, Toyota Motor Corporation. Toyota is truly a value-based giant — the world’s largest automaker by sales revenue as of the first sales quarter of 2007 — that has been widely recognized for contributions to society in America. Mr. Cho described many innovative ideas including building a car that is accident free and cleans the air in the environment as you drive it. In the production area he described "jidoka", an unprecedented idea, which basically means that any employee can stop the entire production process if they see something wrong.
The next part of the forum focused on business model innovation and was chaired by Ginni Rometty, Senior Vice President for Global Business Services at IBM. She was followed by Carlota Perez, Professor of Technology and Development at the University of Tallinn, Estonia who talked about the five great surges in the last 240 years: the industrial revolution (age of steam, coal, iron and railways), the age of steel and heavy engineering (electrical, chemical, civil, naval), the age of the automobile with oil petrochemicals and mass production and now the age of information technology and telecommunications. Next will be the age of biotech, bio electronics, nanotech and custom materials. Carlota asserted that each surge takes 40-60 yeas to spread across the world.