What does Oil at $98 a barrel have to do with the Internet and Innovation?

A lot as it happens.

Historically, when Oil hits a high price its due to supply being slowed down to raise prices. This time its different. Demand from the US and China in particular are driving up the price. The global economy is still growing at a decent pace and more and more people are now connected to “The Net” (over 1bn or 1/6th of the world population at last count) and its bringing down the barriers to entry in a significant number of industries. Its also flattening the world we live in. (Suggested reading: The World is flat by Thomas Friedman)

This flattening of the world stage is having a profound impact on the way business is being done and the big guys are taking full advantage of it. Some of the mergers & acquisition activity and new product launches of late bear this change out:-

- Cisco buys Webex, scientific atlantic and linksys so as to get to the end user as opposed to be just the network providers hardware supplier.

- Microsoft buys 10% of social networking site Facebook for $1.5bn after heavy bidding by others including Google.

- Google launches its Open Social API to allow disparate social networks to link together etc.. days after it fails to get the Facebook deal.

- Google launches their Mobile platform, Android, with 47 service providers interested in the first week

- Both Cisco & Microsoft launch teleprescence solutions with high definition video conferencing capabilities so expensive executives can talk face to face without having to leave the office

- Rupert Murdoch buys MySpace, The Dow Jones & The Wall Street Journal (completely opposite ends of the spectrum if ever I saw one) then launches the Fox Business Network TV channel to compete against CNBC and bring world financial news to the masses in a jargon free way

- Apple sells 600,000 iPhones in a week and 1.4m in the US since it launched. User site the interface and the ability to be connected at any Wi-Fi connected location

- McDonalds launches free wi-fi in the all 1,200 sites in the UK

- Google does a deal with VW re: its mapping technology to bring better realism to the in car sat nav market

- Nokia buys NavTeq (the mapping company) so it can bring Sat Nav functionality to a phone near you

The high price of oil has obvious implications for the filling up of our cars at the petrol station but it has far wider implications for the innovation occurring our in the business world. If its too expensive to travel, people will find other ways of getting information across or meetings arrange for example. Alternative sources of energy will emerge or current ones will become more viable. New business opportunities will be creating and current ones will wither away.

Everything nowadays is connected - ever if at first view it doesnt seem as though it is - we truly are living in the dawn of the “Connected Age”.

Are you or your company participating?

Regards

Dean

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This entry was posted by Dean on Saturday, November 10th, 2007 at 8:56 am and is tagged with and is posted in the category Innovation and the Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.