Gartner has raised the alert to prepare for the “programmable economy”, which it says has the potential to disrupt virtually every facet of the global economy.
The “programmable economy” is a natively "smart" economic system that supports and/or manages the production and consumption of goods and services, enabling diverse scenarios of exchange of value — both monetary and non-monetary, says the analyst firm.
The programmable economy is one of the key reports in Gartner’s Maverick research findings presented at the Gartner Symposium/ITxpo in Florida last week.
"As the move toward digital business gathers momentum, we can already see the emergence of the next phase — autonomous business,” says David Furlonger, vice president and Gartner fellow.
Enterprises and governments must immediately begin preparing for this transformation.
He points out these these phases, however, still rely on 20th century economic models. “Gartner's Maverick research anticipates that beyond autonomous business lies an era of more radical technology-enabled transformation that will eventually have an impact equivalent to that of the Internet."
"In the Internet of Things (IoT), 'things' are becoming smarter, more connected and more relied upon to augment everyone's life. However, there is a critical missing component to the IoT, and that is monetisation," says Furlonger. "Success or failure with IoT will only be achieved via the development of a new economic platform and monetary operating model. Monetised 'things' will therefore redefine the economy."
The programmable economy is enabled by metacoin platforms and smart technologies, will support new forms of value exchange, new kinds of markets (including dynamically defined on-demand markets), and new kinds of economies.
The latter includes the attention economy, the reputation economy, the on-demand economy and the resource optimisation economy.
New forms of commerce and economic activity, new programmable business models, and new modes of social interaction are already starting to evolve and, eventually, new legal and societal structures will be required, he states.
"The impact of these changes will not, of course, be uniformly positive," adds "Every major new technological development has brought with it unfortunate and even dangerous consequences, and the programmable economy will be no exception.
“The adverse impacts of the programmable economy will, for example, include the ethical challenges associated with machines making autonomous decisions, and the potential for illegal financing activities."
The most technology-aware and aggressive organisations, and those that strive to be leaders in their industries, should move more swiftly to investigate the current state of the technologies which will enable the programmable economy, says Gartner.
They should think deeply about the disruptions to current business models, principles and practices to better prepare for a radically different future.
The information about, and digital representation of, business and societal context that flows across the pipes will be active and monetisable, equivalent to cash (digital currency). It will also have its own programmable rules, resulting in new concepts including "smart property", "smart contracts","dynamic digital personas", smart business models and distributed autonomous organisations.
"These fundamental changes represent nothing less than the future of business, and will have sweeping consequences that extend far beyond business, to society as a whole. Enterprises and governments must immediately begin preparing for this transformation. They will unquestionably need to rethink their technology portfolios, organisational structures, personnel and skills and vendor relationships," states Furlonger.
"They will also need to consider much larger issues, including business models, target markets, product and service portfolios, reward mechanisms, intellectual property rights, legal contracts, accounting and taxation treatments, and customer relationships — in fact, every way in which they conduct business or interact with individuals and society.
“This transformation will, however, take more than a decade, giving enterprises and government's time to prepare and respond — if they act now."
Read more: Use cloud to innovate like startups: AWS
Send news tips and comments to firstname.lastname@example.org
Follow Divina Paredes on Twitter: @divinap
Follow CIO New Zealand on Twitter:@cio_nz
Read more: It's showtime for IT leadership
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.